Cisco shows discipline, pragmatism in SB focus

I recently attended and "Small Business Analyst" event hosted by Cisco in which the Company talked to us analyst types about their strategy in approaching the SB market on a worldwide basis. The conference lasted a day, the group of attending analysts was small but well represented including leading names in the IT analyst market such as Gartner, Forrester and Yankee Group.

New products were showcased and strategies outlined and while I won't go into detail about new products due to non-disclosure conditions on many of them and also because it wasn't the products that impressed me the most. Make no mistake the products did impress me and my colleague - enough for us to decide that we should evaluate them for our own business.

What impressed me the most was the focus and disciple Cisco has brought to bear. Too often we see companies that are leaders in the enterprise space take on the SB market opportunity under the rationale that what's good for enterprise is good for SBs - with a few changes. Wrong. Too often we have seen it doesn't work and when it doesn't these firm redefine "SB market" to simply mean companies that are a little bit smaller than their traditional market and calling it SB or worse "SMB". The latter often used as a catch all for all those firms that are currently not being sold to be the comapny's sales force which is too boxed in in their thinking of who their customers are and how they should be sold. Its organizational inertia at work.

Cisco, themselves a leader in the enterprise space is approaching the market as any company in it's position should - with a strategy, products and organization designed to address SB needs. Here are some of the key elements

• Cisco has created an entirely new group to not just market products to SBs but to design products that fit SB needs. The product development group will re-think products ranging from simple routers, switches to telephony products keeping SB needs as their sole perspective. For a company used to enterprise style margins on products they have realized that they may not be able to gain the same kind of margins on thee SB products but the important point is that they are incorporating that reality into their strategy. This is a very difficult shift to make for most companies but Cisco realizes it is not just about how products are manufactured but how the organization is structured as well.

• Speaking of organization, the Cisco SB organization is in many ways a company within a company with its own set of priorities and complete in that it has its own sales, marketing, services, support and product development initiatives.
  
  
  • Marketing: Cisco has come to terms with some market realities such as the fact that the Cisco brand is not well known among SBs. Cisco's VP of Small Business Marketing Rick Moran, stressed this point as a major component of their SB marketing strategy. Here again we see Cisco's pragmatism, willingness to adapt and learn come through. For a company traditionally used to talking about speeds and feeds their SB marketing efforts exhibit a focus on SBs and the people running them. The importance of SB to Cisco as a company is evident from the fact that there is a link to a variety of SB related pages on the Cisco home page. Cisco has established a place where SBs can have a conversation with Cisco, its employees and its partners called Cisco Community Central. the site is less used to market Cisco products and more to help SBs learn about the developments relevant to them - technological or otherwise. It's a young site - barely a year old but a promising start.
  
  
  • Sales/Channel Development: Cisco has always relied on a strong network of channel partners to sell, service and support its products. Now Cisco has introduced a special certification for channel partners selling to SBs called "Cisco Select Certification". Achieving that certification requires taking training and an exam. Interestingly, Cisco has laid out the return in investment for a channel partner to help them decide whether it is worth it to achieve that certification or not. Achieving the certification comes with the usual benefits of support and market development funds.
  
  
  • Regional Sensitivity: Cisco is showing a lot of pragmatism by not taking a "one-size-fits-all" approach to SB marketing. The bulk of the current SB effort appears to be targeted towrads countries where Cisco has a leadership position in the enterprise space. In other words, given their penetration of enterprise markets its seems logical to go after SB markets in order to increase revenues from a region. Also not all solutions are being marketed aggressively to SBs in all regions. For example, in countries such as India where are large opportunity still exists among enterprise markets for solutions such as collaboration or enterprise network hardware, the SB market is taking a back seat - for now.
  
  
  • Services and Support: Cisco VP Sherri Liebo introduced the services and support offerings targeted towards SBs. These include add-on warranties and varying levels of support for channel partners as well as end customers. The support solutions range from entry level technical support (branded as Smart Foundation services) to ongoing monitoring of network resources (SmartCare and SmartNET). All have varying levels of support and hardware replacement options. These will also be sold through the burgeoning network of SB channel partners.
  
  
  

Bottom line - I believe Cisco is off to a good start in the SB space exhibiting the focus and discipline required to gain share in this very difficult market.

Abhijeet Rane
Techaisle