Cisco goes after the little guy

By Phil Hochmuth, NetworkWorld.com, 11/16/05

Through its new Linksys One launch, Cisco now claims to be looking out for the little guy — that is, business customers with five to 99 employees.

But of course the move is not completely out of largesse; by tagging this new business line an "Advanced Technology" Cisco is all but guaranteeing that it can make over $1 billion in revenue by selling to network gear bundled with services to small business.

Linksys One involves small-office VoIP and data gear, combined with hosted services from a carrier (MCI, initially) with management and "customer touch" provided by local equipment/services resellers.

"The one nut so far that no one has really managed to crack managed services," said CIBC analyst Steve Kamman in a recent interview. Cisco seems to think it will crack this market by combining larger service providers such as MCI, with local VARs and resellers, who have the contact with small businesses on the local level. Cisco's says carriers along failed to crack the small-office services market because the low-cost equipment and simple management capabilities were not there. VARs have the contact with small businesses, but can only install what is available from vendors and carriers - and profitable to resellers. Whether bringing together these three fronts- the gear from Cisco, services from carriers, and customer sales and support from resellers - will provide enough revenue to satisfy each group remains to be seen.

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