Cisco eyes future Linksys strategy

It plans to make it easier for Linksys resellers to add Cisco products to their offerings and vice versa

Cisco Systems Inc. is modifying the channel strategy for its Linksys consumer and small-business brand as the enterprise networking giant moves deeper into its subsidiary's traditional territory.

Over the next two to three months, Cisco plans to make it easier for Linksys resellers to add Cisco products to their offerings and vice versa, said Lauren Ventura, senior director in Cisco's global small and midsize business group. The company is also considering a change to its Linksys brand strategy, she said. A decision on this move, which might involve making Linksys a sub-brand of Cisco or some other change, will probably be made in the same time frame, according to Ventura.

Cisco has been putting more resources into small and midsize business products in the past few years in response to fast-growing demand in that market. On Tuesday, at the annual Cisco Partner Summit in Las Vegas, the company introduced a set of unified communications products called the Smart Business Communication System and said the offering was aimed particularly at organizations with 20 or fewer employees.

Linksys, which it acquired in 2003, has an extensive lineup of its own for small-business customers in addition to its consumer home-network gear. The business line includes routers, switches, IP phones and voice gateways. The difference is that Linksys products don't include advanced features such as unified communications, which combines voice calls and messaging and can integrate them into applications, Ventura said. The wholly owned subsidiary's products are suited to customers that don't see a need for such features and tend to be looking for a less expensive product, she said.

However, Cisco's push for those advanced features moved farther down the market with Tuesday's announcement. At the same time, Cisco has a program that lets customers trade in Linksys gear for Cisco products, Ventura said.

Solid Networks Inc. is certified to sell Linksys products but doesn't, said Philip Alfrey, director of business development at the reseller in Modesto, Calif. Cisco-branded products such as the UC500 offer small businesses the foundation of the company's higher-end products, which they can build on as they grow, he said. Another reseller of both lines, Brian Simms, vice president at Advanced Technical Solutions LLC in Scott Depot, W.Va., said his company sells Linksys if the customer specifically asks for it. The brand may be more popular among those who don't use systems integrators, Simms said.

The Linksys brand for business will go away eventually, but how long it takes will depend on customers, said Frank Dzubeck, an analyst at Communications Network Architects Inc. Before that, Cisco will eliminate overlaps so there aren't, for example, both Linksys and Cisco routers or switches, he said. In the case of those types of products, "There isn't a reason in the world why the two should coexist," he said. Linksys would keep smaller products such as cable connectors and surveillance cameras.

IDC analyst Ray Boggs said he sees the line blurring but thinks Cisco could benefit from two brands, which could force the Linksys and Cisco teams to "stretch and rethink and respond to the market." There's some danger of confusion, but customers won't be left behind, he said.

"The Linksys guys are not going to be put into the shadow," Boggs said.

Copyright © 2007 IDG Communications, Inc.

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