Keeping track of the SMB market

What do you think the networking market will look like in the next few years?

PL: On average we have been growing our SMB business 20-25 per cent year-on-year. It does not matter whether or not the market is growing; we are always introducing new products. For example we introduced smart switches and then we introduced the SSL appliance and wireless WAN control for small businesses.

Networking used to be an accessory to the server, but for the last few years Cisco has been touting that the network is the system and the servers and other pieces are the accessories. That will happen in the SMB space as well. If you look at what Netgear, Cisco and Juniper are offering today around videoconferencing, VoIP and NAS, it's all in the network. PCs and servers are secondary. Traditional resellers just selling servers, PCs or printers have got to move on and start learning that the network is the system. They've got to familiarise themselves with VoIP, videoconferencing systems, network security and wireless network switching controllers.

What are some of the challenges selling into the SMB space?

PL: It's getting VARs to go through that [solutions] transition because as much as it is difficult for VARs, they have to learn to install the whole thing for customers. The second challenge is around convincing SMBs that they need VARs to help them put some infrastructure in place that will help them gradually add these applications without disruption.

What is Netgear's focus this year?

PL: The SMB market is close to 40 per cent of our worldwide revenue. The rest is evenly split between consumer products through the retail and service provider channels. In Australia we have about 3500 VARs selling our products to SMBs. Resellers that sign up with us will always be included in all communications and events, and of course as the commitment of a reseller rises, then our commitment to them also rises. For example, if resellers build up certain continuous revenue on Netgear product, we will be able to support them with discounts, free training, co-op marketing and lead generation. We have a team of sales people servicing the VAR channel and resellers that provide repeat business will have dedicated account managers. That's the area we will continue to focus on and strengthen. We want to continue to enhance our reseller network from 3500 to up to 4000 this year. We will also continue to enhance our partner program.

What does Netgear have on offer for its partners?

PL: Our support to our partners is about training. We divide our solutions into a 5-25 user solution and 50-150 user solution. The most important thing is training partners on these solutions and providing lead generation and support. For example, we have about 300 vertically focused VARs in government, education, manufacturing and hospitality. These types of resellers would participate in on-site training, have a dedicated account sales person and lead generation is more vertically specific. From the co-op marketing perspective, it is based on how much the partner is committed to us. For example a five-man reseller that might only generate about $5000 a quarter for us but that's 50 per cent of their business is more important to us than a reseller that may be generating $500,000 for us which is only 10 per cent of their business. We treat all of our partners equally in terms of the availability of training; we do not like to treat them differently.