In an effort to target businesses with 100 to 500 employees, Cisco has enlisted a set of partners to create and sell tailored combinations of technology for particular business needs. The company will essentially act as a broker for customers, according to Cisco executives.
Included in the network of systems companies and integrators are the likes of IBM, Hewlett-Packard, J.D. Edwards, Oracle, and PeopleSoft, as well as EDS, Ernst & Young, KPMG, and a variety of computer equipment resellers. The use of a so-called two-tier sales approach is a recent development at Cisco, which had previously focused on direct sales.
Known for its high-end equipment for corporations and the Internet, the network device maker has moved down market in recent years to tackle the needs of smaller businesses, probing new opportunities to keep its high-growth rate intact. Cisco has had such success that it plans to announce projected annual revenue of nearly $2.2 billion next week (based on revenue from the company's third quarter) when it discloses financial results for its fiscal fourth quarter and the most recent year--up from less than $200 million for its 1996 fiscal year.
"The growth in this 'channel' has been absolutely astronomical," said Joe Diodati, director of medium markets at Cisco.
The company competes with the likes of 3Com, the leader in many small business market segments, Nortel Networks, and chip giant Intel, among others.
Separately, Cisco announced enhancements to its line of Catalyst 5000 switching devices, allowing network managers to prioritize traffic through the use of new modules and associated software. The new quality of service, or QoS, technology lets a manager classify traffic based on the type of application, for example.