SME push by Cisco depends on buyouts

Acquisitive networking giant Cisco has admitted it lacks the technology to successfully push into the small and medium-sized enterprise market, but it is in negotiations to buy the necessary companies.

Paul Mountford, Cisco UK MD said that keeping pace with the change in networking technology was a priority, but he was not privy to details of the talks going on in California.

Last month the company bought Granite Technologies for its gigabyte Ethernet switching capabilities - its fourth buyout this year. But it said there were other gaps in its product portfolio that had to be filled.

'As one end of the market becomes commoditised, the other becomes more specialist. We aim to continue to be at the leading edge of technologies where there are low volumes but very high margins,' said Mountford.

He said Cisco's strategy was to follow the cycles through until products became commodities - the point where they offer about 15 per cent margin.

Although the pace of change was forcing networking vendors to search for new markets, he said the company's existing distribution model could handle the strategy.

The firm is opening a European centre of operations in Amsterdam after receiving backing from the Dutch Foreign Investment Agency. Eighty staff will control administration, fulfilment, transaction processing and treasury functions for the whole of western Europe.

Persona MD Roger Paul welcomed the opening of the Dutch centre. He said nothing would change in terms of stocking, but he expected it to result in efficient servicing for distributors.