“SMB is a High Growth Segment for Cisco in India”

By VARINDIA - 2010-02-18

“SMB is a High Growth Segment for Cisco in India”

How important is SMB market for Cisco? Why are you focussing on this market at large?
SMB is the fastest-growing segment for Cisco in India and worldwide. Cisco has spent over $3 billion on R&D to develop customized SMB products and solutions that are affordable and easy to use.

Our SMB market strategy involves helping customers to create a sustainable competitive advantage, improve their operational efficiencies, increase their employees’ productivity, and ultimately boost their returns and profitability. Our multi-pronged strategic roadmap to tap the rapidly-growing market for IT and networking of Small and Medium Businesses in India combines all crucial elements of Cisco solutions and services. These solutions and services are developed specifically for the SMB market, making it easier for these organizations to deploy and manage their networks to reach their business goals.

How are you going to tap this market?
Our plan worldwide is to create tailored solutions that maximize an SMB customer’s return on investment in technology and drive productivity and efficiency, by addressing their pain points. Once they have achieved productivity gains from their IT investment, they will be able to differentiate themselves and gain competitive advantage that impacts their bottom line.

Traditionally, financial services, banking, insurance, and telecommunications industries had been the early adopters of networking technology, which could be attributed primarily to their unique regulatory requirements and quality of service (QoS) needs. Today, emerging industry verticals are also showing increasing rates of technology adoption – manufacturing, retail, automotive, healthcare and IT-enabled services are key focus verticals for Cisco. This growth is driven by the transformed competitive landscape for each of these sectors. These sectors are now opening up to more competition, and existing players need to emerge on par with their global counterparts on all fronts. Cisco’s strong channel network with over 900 resellers in 100 cities gives us a nationwide footprint for our networking products and solutions, and we plan to add 600 new partners specifically certified to cater to SMB customers, especially in Tier-2 and Tier-3 markets. We also offer customized products and solutions specially targeted at SMB customers across the country, combining all crucial elements of Cisco solutions and services, including intelligent services, growth technologies, strategic partner assistance, world-class service and support and other attractive financing solutions.

What is your go-to-market strategy?
Our go-to-market strategy is through channel partners, who have enabled us to have a nationwide footprint for our products and solutions, with presence in over 100 cities through 900 partners. Currently, we work with around 10 System Integrators and 9 Gold Certified partners. In addition, we have Ingram Micro and Redington as our distributors There are many other companies who are also targeting SMB market at large.

How do you plan to take up this competition?
Cisco’s strategy for the SMB market is to eliminate complexity from the customers’ end. This includes design of products that provide plug-and-play capabilities and providing services such as remote management that will be provided by our partners. This will ensure that customers are oblivious to the complexity of the technology and they can focus on their core business, rather than the technology itself, which is simply an enabler. These products and services will also ensure that customers can avoid investing in costly manpower to manage these systems at their end.

In addition, Cisco provides customers with leasing and financing options that simplify the process of technology acquisition, and protects customers from technology obsolescence. Also, we focus extensively on training our partners so that they, in turn, can communicate the business benefits of our products to our SMB and mid-market customers such as better RoI and ease of use.

To ease a significant pain point of our partners, we have also launched our Sales & Marketing Service Offering (SMSO), which is our way of assisting partners with marketing collateral and communications as they speak with and engage customers. This has been well received by our SMB Select partners, and we are looking to have more than 600 partners signing up for SMSO in the next six months. To get closer to our customers across the country, Cisco has the “Network On Wheels” programme, amongst the largest marketing initiatives by Cisco in India. The Network On Wheels (NOW) mobile van visits strategic industrial locations across key tier I, II and III cities and hosts live demonstrations for more than 100 customers per city in the country. This reiterates Cisco’s commitment to India and its identification of SMBs as a strategic growth market. Some of the cities that the Network On Wheels (NOW) van has visited are New Delhi (NCR), Chandigarh, Ludhiana, Karnal, Lucknow, Kanpur, Varanasi, Jaipur, Ahmedabad, Pune Mumbai, and Hyderabad. Going forward, the NOW van will cover key industrial cities, including Coimbatore, Hubli, Guwahati, Raipur, Cochin and Surat, among others.

What is your market share?
SMB is a high-growth segment for Cisco in India and is already contributing significantly to our business in the region. Given the kind of investment potential that SMBs have, the segment will definitely grow to become a sizeable contributor to Cisco’s revenues over the coming years. Unfortunately, we do not share projections with regard to any specific market segment.

Do you have any special plans for channel partners to cater to the SMB market at large?
With 100% of Cisco’s business going through channels, Cisco’s success with any technology portfolio is dependent on the success of the channel partners to adopt and develop business practices around these technologies.

Cisco is committed to providing its partners with the highest-quality support. Some of the initiatives are given below:

Training: We conduct extensive training programme to equip our channel partners with the right skills and technical knowledge. These programmes are carried across Tier 1, 2 and 3 cities across the country. We also invite partners from remote location to attend training programmes at the nearest city.

Partner Help Online: Partner Help Online is a direct online support path for any partner issues, including complete pre-sales technical, and product design assistance. This helps partners to clarify their doubts on Cisco’s products, technology and solutions from anywhere in the country with the help of the Internet. Partners can also search the extensive knowledge base for information, or open a case for more support.

Rapid Fulfilment Depots: Cisco has an extensive support system for customers with 9 rapid fulfilment depots in the country. These depots help partners with spares and product replacement on a next business day, provided the partner has signed a service contract.

Distribution Network: We have an extensive distribution network with 30 stocking point locations across the country. Cisco can reach out to any city through these stocking points.

SMSO (Sales & Marketing Service Offering): Many of our partners have seen sales and marketing collateral and communication as a pain point. Since we have taken on this aspect ourselves, our partners can then spend time and effort in addressing the customers’ needs.

Project Prepayment Options: Significant percentages of the project cost are released to the partner by Cisco Capital when certain deployment milestones are reached. This ensures that our partners do not experience financial constraints when taking on large deployments financed by Cisco Capital.

What are the products that you are pushing for the SMB market?
There are various products that we plan on leveraging for the SMB segment. Our Webex acquisition is also aimed at penetrating the SMB market further through its on-demand collaboration applications, and its network-based solution for delivering business-to-business collaboration. This extends Cisco’s vision for Unified Communications, particularly within the SMB segment.

The following solutions are gaining prominence globally as well as in the Indian SMB sector:
• Security Solutions: Designed with the aim of safeguarding business with integrated network security
• Unified Communications: Solutions that lower costs for SMBs and expand business capabilities by adding voice and video to the companies’ data networks
• Mobility Solutions: Increase organizational productivity and reduce expenses while in the office, on the road, or at home
• Network Foundation Solutions: Provides strong infrastructure to support the evolution of SMB businesses by ensuring network security, reliability, and flexibility for business applications
• Management Applications: Simplify the network and enhance productivity by making the network easy to use and manage.

How important are tier 2 and 3 markets for you?
SMBs are spread across different towns and cities in India, and since Cisco leverages its channel partner network to reach out to the customers in the Tier-2 and Tier-3 cities, we believe that enhancing our partner skills in understanding the customer’s needs is the key to reaching out to this market and implementing our strategy. SMBs are maturing to the extent of seeing inherent value in IT investments, and while their investments in the product segment have traditionally been present, we are now seeing them also buying Services. We are fully committed to reaching our SMB customers where they are, and enabling them to transform their businesses.

Do you have any expansion plans in these cities?
Cisco’s strong channel network with over 900 partners in 100 cities gives us a nationwide footprint for our networking products and solutions, and we plan to add new partners specifically certified to cater to SMB customers, especially in Tier-2 and Tier-3 markets. Our SMB Select partners, who are focussed on the SMB segment, would have a significant presence in these markets, and it is through them and their network that we will reach our customers in these cities.


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