Déjà vu: Cisco goes after SME market

SMB sales doubled over the last six months, Cisco ANZ VP says

Cisco ANZ has announced a renewed focus on the small and medium business market, including plans to launch a digital sales channel.

The announcement was made by Cisco ANZ VP Ken Boal in his annual ‘State of the Business’ address to journalists at CiscoLive in Melbourne.

Boal said the company had almost doubled its sales to SMBs in the past six months. “We have seen our run rate move from low one million [dollars] per week to about a couple of million a week in just over six months, just by focussing.

“The first step we have made is in the 20-50 user businesses where the growth has been really strong. Our distributors have been really helpful, and we have incentivised them.”

He added: “That takes the pressure of having to drive the big deals every quarter. SME is a market where we have quite a low share. There is a lot of room for us to grow.”

“We have a lot to do in the mid market and up but we are keen for growth,” Boal said. “I would like it to be closer to double digits than single digits, and you have to look in every area to get top line growth.”

Boal acknowledged that this was not Cisco’s first foray in SME, saying: “We have been in and out of SME. We are now here to stay in SME and we are seeing tremendous traction.

“A lot of Cisco’s pedigree has been at the larger end of town and a lot of the leadership infrastructure has been focussed on that. Now we have really shifted our gaze and some of our investment to SMEs.

“We have a better portfolio. We have been more aggressive with our pricing and programs through distributors, and working with service providers as a channel.”

(Cisco’s most significant foray into SME was its 2008 acquisition of Linksys. That was followed in November 2008 by a US$100 million global strategic initiative focused on small business networking and communications solutions for companies with fewer than 100 employees. Linksys was sold to Belkin in 2013.)

Digital sales channel ‘imminent’

Boal said the push into SME would be matched with the “imminent” launch of a digital sales channel. However, he said this would be in conjunction with partners, not an avenue of disintermediation, and that the digital channel would be a global initiative, with Cisco Australia at the frontend of the program.

 “We are evolving our marking capability we have brought a lot of new blood into the marketing team to crate these new digital programs and leverage cutting edge B2B digital.

“We are not proposing to launch a direct Cisco digital model. Our partners would be part of it.”

Boal defined the SME market for Cisco as sub 1000 users. “We don't have a portfolio for the sub five user business yet, but we are looking at the economics of it.”

Boal said the idea of a SME focus had come from Cisco APAC. “We have had good success with SMB in other parts of the region and the APAC leadership have been instrumental in helping the ANZ business understand the SMB opportunity.”

The author travelled to CiscoLive as a guest of Cisco

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