Cisco's SMB Assault Spawns New Gear

In just over two months since Cisco Systems announced its $100-million global small-business initiative, the networking giant is rolling out three new product sets targeted at the SMB sweet spot of 100 employees or less.

The first fruits of the SMB initiative are a new Spam and Virus Blocker, a network storage system and a collaborative communications system, all aimed at the SMB.

According to Keith Valory, director of product management in Cisco's security technology business group, the three new products illustrate Cisco's commitment to the growing SMB segment and marked the first installment made possible by the $100-million SMB investment. Cisco's focus on the SMB will give Cisco a piece of the SMB market that is expected to hit $16 billion in 2009.

For solution providers, Cisco's targeting of the SMB market opens the door to engage customers with products that weren't previously available for smaller companies.

"These larger [vendors] were focusing on the enterprise, but there are more SMBs out there," said Austin Smith, CEO of solution provider Digital Son IT Services. "This allows us to come up with a more defined upgrade path with product offerings that are affordable to that market. It gives us an easier sell. To know that Cisco is playing in that price bracket gives us more opportunities."

First, Cisco unveiled the Cisco Spam and Virus Blocker, an appliance that grew out of Cisco's acquisition of IronPort two years ago, that molds IronPort's enterprise-class technology and makes it SMB specific. Valory noted that Cisco did not simply "dumb down" the technology to suit smaller companies.

"It's literally the same technology sold to large enterprises," he said.

The Spam and Virus Blocker offers protection for network and critical data from viruses and malicious e-mail attacks while also mitigating spam. Valory said it offers a 99-plus percent catch rate and false positives of one in 1 million, eliminating the need for small companies to use spam quarantines. The box also offers a simple GUI with a four-step install wizard, making it easy to deploy. The box requires no tuning or ongoing administration, Valory said. Security updates are automatically sent from IronPort's SenderBase e-mail and Web-traffic monitoring network.

"Put this thing in your network and spam stops," he said of the Spam and Virus Blocker, which for the SMB will run between $2,599 to $5,399, a deep discount from the enterprise edition, which carries a price tag of $10,000 or more. The price varies based on region and the number of users -- 50, 100, 250 -- and subscription length.

For Cisco SMB partners, the Spam and Virus Blocker offers simple setup and a single SKU with hardware and software support built in. It also offers a recurring revenue stream, since it is a subscription-based offering with one- to three-year subscriptions available.

"For the channel, the Spam and Virus Blocker offers a renewal stream. Partners can sell the product for $2,500 and get $2,500 every year in renewals and a chance to up-sell and add other products," Valory said, adding that the renewal rate is 99 percent.

Along with the Spam and Virus Blocker, Cisco unveiled the Cisco NSS2000 and NSS3000 Network Storage Systems. The network attached storage boxes offer auto backup, digital file storage and client and network backup. Like the Spam and Virus Blocker, the storage system offers an intuitive user interface and starts at an SMB price point of $595, Valory said.

NEXT: SMBs Get Communications System

Both the NSS2000 and NSS3000 use Cisco Small Business Continuous Data Protection to back up every version of every file from every PC and server for easy data restores. Digital files like video from an IP surveillance camera can be stored and archived and files can be encrypted to comply with regulatory and security requirements.

The NSS2000 is a 2-bay Gigabit Storage System Chassis that can store up to 2 TB, while the NSS3000 is a 4-bay device that can store up to 4 TB.

Last but not least, Cisco unveiled the Smart Business Communications System (SBCS) release 1.4, a solution set, not a stand-alone product, that offers a complete collaboration and communications system that easily connects offices, employees and customers from anywhere at any time, offering combined voice, data, video and security in an all-in-one system.

The system features the industry's first wireless desktop IP phone with Bluetooth capabilities, the Cisco SPA525G wireless IP phone. Other components include the Cisco 520 Secure Router to grant secure access to the Internet and data while working remotely, and the Cisco Configuration Assistant Version 1.9, which lets partners simplify setup and deployment of solutions.

The cost of the SBCS release 1.4 varies depending on the needs of a business. The wireless IP phone lists for $430.

Valory said all of the products offer new opportunities for the channel, allowing them to engage new customers and offer services based around setup and installation. He said Cisco currently has about 9,000 SMB-specific partners.

Digital Son's Smith said the first round of products to be birthed by Cisco's SMB initiative offer competitive advantages for VARs while also introducing new revenue streams.

"It allows them to compete with some of the subscription-based services like SonicWall," he said of the Spam and Virus Blocker, adding that because it is subscription-based, "partners like us can get residual income with the renewals."

And having the Cisco name, as opposed to Linksys branding, also helps sales based on name recognition, Smith said. Last year, Cisco said it would phase out the Linksys-branding of its small-business gear, making Linksys a strictly consumer brand.

"We can present a name that's not on their wireless router at home," he said. "It's Cisco now, it's not Linksys. It's for business, not the home."

While Smith said he was apprehensive at first about Cisco taking the Linksys name off of its SMB gear, he's now excited to bring it to customers while also stepping up Digital Son's ranks within Cisco's channel program.

"I feel better about this now more than ever," he said. "I'm very optimistic."

Andrew Sage, Cisco's vice president of worldwide small-business sales, agreed that Cisco's new SMB-focused products open up new opportunities for partners.

"We're delivering on our promise to help our Cisco channel partners best serve small businesses with purpose-built solutions that meet customers' fundamental business needs of security, connectivity and productivity," he said in a statement. "Our technology can be easily tailored by our partners so they can create the best solution for a small business's unique business needs."