Wednesday, April 4, 2007

Can Cisco Conquer the SMB Market?

I'm at the 2007 Cisco Partner Summit in Las Vegas this week. Cisco sure knows how to put on a show, and this is a pretty big scale operation. Yesterday's sessions were pretty intimate though, and it was a great chance to hear about Cisco's vision for supporting their channel partners (and they're here in the thousands), as well as what they have in mind for the SMB market.

I've got a few posts coming, and this one just focuses on the SMB sessions from yesterday. We saw a number of presentations about the SMB market opportunity and how Cisco plans to attack it in concert with their channel partners. They pointed out that it only generates $1.5 billion for them today, but longer term, they think it will surpass their enterprise sales, which is a pretty bold statement. Their view is that SMBs are now ready to be "transformed" by IT the way enterprises have already been transformed.

To make this happen, they've announced a number of SMB initiatives. First and foremost is the "Cisco Smart Business Communications System". That's a mouthful, but it's basically a complete SMB solution in a box (UC 500) that brings the whole unified commmunications experience to this market - voice, video, data, mobility, security, VPN, etc.

As Rick Moran explained, this solution "leverages the best of Cisco's enterprise business" down to the SMB level, and most importantly, it's easy to use. It was often pointed out how this can be up and running, out of the box, in 15 minutes. That's pretty impressive, and as Rick said - the best line I've heard here so far - "it's plug and play - not plug and pray". Great point - that really resonated with the audience.

Perhaps the most promising aspect of this Cisco-in-a-box solution is its support of third party apps. They cited big name examples like Microsoft CRM 3.0 Connector, and Outlook integration, but I think the fun stuff will be in their support of lesser-known specialized apps, especially those targeted at vertical markets. Richard MacLeod and Vikas Butaney gave a great example of this with IPcelerate, and their demo for a health care solution.

To support the channels for selling to SMBs, they've announced a new program for them, called Select Certification. This shows their understanding that selling to SMBs requires a distinct set of competencies and resources. A big part of this, actually, is finding skilled people who can support SMBs. It was often mentioned that this type of talent is in short supply, and Cisco will be focused on helping channel partners find and support this pool of people. I think is a great example of why Cisco is so effective in supporting it channel partners.

I'm just hitting the high points here, and yesterday's press release provides more detail about these iniatives, availability and pricing.

So, the big question is this - can Cisco pull this off? Can they conquer the SMB market? We all know how different this is from the enterprise market, where Cisco has elevated things to a high art. They certainly seem to have all the pieces in place, and I think their approach to productize their offering with the UC 500 is the right way to go. To me, the plan is sound if SMBs grow over time, and they graduate to larger scale solutions. My sense is that many SMBs remain SMBs, and if they don't scale up, I'm not sure how attractive this space will be for both Cisco and the channel partners.

Cisco is keen to invest in their channels to properly support this market, and we'll just have to see how ready SMBs are for Cisco and this type of solution. There's a lot of educating that needs to happen here, and for SMBs that get it, and can see that this is a better way to do things, Cisco will do well. They won't get 'em all, but certainly for SMBs who see what's possible today - and want it - this event is time well spent for the channel partners.

With all that said, I keep asking myself - what does the Blue Man Group have to do with this? It's hard not to miss them here at the Ventian Hotel, and now I know why. If you've seen them, you'll know what I mean. If you haven't - you really should - it's a great experience.

In a lot of ways, Cisco selling to SMBs is like selling to the Blue Man Group. You can see them, but you don't know what they're thinking. You think you've got something they're really going to like, but they just look back at you with a blank stare! Maybe they get it, and maybe they don't. Time will tell...


I'll leave it at that for now, and will pass on some photos of the event - as usual, courtesy of my Nokia N93 uber-phone. More posts coming later.


Peter Alexander, Keith Goodwin

Richard MacLeod and Vikas Butaney, Rick Moran

Group Q&A

View from hotel room - like Cisco's vision, the view is expansive...


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