D-Link, Netgear Sing SMB Tune

Top executives from networking vendors D-Link Systems and Netgear are reinvigorating their channel efforts to chase SMB market share.

In recent interviews with CRN, D-Link Systems President and CEO Steven Joe and Netgear Chairman and CEO Patrick Lo said their companies aim to bolster their standing with SMBs with the help of solution providers.

Both executives said their companies are waging a battle of perception—fighting to convince solution providers and customers they have more to offer than the consumer/SOHO products on which they made their names, namely a broad lineup of full-featured SMB gear that is both economically priced for end users and profitable for partners.

These vendors' ties to the consumer world are exactly what keeps some customers from seeing them as serious contenders in the business market, solution providers said.

"As you move higher up the product line in sales to larger corporations, the association D-Link has with consumer products tends to work against them from a marketing standpoint," said Jeffrey Goldberg, president of Washington Computer Services, a solution provider in Brooklyn, N.Y., that works with D-Link Systems and, to a lesser extent, Netgear.Some solution providers said they share the same bias. "We use D-Link for extremely small businesses—five users—but if it gets to 10 users, 20 users, 30 users, we start to standardize on Cisco," said Tracy Butler, president of Acropolis Technology Group, Wood River, Ill. "We know it works, and there's very little risk in doing that."

Executives from D-Link Systems, Fountain Valley, Calif., and Netgear, Santa Clara, Calif., said channel partners will be key to changing perceptions and winning mind share, especially in a market that entices competition from both ends of the spectrum. Even as consumer/SOHO vendors such as D-Link Systems, Netgear and Cisco's Linksys division seek to establish themselves upstream, enterprise vendor veterans including Cisco and Nortel Networks continue to push downward.

In the process, they are all bumping up against perennial SMB players such as 3Com, Hewlett-Packard's ProCurve division and SMC Networks.

To counter, D-Link Systems, the North American arm of Taiwan-based D-Link, is launching a massive recruitment effort to add 500 to 750 "highly qualified" SMB VARs to its channel program, which currently includes about 2,500 partners, Joe said. An additional 7,500 partners actively sell D-Link Systems products, he said.

"Even though we're known in the consumer realm, we think the business category is something we have a lot of strength in," Joe said.About 40 percent of D-Link Systems' sales come from business products, with the remaining 60 percent coming from the consumer side. Joe said he sees a shift in the near future that could result in a 50/50 ratio. (For an interview with Joe, see page 39.)

D-Link Systems' partner recruitment is being led by the vendor's recently revamped channel team including Van Andrews, vice president of channel sales, and Paul McCauley, associate vice president of distribution sales. Both executives report to Executive Vice President Keith Karlsen.

In the past, D-Link Systems hasn't pushed hard enough in the SMB market, which it identifies as businesses with 10 to 400 employees, Karlsen said. But with new product launches and increased channel efforts, sales of the vendor's business products are up 70 percent year over year, he said.

Building on its momentum, the vendor now seeks partners with high-end integration skills. "We want somebody that can service the product and take care of the end user," Andrews said. "We don't go direct. Everything goes through the channel, but we have to make sure the end user is happy."

To help partners provide top-quality customer service, D-Link Systems has put six sales engineers in the field in the United States, up from two a year ago, Karlsen said. A new aggressive storage program is on tap to debut in about a month, and the vendor continues to grandfather solution providers into the top level of its program, recruited from the ranks of rivals such as 3Com, he said.For its part, Netgear also seeks to challenge higher-end competitors in accounts with 100 to 250 nodes, compared with the 25- to 100-user customers its solution providers focus on now, Lo said.

"Looking at the next 10 years, our goal is to really expand our partner base, both in terms of the type of partners and the number of partners, so that we can sell into bigger businesses and compete more directly with 3Com and Hewlett-Packard," Lo said.

Over the past year, since bringing on new channel director Mike Stetter, Netgear has bulked up its communications with channel partners by putting on more Webinars, increasing phone contact and offering more training, Lo said.

"The biggest difference partners will see this year is that support is going to be No. 1, both from the sales and technical sides," Stetter said. "I think we have decent support today, but we're not going to rest on our laurels."