Cisco Goes For The Small-Business Market - InformationWeek

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9/27/2004
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Cisco Goes For The Small-Business Market

New IP switches and routers that can be used to build converged voice, video, and data networks are aimed at businesses with limited IT resources.

Managing technology in small and midsize businesses, and at the branch offices of larger companies, can be a difficult and costly undertaking as communications and security devices proliferate. Many of these locations don't have full-time IT personnel to manage the voice communications system, data routers and switches, wireless systems, firewalls, and other devices essential to a modern business. Yet, those businesses want to modernize their networking infrastructure.

To simplify that challenge, Cisco Systems on Monday introduced entry-level switches, line cards, and a network-management application optimized for small and midsize businesses to make it easier to manage switches, routers, and network-access points. They follow the introduction earlier this month of routers with voice, wireless, video, and security capabilities built in--essentially, a "network in a box." Businesses often use switches to route traffic over LANs and use routers to connect to WANs and the Internet.

"Small businesses want the same kind of advanced technology that larger businesses want," says John McCool, VP and general manager of Cisco's gigabit systems business unit. "They want to be able to use voice over IP, add wireless, improve security, and better authenticate users. Modular switches are a way to bring those capabilities to small and midsize businesses."

The Catalyst switches feature voice-over-IP capabilities, improved security to ward off a variety of attacks, a nonblocking architecture, and power over Ethernet. Prices range from $2,495 for the 24-port Catalyst 4500 to $13,495 for the Catalyst 4948, a rack-mounted switch for server applications. The Cisco Network Assistant management application is included at no additional charge and provides wizards and templates to let the customer configure ports for use by phones and PCs.

The Integrated Services Routers were specifically designed for small and midsize businesses and branch offices of larger companies, and range in price from $1,400 to around $13,500. For some businesses, these routers can eliminate the need for separate voice and security systems.

For small businesses, the two key criteria when buying networking equipment are price and ease of integration and manageability, says Chris Liebert, a senior analyst for small- and medium-business strategies at the Yankee Group research firm. "When they buy something, they want it to play nicely in the sandlot with the other products they already have," she says. "They want to purchase a good product at a good price point that also will satisfy other needs like security."

Yankee Group research shows that the small- and medium-business market has increased its purchases of switches, routers, and hubs in the past couple of years, and Liebert expects that trend to continue.

However, they lag when it comes to deploying VoIP. "SMBs aren't cutting edge when it comes to deploying technology. They like to watch and see how the technology develops and for the price to come down," Liebert says. "VoIP technology is available and solid. In the next year or two, I expect the adoption rate of voice over IP by SMBs will increase."

RBC Dain Rauscher Inc., the retail brokerage arm of the Royal Bank of Canada, has more than 5,000 employees working in 180 locations across the United States. It's deploying Cisco's Integrated Services Routers to replace existing Cisco equipment. "We're putting this in as a baseline infrastructure in all of our branch-office locations," says Rich Blasing, managing director for infrastructure services for RBC Dain Rauscher. "It fits our needs in terms of IP telephony and built-in services."

The integrated voice services hold the greatest appeal and, based on his testing of the gear, should cut voice telephony expenses by 20%, Blasing says. "Our goal is to replace all of our PBXs with IP telephony," he says. "It's like an appliance approach. If you do proper capacity planning, it can be a really solid platform. We're going to see real benefits."

The high end of the new line, the 3800 series of routers, can deliver a variety of services at speeds of up to 45 Mbps and includes on-board encryption, a full-featured firewall, and other security applications. They also can support up to 720 regular phones, 240 IP phones, voice mail, voice- and videoconferencing, and other features.

Building security into a branch-office router should appeal to companies worried that viruses and worms can sneak onto a corporate intranet via that avenue, says John Pescatore, a VP at research firm Gartner. Combining security and other capabilities into a router "is a pretty attractive deal for small businesses also," he says.

The move by Cisco and networking competitors like Juniper Networks Inc. to build security into network end points shows that business-technology managers are looking for new approaches to prevent worms like Blaster from crashing networks. "There's been a real change in large-enterprise thinking about security," Pescatore says. "By building security into the network, the devices can scan and block anything that looks dangerous."

The Gartner analyst says businesses like the idea of a multifunction networking device, but he cautions them against becoming dependant on a single vendor's proprietary technology. "A more open approach is what you want," he says, "so you can swap out things and replace them with technology from another vendor."

RBC's Blasing understands that concern, but says the advantages of working with a single reliable vendor outweigh the benefits of a more open approach. "How many vendors do you want to play with?" he asks. "At the end of the day, a solid, one-stop solution provides a higher level of services."

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