Cisco SMB Segment ‘By Far’ The Biggest Partner Opportunity

‘The SMB market is by far the biggest opportunity to grow or even double its market share … And interestingly enough, [in SMB], this is 100 percent partners,’ Cisco Channel Chief Oliver Tuszik tells CRN.

Cisco’s SMB focus of today isn’t the small business play the company’s touted in the past, partners and executives told CRN at Cisco Partner Summit 2022.

SMB was the fastest-growing segment for Cisco during 2022 with 28.5 percent growth in bookings for the fiscal year that ended in July. It’s proving that Cisco, with its partners, are starting to tap into this blossoming market, but they are just scratching the surface, Cisco Channel Chief Oliver Tuszik told CRN.

“The SMB market is by far the biggest opportunity to grow or even double its market share,” Tuszik said. “We’re very strong, thanks to our partners, in the enterprise space and even in the public sector, but when we go down into the SMB space, this is an area where we only have a small market share.”

But Tuszik said this small but mighty segment is not only growing but outperforming right now. “And interestingly enough, [in SMB], this is 100 percent partners,” he added.

[Related: Cisco Partner Summit 2022: CEO Chuck Robbins’ Top 5 Quotes]

Andrew Sage, Cisco’s vice president of global distribution sales, called Cisco’s SMB segment “hot.”

“These customers are stampeding to the cloud [and] they’re embracing things they couldn’t do before. It’s really driving growth for our partners to support these customers,” Sage said.

Cisco is leading with the Meraki portfolio in the SMB space because of its simplified cloud-based networking experience and now, the Meraki dashboard’s ability to manage more of Cisco’s networking products, like its Catalyst line. It’s also bringing in Cisco Umbrella and Duo on the security side and the robust Webex platform collaboration in to arm SMBs for hybrid work, Sage said.

“From a portfolio focus, we’re in a better spot than we’ve ever been in terms of having the technology these customers need, the price points that they need,” he said.

Cisco’s former “Small Business” segment was off-putting to many medium-sized businesses, but by changing the strategy in favor of SMBs and leading with Meraki, the company’s approach is more inclusive of different kinds of businesses, said CJ Metz, vice president of Modern Infrastructure for Irvine, Calif.-based Cisco Gold Partner Trace3.

“They’re not pushing people away at the outset,” Metz said.

While Trace3 largely focuses on enterprise clients, it has a large division specifically designed for the midmarket. “What we’re seeing is a large shift as SMB companies really catch up to digital transformation. Meraki gives [them] that full stack visibility across wireless, switching, routing and everything in between. It’s just a phenomenal platform,” he said.

Cisco is also supplying partners like Trace3 “warm leads” for midmarket deals, Metz said. “It’s just it’s a volume issue at the end of the day -- there’s so many midmarket customers out there,” he said. “There’s been a much more concerted and focused effort on less of the kind of customized sales tactics that you would do as for an enterprise. It’s more of a repeatable sales motion specific to Meraki, and we do see a lot of value there.”

Cisco knew that it also needed to change up its marketing in a way that better aligned with what SMB customers need to hear from a tech vendor. To that end, Cisco.com/SMB was redesigned and launched in August that focuses more on business outcomes and hybrid work.

Sage said that Cisco has seen a 175 percent increase in the number of customers going to the site and has generated 1,600 leads for partners since Cisco doesn’t do any SMB business directly.

Cisco Perform Plus Activate

Cisco is reaching out to partners just starting down the road with the tech giant with incentives geared toward smaller Cisco partners just starting out.

Perform Plus is an existing global incentive that rewards partners with a cash rebate for achieving overall growth and additional bonuses for cross-selling across architectures and focusing on midsize and small customer segments. The tech giant at Partner Summit unveiled Perform Plus Activate, a profitability program for those smaller partners.

“Those are great relationships for Cisco,” Sage said. “[The Activate partners] can log into our site, see the analytics of your business, and we’re working directly with them on setting quarterly goals and paying out rebates. They’ve [also] got access through our PXP platform to training and enablement.”

To reach these new partners, Cisco is working through its distributors. These players, including CDW, are offering local support to smaller partners, Sage said.

Still, one East coast-based Cisco partner that requested anonymity lamented about working through a distributor rather than Cisco. “That’s still a challenge for us,” the partner executive said.

Sage said that distributors have “far more” staff down in this in this space to support these partners. “It’s a base level of support that a distributor can give a partner that we just couldn’t do. And it’s simple stuff like credit capacity, pre-sales, consulting and engineering, and holding inventory, “ he explained.

The hope is for many of the Perform Plus Activate Partners to “graduate” to Perform Plus, Sage added.

“They’ll hit that accelerating point in terms of their Cisco practice growth. We really want to try to communicate with that reseller, give them the ability to use our branding so that we show our strong relationship with them and we want to use the distributors to be able to scale our support to them.”