Cisco Abandons SMB VoIP Market

Cisco has a history of rather schizophrenic behavior toward the SMB market. In 2003, Cisco acquired Linksys, which manufactured network gear for SMBs. In January of this
year, they sold the unit off to Belkin.

Cisco’s on-again-off-again relationship with SMBs continues this month as they have declared End-of-Sale, End-of-Life and End-of-Support for their UC540UC560 and BE3000 voice platforms. The UC540 supported up to 32 phones, the UC560 up to 138 phones while the Business Edition 3000 supported up to 300 users and 10 sites.

Cisco is dropping these products like a hot potato, with phone support for the UC540 and UC560 ending in January 2015! Wow! The EOL announcements appear to cover all products in each product line. According to the Cisco EOL release, the recommended migration path from all three platforms is the BE6000, their “entry-level” 1000-line system. Clearly, this is not an affordable option for many current SMB customers. And how long will it be before the BE6000 product line is EOL’d?

So, once again, what many believe to be the “safe choice” turns out to be anything but. If you are a telephone system buyer for a small to medium-sized business, beware of companies that seem to be unable to commit to the SMB market. They can discontinue your product line at any time. The result for your business could be disastrous.

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About IDeACOM

John Dolan is the co-founder and Vice President of IDeACOM Communications Group in Verona, NJ. We are the Voice Over IP telecommunication specialists you can depend on with confidence in central and northern New Jersey, or abroad with our vast nationwide network. You can contact me directly at (973) 559-8477, or jdolan@ideacom-NJ.com.
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3 Responses to Cisco Abandons SMB VoIP Market

  1. Mr. IP Voice says:

    I’m glad to see the UC5xx and BE3000 go away. They were aimed a market that wasn’t a fit for Cisco to begin with.

    Speaking as a Cisco reseller familiar with these products I can tell you that I always thought Cisco’s acquisition of Linksys was a reach, and when they dumped it there was no surprise here. The UC540/UC560 and BE3000 were also rather odd products for Cisco. They were built on purpose-specific hardware and had scalability limitations. Very un-Cisco The BE3000 was probably the strangest of them all, being an “almost Call Manager” with severe endpoint and functionality limitations. I never saw a place for that product and never recommended one to a single customer.

    I do disagree with the notion that Cisco is abandoning the SMB space. The CME product continues to exist, and as the router platform is multi-purpose and can be migrated into Cisco’s other offerings it fits Cisco’s strategy where the UC5xx and BE3000 did not. As to the BE-6000, this does not fall into the same category as the other products at all. It is really a bundled package of Cisco’s full Unified Communications Manager (Call Manager) product including the virtualized server and software. Saying that it is a 1000 user product is untrue. 1000 endpoints and 50 survivable remote sites is its maximum supported configuration (after which you simply migrate the licensing to a full Call Manager). The BE6000 starts as a 25 user package at around $500 a seat (depending on the phone models you chose) and that includes full unified messaging, Jabber, mobility, and the rest of the feature package — and this is based on list price – street prices are considerably lower. Unlike the recently discontinued products the BE-6000 fits Cisco’s go to market model perfectly and is one of the best selling products in Cisco’s collaboration portfolio – so what you are likely to see is an expansion of this product to fit a wider segment of the market. The BE6000 isn’t going anywhere.

    Which leads me to my final point: Cisco isn’t going anywhere. I don’t know what is going to happen to the likes of ShoreTel – just read over the last several years of 10K reports to get very scared. Avaya is hemorrhaging cash faster than the Fed can print it. At the next tier down you have Mitel – at least they are making money and seem to have a product and business strategy that make sense, but they are a small player by comparison. At the end of the day any product by any manufacturer can be discontinued tomorrow. Is NEC making enough money to stay in the US market? Will Siemens abandon whatever they have left? How will any of the other players survive the move to the cloud in the SMB market?

    That’s my two cents.

  2. Mr. IP Voice says:

    Speaking as a senior S/E for a Cisco partner (Master UC Specialized) I’m going to step (not too far) out on a limb and say that the chances of Cisco spinning off the BE3000 / UC5xx series products to someone else are somewhere between slim and none – and I don’t expect Slim is likely to show up for this.

    The spin-off of the Linksys consumer product made sense. Cisco decided that their foray into the consumer market wasn’t a good fit for them, the Linksys product had a great market value (Belkin paid them a half-billion dollars for it), and none of Cisco’s intellectual property was tied up in the Linksys consumer networking line.

    If Cisco were to spin off the BE3K/UC500 series they would create competition for themselves at the low end of the BE6000 offering. As the software in the BE3K is based on Unified Communications Manager, and the software in the UC500 is based on Call Manager Express there would be intellectual property issues involved as well and exposure of their proprietary technology to a third party.

    Methinks this is not going to happen.

    My read is this: Cisco knows that much of the sub 100 user market is going to cloud based solutions. The percentage of the remaining premise based market in this segment is not big enough for them to devote the resources to these SMB specific products necessary to keep them competitive. The BE6000 starts making sense in the 25 user and up market. Having a single solution for SMB on up to Enterprise with a common feature set and footprint makes all the sense in the world for Cisco.

    IPV

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