Nortel bets big profits come in small packages

Nortel Networks is packaging its wares - and its marketing prowess - to sell more telecom equipment to small and mid-sized businesses (SMBs). But it's hardly the only gear maker taking note of the SMB opportunity.Today Nortel is launching its My Business campaign. Aimed at companies with four to 50 network users, the program combines the firm's SMB-focused voice and data equipment with software for resellers to help them bring the goods to the street. A new SMB Coach Tool, for instance, advises channel partners on the kinds of marketing messages to use depending on the type of business the end-user organization is in, and according to the title the person on the phone holds: CXO, IT manager, telecom manager, secretary."We're really starting to deliver on our mantra, ‘business made simple,'" said Net Payne, VP, North American marketing. He pointed out that Nortel has been on the simplicity kick since 2006, when it launched its IPT 1-2-3 campaign to convince companies still using traditional TDM telephone technology to switch to IP. In that case, Nortel packaged its IP voice and data equipment so customers wouldn't get confused by the numerous combinations. My Business is "IPT 1-2-3 for SMBs," Payne said.The campaign's title comes from Nortel's assertion that SMBs shouldn't have to focus on communication technology. IT should be simple. It should support business efforts; it shouldn't require deep thinking and strategic purchase planning.But My Business isn't the sole SMB marketing effort on the block. Cisco Systems Inc. recently unveiled its Smart Business Communications System, which combines an IP phone platform, voice mail, wireless data and power over Ethernet technology for eight to 16 users. Avaya Inc. is touting its P2P one-X Quick Edition equipment as not only a stand-alone SMB phone system, but also a branch-office offering that connects bureaus to an enterprise's Communication Manager platform.It shouldn't come as a surprise that vendors have realized the SMB potential. Some industry observers note that equipment sellers have nowhere to go but down-market. "It's the last frontier," said Kevin Restivo, an analyst at the SeaBoard Group in Toronto, indicating that network sellers have largely tapped-out the large-business sector and SMBs represent a new growth area.But there are challenges. SMBs are notoriously difficult to sell to, Restivo said. Small companies are extremely cost-conscious, and averse to change. Their IT mantra tends to be straightforward: if it ain't broke, don't fix it.Still, change is in the air. Whereas SMBs were once considered slow IT adopters, research indicates that small businesses are no less tech savvy than enterprises. Cisco's survey of SMBs last year showed that these types of companies have just as sophisticated an attitude towards technology as larger firms: both groups view IT as a strategic investment for competitive advantages. Research from Telus Corp. also pointed to a maturing SMB mindset.Nortel's Payne indicated that equipment makers are starting to understand how to best profit from SMB sales. The magic formula is one part packaged equipment, one part targeted messaging, and one part channel-engagement. "It's a level of marketing sophistication" that gear providers struggled to reach in the past, he said.One important kind of channel partner is the telephone service provider. According to Payne, Telus is testing the My Business suite of products as a managed service offering.My Business packages are based on the BCM 50, 200 and 400 IP-PBX systems with voice mail and unified messaging. The packages include routers, switches, wireless access points and VPN support functions for managed service offerings. To learn more, visit www.nortel.com/mybusiness.

Nortel bets big profits come in small packages

News | 04/16/2007 1:42 pm EDT

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