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  • The S of SME is Cisco's next target

    While the technology is in place, an analyst says getting the channel marketing strategy right may be the real key to success. The past year saw Cisco very busy on the SME front with the launch of Smart Business Communications Services (SBCS), its SME-centric network platform of solutions, as well as its Select Certification program for SME-focused partners. On the Linksys side, the Linksys Connected Office platform targeted at SMEs was re-launched as well as a revamped Linksys partner program designed to better leverage the Cisco relationship. In an interview at C-Scape, Cisco's annual press and industry conference, Rick Moran, vice-president of solutions marketing Cisco Systems, said 2008 should be less busy from a news perspective, with the focus being on tweaking and enhancing the new programs based on partner feedback. "We'll be focusing on better integration of the different divisions that sell to the SME, as well as pulling together the channel programs and messaging,"said Moran, including showing a partner that starts with Linksys, for example, how they can advance to the next stage. "It was rather segregated before." That process has already begun with the recent re-branding of a number of previously standalone brands. New marketing is being developed to tie the previously standalone Ironport, Linksys and Webex brands more closely to the Cisco brand name while still maintaining their own individual identities. "Tying these together is a critical part of where we're going and where we're going to be,"said Moran. "We think it's very important to get a uniform look and feel." In its research on the SME space, Moran said Cisco does have a challenge becoming known as a company that plays in the SME market. They've also identified storage as a key interest area, and learned that the type of partner SMEs like to buy from is different from the partners enterprise companies prefer to work with. "We found a definite division, a lot of SMEs like to buy from VARs that are also SMEs," said Moran, adding that means the support Cisco needs to give those partners is different. The way those partners need to sell to SMEs is also different, he said. While technological talk is already on the outs at the enterprise level with business value becoming the preferred conversation, for the SME it needs to be drilled down even deeper and made relevant to the SME owner. Talking about disaster recovery won't fly. "We're actually rewriting hundreds of documents in our organization to make them more SME friendly," Moran said. Cisco is already a multi-billion dollar business in the SME, but while it has 40 percent penetration in the M segment of SME that rate falls off significantly in the S component. The challenge for Cisco, said Moran, is how far down to segregate that business, and along what lines to take distinct approaches. The need is for both volumes of channel and channels of volume. "I don't know how far we're going to micro segment it," said Moran. "Right now the big thing is showing we've got our bases covered and showing we've got something that suits your needs at this point in time. The opportunity for us is to make those small partners feel we can make them money and grow their business." The challenge more Cisco in the SME is two-fold said Jon Arnold, a Toronto-based analyst with J. Arnold & Associates. They have the technology in place, but the channel strategy will need to be a very different model from what they've been used to in the enterprise space. The second challenge will be selling the marketplace on Cisco (or Linksys) as an SME player. Without the incumbency that its pervasive routers and telecom equipment gave it in the enterprise space, Arnold said Cisco is starting from scratch in a very crowded, competitive market. While Cisco has high-end tools and technology that only appeals to a segment of the SME market, he said. Most of the space is very value-driven, so it will take a new approach from Cisco to earn their trust. "It's going to be a harder market to crack then the enterprise space," said Arnold."They've got to start from scratch like everybody else and earn their way in, and I think that's going to take a little longer then what they're used to doing.