Cisco looks to court smaller customers

Cisco this week will announce several programs aimed at making its resources and products more accessible to small and midsize companies.

SAN JOSE – Cisco this week will announce several programs aimed at making its resources and products more accessible to small and midsize companies.

Customers will now be able to buy products from Cisco’s Web site, through arrangements made with four channel partners. Cisco also is expanding its lineup of integration and project planning services for small companies. Some observers say this announcement comes as a “reminder” from Cisco as new foes threaten to muscle in on the company’s traditional turf.

Products aimed at small and midsize customers, such as Catalyst 2900 stackable switches, Cisco 800 series routers and low-end PIX firewall and VPN appliances, can now be bought from Cisco’s site through links with Cisco resellers CDW, PC Connection and Microwarehouse.

Companies also can use Cisco’s new Internet Business Roadmap service, which is a Web portal that provides access to Cisco technicians when customers are planning network infrastructure or security projects. Cisco says it will have some enhanced switching and security products and IP telephony product packages for small businesses by year-end.

With large corporate IT spending being flat, and only about 30% of Cisco’s revenue coming from the carrier markets these days, observers say Cisco is looking to ally itself more closely with smaller businesses. Cisco CEO John Chambers hinted as much while speaking at the Gartner Symposium/ITXpo earlier this month.

“Among businesses, the economic recovery will be led first by small and [midsize] businesses,” Chambers said. “Then enterprises will follow, then service providers.”

Cisco has been no slouch in the small to midsize business (SMB) market for network gear, either. For the past three years, the company has dominated the market for stackable Layer 2 switch port shipments, which is the most commonly used network technology among small and midsize companies. In 2001, it had 59.7% of the ports, with its closest competitor having 7.5% of the market.

Dell is another company that is pursuing the SMB network market aggressively. The company last year released a line of network switches amid sagging sales of consumer PCs. Some say Dell could have a major influence on the market, as it begins to drive Gigabit Ethernet technology to the desktop by making 1000M bit/sec network interface cards standard on its PCs.

Cisco has reacted strongly toward Dell’s entrance into the network business, as it recently canceled an agreement with the PC and server maker for it to resell Cisco network hardware. 3Com also recently canceled a similar agreement with Dell.

“The low-end network market is certainly getting more fierce . . . with lots of new competitors,” says Kneko Burney, a small and midsize business analyst with Cahners Instat/MDR. She cites Dell and Microsoft, which recently introduced a line of wireless LAN products for home users.

“Dell is on the lower end of switching, but that’s it,” Burney says, but adds that many small-business networks are requiring more advanced products.