Cisco Aims To Bring Managed Services To SMB Market

Cisco Systems is embarking on a new strategy to marshal its solution provider and service provider partners to deliver managed services to small and midsize businesses.

At the Cisco Partner Summit in Honolulu, Nigel Williams, vice president of Cisco's worldwide service provider channels, said the networking vendor aims to foster partnerships that would enable VARs and integrators to resell managed services built by service providers on Cisco technology, particularly in areas such as security, IP telephony and storage.

Through partnerships, service providers like ILECs (Incumbent Local Exchange Carriers) and IXCs (Interexchange Carriers) could tap solution providers' role as trusted advisers on the data side to sell services such as managed IP-VPN to customers with fewer than 1,000 employees, Williams said.

"From the security perspective, there is a constant threat, and constant changes are required to infrastructure to be secure," he said. "Trying to maintain that yourself is virtually impossible for the commercial [SMB] market."

At the same time, solution providers could benefit from the scalability of service providers' offerings, which would be difficult for VARs and integrators to match, Williams added.John Freres, president of Meridian IT Solutions, a Schaumburg, Ill.-based solution provider, said he would consider a partnership with a service provider to offer customers a full line of services. "I have no interest in developing those sorts of offerings under my own brand," Freres said. "[Service providers] have the size, breadth and depth to deliver them."

However, some solution providers at the conference said they would be reluctant to work with Cisco's service provider partners, many of which are their competitors.

"We don't want to resell those services. We want to sell our own services," said Phil Mogavero, president and CEO of Data Systems Worldwide, a solution provider based in Woodland Hills, Calif.

Some solution providers said they would prefer that Cisco help them build managed services capabilities in their own network operations centers instead of trying to drive business through lower-end data partners that are unwilling or unable to build up their own service offerings.

Williams acknowledged the potential for channel conflict, noting that participating service providers would have to develop clear rules of engagement, equal compensation for their direct-sales forces and a long-term commitment to the strategy. "They understand that compromising on the channel is something Cisco doesn't do," he said.To facilitate the strategy, Cisco is sifting through a variety of data sources, including its own regional planning efforts, to identify SMB opportunities and match them with the appropriate partners, Williams said. Early last year, San Jose, Calif.-based Cisco launched marketing partnerships with several service providers, including AT&T and SBC Communications.