Small Business Group born of Cisco-Linksys merger

Yesterday, the merger between Linksys and Cisco finally took a concrete shape with the formation of the Small Business Group, which will now assimilate all the Linksys channel partners into the Cisco network.

Said Sanjeev Gupta, Linksys Channel Director APAC, "This is a win-win situation for Linksys partners because they will now have access to Cisco's channel programs and training modules which will better equip them to carry the existing Linksys products to the small and medium (SMB) customers on an integrated platform."

Globally, partners who are currently registered under the Linksys Partner Connection program will have to make a transition to the Cisco Channel Partner Program (CCPP) by September 16, 2008, failing which they will be retired from the program. They will be asked to register on the CCPP program to continue to be the authorized Linksys aka Cisco partner.

"This is the first step in building a combined go-to-market model that will integrate the broad Linksys Business Series portfolio with the innovation, quality and heritage that has made the name Cisco synonymous with SMB to Enterprise class networking," according to a release posted on Linksys website. Gupta also added that this development was not unexpected. "The entire Cisco-Linksys merger was aligned for having a single entity, which has been named the Small Business Group, to cater to the needs of the SMB customers. Linksys products will now focus more on the consumer market," he said.
Of course there is a flurry of questions coming from partners who seem to be caught unawares of this decision. There are several overlapping products, especially on the layer-1 and 2 level, that exist with Linksys as well as Cisco. It is expected that some of these will be phased out and partners are now awaiting to know more about the product roadmap.

"Earlier since Cisco SMB products were priced higher than the Linksys ones in this space, we had the option of choosing one over the other depending the client's requirements and budget. Now if the products are going to come from Cisco, which has always been a premium brand with higher pricing, it is likely that they might go for a price hike to keep with the brand's overall strategy as a premium brand. Then that choice is removed from our hands," said a Linksys partner on condition of anonymity. He did not rule out considering opting for other networking brands instead.

But Gupta said that hiking of prices is unlikely to take place. "There will be product rationalization, but a hike in price might not happen. This is because the products are targeted at the SMB market which is price sensitive and Cisco is aware that if it hikes the prices then it might be detrimental to its business," he noted.

Instead he drew attention to the sunnier side of this amalgamation. "With an integrated marketing activity, partners can look at more customer eyeballs. Also, the distributors for both the brands in most countries were the same, so logistics and even channel management will be much easier now," he opined.

But Linksys partners are worried that they will now have to undergo more intensive certification to scale up to the various levels of CCPP, which might not be feasible for them. "I have a small team of five people and it will not be possible for me to have two of them trained on various Cisco products at all given time, especially with the attrition rates amongst technical people being so high. I think in such a case I will lose out to other stronger channel partners who can invest heavily on training," said another Linksys partner.
These might be the initial knee-jerk reactions from the channel following the announcement, which Cisco will no doubt work on dispelling over time. But till then the channel is likely to be on tenterhooks.

(Use as BOX item)
What the merger will offer Linksys partners:

- A broader and even more comprehensive portfolio of solutions and resources to better serve the small and medium sized business customer.

- Additional training and knowledge transfer events, covering the expanded portfolio, solutions, verticals, marketing, and partnership opportunities.

- Access to the Cisco brand and higher levels of certification--all equating to increased profitability.

- SMB marketing and demand generation assets, programs, and special promotions.

- Access to the comprehensive and customizable Cisco Partner Intelligence (CPI) Newsletter.

Source: Linksys