Cisco Targets Small Biz With New Products, $100M Investment

Cisco Systems Thursday unveiled a $100 million global small business initiative that includes the launch of a new product portfolio aimed at customers with fewer than 100 employees.

The investment includes the creation of a dedicated sales team, marketing program and customized service and support, all targeted at small business customers.

Cisco's channel, including its certified, two-tier, DMR/retail and service provider partners, will be key to the vendor's small business push, said Andrew Sage, vice president of worldwide small business sales at Cisco, during a keynote presentation at the Cisco Channel Exchange press and analyst event in Lisbon, Portugal.

"Our channel will be a sustained competitive advantage for Cisco as we seek to grow our business in the 's' space," Sage said, referring to the small business market. In Cisco lingo, the small business market is classified as customers with fewer than 100 employees, while the SMB market is comprised of customers with under 250 employees. Sage said channel partners that choose to focus on small business customers will find opportunity for growth and profitability working with Cisco.

Key to the San Jose, Calif.-based vendor's pursuit of the small business space will be the launch within the next few months of a new product portfolio dubbed Cisco Small Business Pro. Currently, Cisco caters to "basic" small business clients at the low end with its Cisco Small Business and Linksys By Cisco lines and serves more sophisticated "elite" small business customers with its traditional Cisco portfolio. The new Cisco Small Business Pro family will target small businesses that fall in the middle, which the vendor describes as customers that are looking for ways to improve their businesses but aren't sure where to start, making them "open to guidance."

Cisco says the latter customer type makes up 48 percent of the small business market but represents 84 percent of that market's IT spend. The vendor estimates that the small business space represents a $10 billion opportunity for networking and communications products.

Next: Small Business Pro Products Coming Soon

Rick Moran, vice president of small business solutions marketing at Cisco, said the first of the new Small Business Pro products will arrive in early 2009. Among the new products slated to debut is a desktop network storage device that Cisco developed with help from IBM, a plug-and-play IP video camera with motion detection capabilities and a wireless VoIP desktop phone.

Going forward, all new small business products will be offered under either the Cisco Small Business or Cisco Small Business Pro brands, the company said.

Cisco's $100 million investment will fund several service initiatives, including the launch of a dedicated Small Business Support Center with operations in South Carolina, the Philippines, China and sites in Europe. Cisco is also launching an online small business support community, where channel partners and customers can share knowledge on technical issues. The vendor also recently launched a new small business Web site with tools powered by its WebEx online collaboration service.

One Cisco partner attending the conference said he has seen stepped-up interest from Cisco in pursuing the SMB space.

"Certainly in the last year we've been invited as a small/SMB partner to more Cisco events than we have before," said James Hughes, senior key account service manager at CCT, a solution provider based in Bristol, England.

Cisco in recent months has been steadily bolstering its push into the small business market, an area where Moran said the company is already doing $1 billion in business. The vendor in August integrated the Linksys Small Business Channel Partner Program into its own partner program. It also created a Cisco Small Business Council responsible for coordinating sales, manufacturing and engineering for Cisco's pursuit of the sub-100 employee market. The council is led by Sue Bostrom, chief marketing officer and executive vice president; Keith Goodwin, senior vice president of worldwide channels; and Ian Pennell, senior vice president of Cisco's Small Business Technology Group (SBTG).