Cisco launches unified communications for small businesses

Networking gear company steps into untapped market

Cisco Systems Inc. announced today a new Smart Business Communications System to give unified communications capabilities to even the smallest businesses.

The system, which includes a new switch/router called the Unified Communications 500, brings Cisco squarely into a relatively new market for small businesses valued at $10 billion annually, analysts and Cisco officials said.

The Unified Communications 500 Series switch/router incorporates call-control software and will support a Cisco Unified IP phone with a focus on easy setup and management, Cisco officials said. "It is a Swiss Army knife approach," said Rick Moran, vice president of marketing for unified communications. It will be available at $699 per seat in June, with one IP phone per seat.

The Unified Communications 500 comes with Cisco's previously announced Unified Communications Manager and Unity Express software. A Cisco Configuration Assistant, available at no extra cost, is designed to reduce setup time and to help configure telephony, messaging, switching, wireless LAN, firewall and other security features, Moran said.

Cisco picked IPcelerate Inc. in Carrollton, Texas, to provide customized business productivity applications for the new system, giving small businesses a set of prepackaged codes and interfaces, depending on the vertical industry they are in, said IPcelerate CEO Kevin Brown.

For Cisco, the small business unified communications technology represents a new market that Cisco has not tapped into, Brown and Moran said.

In many cases, Cisco's small business system will be the first time a set of communications capabilities are combined in one place, analysts said. Several large vendors sell voice switches that small businesses can use, but creating an affordable set of applications designed for small businesses is something new, analysts said.

"For many small businesses, frankly, they don't know who Cisco is," said Deb Mielke, an analyst at Treillage Network Strategies Inc. in McKinney, Texas. "Cisco has made the technology simple for small businesses."

Mielke said the small business market, with sometimes eight to 15 workers, is often ignored by major vendors but is potentially lucrative. "It's one of the last areas that Cisco can enter," she said.

The small businesses should consider the Cisco system as a way to control costs over antiquated, paper-based systems that rely on "pieces of paper or Excel spreadsheets," said Steve Hilton, an analyst at Yankee Group Research Inc. in Boston.

Zeus Kerravala, another Yankee Group analyst, said Avaya Inc.'s IP Office is probably the closest product to what Cisco announced, "but is not nearly as feature-rich as this Cisco product." He said Nortel Networks Corp. could have entered this market, "but missed the bull's-eye."

Brown said all the major communications equipment makers. including Avaya, Nortel and Cisco, recognize the need to build applications atop their hardware, although Cisco has the lead. Microsoft Corp. has also been building applications for communications networks, he noted.

Copyright © 2007 IDG Communications, Inc.

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