Cisco SMB Business Gets Updated Sales Coverage Model, New Investments

The Cisco SMB unit is seeing an increase in hiring and resources as the vendor addresses what it sees as a $30 billion market.

Cisco channel leaders and partners briefed press and analysts this week – before announcing the company’s bombshell acquisition of Splunk – about the trends they see with small and medium-size business customers and the partners who serve them. The online roundtable included a layout of Cisco’s new “Scale” coverage model that it introduced at its August sales kickoff. It also included a discussion of digital marketing resources Cisco has been offering to partners and how those partners are changing the way they market products to small businesses.

Cisco defines SMB customers as companies with a three-year “wallet potential” of $200,000 or less, or $50,000 or less in annual bookings. And Andrew Sage, Cisco vice president of global distribution and SMB sales, said those companies tend to be a bit larger than the one- or two-person shop.

Cisco’s Andrew Sage

“I think that our technology and our partners’ capabilities are much better suited to that slightly larger SMB that has started to move to the cloud and that would react to the value proposition that we bring with Meraki [and] Webex, for example, with cloud security for example, wrapped up in the services that [partners] provide to them,” said Sage.

He pointed to a nearly $30 billion opportunity for Cisco to engage with customers that want to engage in digital transformation efforts to move to the cloud and SaaS. And 20% of those SMB customers are entirely new logos for Cisco, Sage said.

“These customers are stamping to the cloud and stampeding to SaaS to do digital transformation. It isn’t something that we’ve always associated with the SMB customer. We kind of think of them as hanging on as best they can,” Sage said. “And the truth is that SMB customers are doing things they could never do before with technology. Because they used to have to buy servers and they had to buy licenses or they had to do custom programming that was complex and difficult. And now with cloud and SaaS, that’s no longer the case.”

The Cisco SMB business runs entirely through partners, Sage noted.

“There’s no concept of a named account in our SMB business,” he said. “We are really relying on partners to manage those ongoing relationships. We’ve got to make sure that we’ve got the support that these partners need when they need it to bring the solutions to the customers.”

Portland Internetworks’ Doug Westervelt

Doug Westervelt, president and CEO of Oregon-based MSP Portland Internetworks, agreed that SMBs are working with a more sophisticated technology stack than ever. It very much compares to that of a larger customer, Westervelt said. But the biggest difference is in staffing.

Cisco SMB Clients Are Cloud-Bound

“A lot of our SMB clients have the same needs; they’re moving their workloads to the cloud. They’re subject to security threats. But they don’t have the in-house talent to design and manage that,” Westervelt said.

Westervelt joined Spectrum Enterprise vice president of product management Bob Schroeder on the webinar to share how they’ve been working with Cisco and SMBs.

Sage said partners like them have their hands on a $4.5 billion market opportunity within that larger $30 billion total addressable market. That’s for helping existing customers evaluate their technology.

“… that opportunity is for partners like Doug and Bob to go back to their existing customers and ensure that we’re taking care of all of the requirements they have and using technology to enable all of these capabilities by being a little more broad in what we’re bringing to them,” Sage said.

Cisco has noted elsewhere that traditional resellers and integrators drive 60% of SMB revenue. MSPs account for 20% and communications service providers drive 15%. Back in the summer, e-commerce accounted for 5%. However, Sage noted that e-commerce grew 30% in the latest quarter.

Cisco notably announced the acquisition of observability provider Splunk on Thursday.

Investigate the seven images above to read about the latest initiatives and updates in the Cisco SMB channel.