Blog Post

In VoIP, Cisco thinks small to go big

Cisco is announcing Tuesday a somewhat expected push into the small-business Voice over IP market, one that enlists resellers as key allies in the search for the ever-elusive SMB.

The networking king joins an SMB VoIP race that is getting considerably crowded, with equipment and software manufacturers (Microsoft, Nortel, Avaya) and hosted-service providers (Covad, Best Buy) all angling for part of a market that is typically estimated to be in the multiple billions. While its offering has a bit of a Cadillac price tag, it may be Cisco’s game to lose since its strategy seems well thought-out with incentives on both the customer and reseller side of the equation.

Called the Smart Business Communication System (apparently telecom stuff doesn’t get any creative naming), Cisco’s package offers more than just an integrated voice system — it allows users (and resellers) to add in wireless infrastructure, small routers and integration with vertical-application packages.

Pricing is somewhat of a grab bag, since the final sticker may vary widely depending on what pieces-parts are delivered (IP phones, routers, wireless access points), or whether or not the reseller offers the bundle as a managed/hosted type service. Rick Moran, VP for Cisco’s unified communications marketing, estimates that typical SBCS deployments would cost around $600 to $700 per seat, phone included.

Cisco’s target for its SMB offering is in the just-under-99-seat range, a market segment that may be a bit higher in functionality needs than the businesses who might look at Microsoft’s promised phone-in-a-box offering, or to Fonality’s or Digium’s no-cost open-source PBXs. While Moran said ease of installation (“Our target is to have phones working less than 5 minutes after plugging the boxes in”) is still a criteria for Cisco’s intended SMB base, it’s probably more likely that a Cisco SMB VoIP sale will come through one of the company’s thousands of reseller partners, who may want to bundle wireless, Internet access and web hosting together as part of an integrated small-business communications package.

To that end, Cisco’s new plan (scheduled to be announced Tuesday at a partners meeting in Las Vegas) includes incentives for resellers to get up to speed via training, such as co-marketing plans and financing support. Those features, combined with the designed-in ability for the Cisco products to scale or integrate with larger corporate operations, makes the Cisco VoIP-and-more a probable solid choice for the IT manager who isn’t necessarily concerned about getting the cheapest system out there.

2 Responses to “In VoIP, Cisco thinks small to go big”

  1. Paul
    I think that this story is more complicated than at first glance. This end of the market i s very competitive and is dominated by hosted solutions from traditional carriers. Although we in the IT industry get excited by new feature function, the market is dominated by SMB companies that look at cost, capital requirements etc for their business. Will the domination of the ATT, Verizon, Quest, XO, Covad etc etc in this space relies largely on some change in business buying patterns which we have not yet seen in any substantive way at the sub 50 seat market. Will Microsoft or Cisco or anybody else change that remains to be seen.