Small Business a Cisco Target

Cisco’s Linksys division has announced plans for a
hosted service platform aimed at expanding its small-business customer base.

Linksys One will use new routers, Internet Protocol phones and
gateways to power broadband access, data networking, business and security
applications, and Voice over IP service.

It will be hosted by service providers MCI ,
airBand, NeoNova and IP Systems. A network of value-added resellers (VARs)
will handle selling, installation and service. Cisco is currently recruiting
carriers and VARs for the program.

If purchased through a VAR, the service will cost around $60 to $70 per
month, per employee, Cisco said. In addition, there is no capital
investment, which should be attractive to small businesses.

The first Linksys One equipment will be produced next month. MCI will begin
its trials early next year and launch services in mid-2006.

“We’re selling into a very big total available market,” Charlie Giancarlo,
Cisco’s chief development officer, said during a conference call.

He estimated that the market for small-business-converged services is $10
billion a year, of which Cisco and Linksys own less than a 10 percent share

Key attributes of the service are affordability and simplicity. A
16-employee system with VoIP can be installed in less than an hour, and
costs less than comparable key systems or PBX systems available
today, Cisco said.

The offering could threaten a number of telecom hardware and software
makers, including Nortel , NetGear and
Avaya .

Giancarlo said he doesn’t expect much overlap between existing Linksys and
Cisco product lines, although there may be some grey areas at the top and
bottom of the SMB range.

“If you don’t have grey areas you have gaps,” Giancarlo said. “And gaps are
where competitors lie.”

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