Cisco plans discounts to win back SME users


Cisco plans discounts to win back SME users

Miya Knights

Cisco is planning to offer discounts to combat unofficial used equipment resellers, or "grey market" providers, in an effort to win back sales from small and medium-sized enterprises.

Although grey market products have been on sale for some time, the networking company said their popularity among smaller businesses was starting to affect its revenues.

To appeal to smaller businesses, Cisco plans to launch products targeted at companies with fewer than 100 users, and it said it would be working with its official Select resellers to offer discounts.

The company also plans to push its Cisco Certified Refurbished Equipment mark to help differentiate products.

Cisco addressed the grey market issue at its 2007 Partner Summit this month, where it said that "unauthorised channel competition" was taking up to £200m away from its sales. In particular, one used equipment broker had sales of £70m in 2006.

Cisco told the conference that it did not have an "effective offering in the sub-100 user market", and its competitors (including reseller brokers) were doing well at appealing to smaller businesses.

Martin Reynolds, vice-president at analyst firm Gartner, said the grey market could legitimately trade with official goods that might skip a channel - such as OEM direct to broker, for example - so it was unclear how this would be affected by Cisco's plans.

Cisco website >>

Gartner website >>

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