Feature Story

November 14, 2005

Small business is in for some big advances in office communications - as Cisco names Linksys One as its seventh advanced technology.

Cisco Systems recently entered the Hosted Small Business market with its announcement of a new brand, Linksys One - a purpose-built line of products and services for small businesses. Linksys One is a complete, affordable, easy-to-install communications offering that delivers hosted business telephone service, data networking, applications, video and the Internet through one high-speed connection from a service provider. The Linksys One brand also represents a new go-to-market approach, in which both value-added resellers (VARs) and service providers can take part in addressing the needs of businesses with five to 50 employees - with room to grow to 100.

News@Cisco asked Charles Giancarlo, senior vice president and chief development officer, Cisco and president, Cisco-Linksys; and Marthin De Beer, vice president and general manager of the Small Business Systems Business Unit, Linksys; to discuss the anticipated impact of Linksys One on the small business marketplace and the announcement that Cisco has named Linksys One the seventh of its advanced technologies.

Linksys One, or Hosted Small Business Systems, has been named as the next advanced technology at Cisco. Can you explain why?

Charles Giancarlo: Our strategy for identifying new technologies is to categorize opportunities as either an advanced technology or an emerging technology. An advanced technology is defined as an opportunity that is adjacent to our other businesses, can generate Cisco revenue of US$1 billion or more over the next five to seven years and in which Cisco can secure #1 or #2 market share position, has clear and sustainable differentiation over time and fits into our long-term architectural technology vision.

Cisco has identified six advanced technologies with which we believe we can take advantage of market transitions ahead of competitors and execute against the opportunity to drive growth. These include security, wireless, enterprise IP communications, storage, optical and home networking. Our seventh advanced technology, hosted small business systems, will incorporate Linksys One.

We've been driving innovation to the small business market for years; it's an area that we believe is a rapidly evolving opportunity and that offers high prospects for growth. Linksys One is part of our ongoing efforts in this regard.

Why is the announcement of Linksys One important for small businesses?

Charles Giancarlo: Our goal and vision as a global leader in communications equipment is to make technology available to customers of all sizes, and Linksys One does that for small business. It delivers the most cutting-edge technologies and simplifies how small businesses buy - as well as how they deploy and acquire - communication products and services.

Small businesses have had a number of challenges in this area in the past. For example, they typically don't have a dedicated IT person - often not even a technical person - on staff. Yet they've had to source their technology from many different suppliers and then try to pull it all together.

They've also typically acquired their services from multiple suppliers. So, instead of focusing on their core business, these small companies have been forced to focus on technology and supplier management.

Linksys One solves many of these issues. Small businesses can now buy one complete communications system from their trusted advisor, the local VAR. Likewise, they can acquire all services - such as Internet access, voice, etc. - for that system from one service provider. So Linksys One is providing one complete, affordable communications solution; one easy plug-and-play installation; one trusted source; one network to count on; and one solution that grows with a small business.

How does it work?

Marthin De Beer: The key to Linksys One is that it's the first completely plug-and-play system for small businesses.

Instead of paying for and maintaining separate phone and computer networks, businesses have just one converged services infrastructure for everything: phones, data networking, Internet and business applications. All they have to do is contact a service provider who offers Linksys One products and services, select the number of Linksys One devices and services they'll need and their entire office can be set up in less than an hour.

Service providers become the single point of contact for all data and voice communication needs, including local and long-distance calling, broadband Internet access and system monitoring - which helps eliminate frustrating delays for the small business. By combining these offerings and taking advantage of smart Internet provisioning and management technologies, the service providers can reduce costs while offering value-added new services that build customer loyalty and generate new revenue streams.

Why create an entirely new brand called Linksys One?

Charles Giancarlo: We are launching a completely new line of products that include more intelligence and features than previously found in traditional consumer grade products. We feel a new brand is necessary to differentiate between the Linksys retail products and the intelligent small business products. The new brand and class of products also allows us to market uniquely and specifically to small business customers.

Linksys One will stand for the same attributes that the Linksys name stands for such as affordability, ease of use and reliability. Small businesses now have a unique product line that meets their communication needs.

Linksys One is a joint effort between Linksys and Cisco to create products and services that address the small business communications market. The products and the solution are created within the new Linksys Small Business Systems Business Unit, overseen by Marthin De Beer, Linksys vice president. In developing the Linksys One offering, the business unit took a systems approach and built a true solution for small businesses that makes them more competitive - not a bundled offering pieced together with a variety of similar products.

So the Linksys One brand lets us bring together the strengths of both Cisco and Linksys to deliver a complete system that fits the needs of this very important market.

What differentiates Linksys One from other systems small businesses might consider?

Marthin De Beer: It's one of the few purpose-built, complete hosted systems for small business. They often have to choose between an enterprise solution being sold in the small business space or a consumer product - neither of which is well suited for their needs.

Linksys One specifically meets the needs of small business, including simplicity, affordability and a complete set of communications tools - including low-cost phones, highly secure data networking, high-speed Internet and business applications like Voice over IP. Further, it provides an end-to-end approach, with tight integration between the customer premises equipment and the Cisco equipment in the service provider network - for more reliability and ease of management.

How does Linksys One benefit service providers and value-added resellers?

Marthin De Beer: Linksys One offers a new opportunity for them to work together. Because it has both customer premise and service elements, it helps enable a new go-to-market model in which service providers won't compete directly with VARs but will actually recruit them to resell Linksys One as well as their services to the small business.

Further, Linksys One helps service providers achieve greater profitability, from an operational point of view, than they've had before with their hosted services. And VARs can improve their top and bottom line from selling Linksys One bundled with services.

How does Linksys One fit in with the overall small business strategy at Cisco?

Charles Giancarlo: The small business market, which happens to be one of the fastest growing, is very important for Cisco. Linksys One creates new opportunities for small businesses to take advantage of advanced IP communications and applications to improve customer service, staff productivity and their bottom line. That's right in line with our philosophy of serving the small business at Cisco.

We've listened to what small businesses say they want: affordable, complete business communications with easy management and plug-and-play configuration.

With Linksys One as well as with our other small business offerings, businesses with as few as five employees can enjoy the full breadth of products required to build a powerful, highly reliable network from a single vendor, so all the components work seamlessly together and they have only one company to call for support. We've got security, IP communications, mobility and wireless, and network foundation tools that meet small business budgets and capacity requirements while providing reliable investment protection.

For small businesses that adopt Linksys One, what kinds of future products and applications will they be able to integrate into their network?

Marthin De Beer: This is where it gets really exciting. You should think of Linksys One as a platform for a whole range of communication capabilities and services.

For example, when Linksys One ships in December, it will support routing, switching, firewall and key system features. It will provide data, security, manageability as well as a voice over IP (VoIP) all as a single integrated system.

But that's just the beginning. Over time, we'll add products and services - like wireless telephones, wireless access points, IP videoconferencing and IP surveillance gear, and simple storage components - all of which can be instantly integrated into Linksys One networks. So service providers and VARs will be able to go back to these small businesses, once the initial Linksys One system is in place, and offer them more devices, capabilities and services. This really is big news for small businesses and the companies that serve them.