Cisco Sees Channel Play For SMBs


"Why SMB? Because IT spending for SMB customers is growing 20 percent to 50 percent faster than it is in enterprises, DiLullo said. "You have to go where the opportunity is," he said at Comstor's SMBx launch in Broomfield, Colo., Thursday.

"As things get more complicated, the need for support becomes more important. Security is no longer just an enterprise concern. Even SMB needs secure networks that are up 100 percent of the time," he said.

Cisco's largest opportunity lies in the SMB market, DiLullo said. Currently, the San Jose, Calif.-based networking giant touches only 5 percent of businesses with fewer than 100 employees, according to Cisco. It reaches 23 percent of those business with 100 to 499 employees, and 52 percent of companies with 500 to 999 employees.

In contrast, Cisco has achieved dramatically higher sales penetration with large enterprise customers. According to DiLullo, Cisco's gear is installed in 77 percent of companies with 1,000 to 4,999 employees and 98 percent for 5,000 or more employees.

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Cisco does not intend to reach SMB customers on its own, he said.

"There is no back room plan for Cisco to use a direct model. We like distribution. We need the channel for credit, reach, scope, availability, support. This is our plan," DiLullo said. "The SMB customer wants the stuff to work, but they [also] want the solution, the financing component. Cisco by itself doesn't offer a lot of value in that regard. We need partners to do that."