Cisco/Linksys Targets SMBs' Networking Needs

Cisco must have big expectations from small business. During the past year, the company, long known for enterprise networking, has made a number of significant moves to bolster its appeal to small and midsize businesses (SMBs).

First, it launched a slew of networking products and services aimed at SMBs. That was a move many observers said was long overdue. Then it signed up small-business-focused D&H Distributing to recruit solution providers who sell to small-business customers. Now, Cisco's Linksys division is making the biggest splash yet in the small-business networking market with a product suite called Linksys One, fundamentally an IP-networking solution for SMBs with a managed-services twist.

The suite has all the essentials for any solution provider looking to sell SMB customers on a VoIP solution along with video, routing, switching, wireless, storage and security. The best part of Linksys One is that a solution provider need not install all of the components at once. It all makes for a nice tidy package--if it works as advertised.

Linksys is going to be making a great deal of noise about this solution in the coming weeks. VARBusiness was briefed recently by the Linksys team, led by Cisco veteran Nigel Williams, who is betting a great deal on the success of Linksys One. This is Williams' coming-out party, and he is personally spearheading the effort knowing that Cisco CEO John Chambers is carefully watching the launch and will be monitoring the results. If Linksys One is successful, Williams could emerge as one of the most influential channel executives for 2006.

Timing is definitely on this British-born, soccer-loving executive's side. In our just-completed State of Innovation survey, more than 450 solution providers ranked VoIP as the most innovative technology in the market today, far ahead of storage, security and data networking. Williams understands that if VARs view VoIP as innovative, then they also must believe the sector holds promise from both revenue and margin perspectives.

In designing the new solution, Linksys took 13 top Cisco engineers who developed Cisco's original VoIP technology and asked them to take it "down market." The team was asked to make the VoIP solution easy to install and set up, which I found to be so during a demo at the CMP Channel Group's CRN Test Center. Figure on selling the Linksys One for roughly $3,000, which includes a router, gateway and five IP phones, plus an additional monthly cost for the voice and data services. A leasing option is available as well.

Now, here comes the part that might make you uncomfortable: Linksys is not doing this alone. It is enlisting the help of service providers, with MCI the first to provide support for the initiative. Relations between service providers and VARs, particularly in the Cisco world, have not always been--shall we say--simpatico. But MCI vows it's turning over a new leaf and needs VARs more than ever to help sell Linksys One. I am always skeptical when I hear phrases like, "It's the VAR that owns the relationship," coming from service-provider executives. But with Linksys by its side, MCI stands a good chance. However, the old telcos have tried before, and I'm sure you have a few war stories to share about your dealings with the likes of AT&T.

Speaking of product launches, let me ask you: How well are your vendors preparing you for product launches? Are you getting the needed sales and technical training to comfortably explain the latest server or storage product to your customers? I have a sneaking suspicion the answer is no. While channels have been fully embraced as part of the corporate strategy, a continental divide between product and channel organizations still exists. For proof, look no further than our recent XChange Tech Innovators Conference, where a panel of CTOs from a variety of large vendors were grilled by solution providers, who are struggling with the investments they need to make in new technologies and the risks associated with them.

For instance, many VARs said CTOs do not fully take the channel into account when they decide to kill a product. It may be a rounding error to a large IT organization, but not to the solution provider who has put scarce investment dollars into training, sourcing and sales materials.

Think for a moment how well-prepared you are when, say, Intel, IBM or Microsoft bring out their latest wares. Executives from all those companies and more tell me they have not yet found the right formula for maximizing product launches. Plan to hear more from me on this topic. In the meantime, let me know the last time a vendor got a launch right and which ones have left you twisting in the wind at rdemarzo@cmp.com.