Cisco sets sights on small businesses

Cisco Systems is delving deeper into the small business space traditionally served by its Linksys subsidiary, prompting major changes to the channel strategy for this brand.

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Cisco Systems is delving deeper into the small business space traditionally served by its Linksys subsidiary, prompting major changes to the channel strategy for this brand.

At its annual Partner Summit this week, Cisco launched a set of unified communications products called the Smart Business Communication System aimed at firms with 20 or fewer staff.

Linksys, which Cisco acquired in 2003, has an extensive line-up of its own for small-business customers, including routers, switches, IP phones and voice gateways, in addition to its consumer home-network gear.

But Linksys products do not include the unified communications offered by Cisco, as their target customers traditionally haven’t seen a need for such advanced features and want to keep costs down.

This announcement shows Cisco is pushing those advanced features further down the food chain. Cisco has been pumping more resources into its small and medium-size enterprise (SME) products over the past few years to capitalise on growing demand in that market.

Over the next two to three months, Cisco plans to make it easier for resellers of the Linksys consumer and small business products to add Cisco products to their offerings and vice versa. Other changes to the Linksys unit, including becoming a sub-brand of Cisco will also be decided in this time frame, said Lauren Ventura, senior director in Cisco's global small and SMB group.

At the same time, Cisco has a programme that lets customers trade in Linksys gear for Cisco products, Ventura said.

The Linksys brand for business will go away eventually, but exactly when depends on customers, said analyst Frank Dzubeck at Communications Network Architects. Before that, Cisco will eliminate overlaps so there aren't, for example, both Linksys and Cisco routers or switches, he said. In the case of those types of products: "There isn't a reason in the world why the two should coexist," he said.

Linksys would keep smaller products such as cable connectors and surveillance cameras.

Philip Alfrey, director of business development at reseller Solid Networks, says that the company doesn’t sell Linksys products even though it is certified to do so. Cisco-branded products such as the UC500 offer small businesses the foundation of the company's higher end products, which they can build on as they grow, he said.

Another reseller of both lines, Brian Simms of Advanced Technical Solutions, said his company sells Linksys if customers specifically ask for it. The brand may be more popular among those who don't use system integrators, Simms said.

IDC analyst Ray Boggs sees the line blurring but thinks Cisco could benefit from two brands, which could force the Linksys and Cisco teams to "stretch and rethink and respond to the market”. There's some danger of confusion, but customers won't be left behind, he believes.

"The Linksys guys are not going to be put into the shadow," Boggs said.

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