Cisco Systems has announced a new channel partner program to promote its Linksys division products to small businesses. Most of the technical equipment buying decisions for the SMB market are made through outside consultants which forces the Ciscos of the world to sell through a network of partners. The company that does the best job convincing parters to push their products wins.
To encourage its partners, Linksys will be offering a new program that offers lead-generation support and market development funds. Cisco will also be trying to convince their resellers to take its higher priced competitors like HP, 3Com, Netgear and D-Link off their roster and focus solely on Linksys. How the company plans on executing this strategy is still unclear.
A challenge facing Cisco is that Linksys is seen more as a consumer or SOHO play. Despite having a full roster of products, Linksys solutions are not usually considered as options for SMBs. It will be an uphill battle to get SMBs to look at Linksys as a viable alternative to the more entrenched players. By the same token, the Cisco brand is seen as being for big business only. Can Cisco narrow the gap and get some SMB market penetration?
The answer will lie in an effective partnership strategy. Their new channel program is scheduled to be announced on June 5th at their Connected Office Day event. Time will tell if they new incentives are good enough to propel them forward.
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Cisco announced at its Worldwide Partner Summit in Las Vegas that it is now going to target the small business market with a new unified communications product. The Smart Business Communications Systems is meant for businesses with under 50 employees and the company sees this sector as being a $10bn market opportunity by 2009.
Cisco hopes to sell the solution through its partner network and has also introduced a new certification programme for small and medium-sized businesses.
According to Ann Sun, global SMB market group senior manager at Cisco: "One of the things we see is that the SMB market is highly segmented, and many do not know how this technology can help them. It is not just a solution itself, but a delivery through our channel partners."
What does Cisco need to do to win over SMBs?
Partner Strong - Most of the technical infrastructure in SMBs is setup and run by outside contractors. The Cisco partners will be key to getting this into the hands of SMBs as most small businesses do not have the technical knowledge or knowhow to do it themselves.
Make It Better - Cisco will have to prove that their system truly is better than the other alternatives. There can be big switching costs and small business owners want to focus on growing their business, not handling technology.
Offer Financing - Small businesses owners routinely have to manage their cash flow. If there is a solid financing package in place it will be a much easier financial pill to swallow.
EvanCarmichael.com is the world's #1 website for small business motivation and strategies. Evan also runs a series of successful Mastermind Groups in Toronto for entrepreneurs.
