CHICAGO: Cisco Systems Inc., the top supplier of gear that directs Internet traffic, said it expects the strongest growth in demand for networking equipment to come from small and medium businesses, rather than the enterprise sector it now dominates.

"Small business will be the primary job growth in this next decade for this country and also will consume technology at a faster pace than the enterprise customers have traditionally done," Chief Executive John Chambers said at a briefing for analysts and reporters at its San Jose, California headquarters.

Cisco said the market for networking gear for small and medium businesses, also called the SMB segment, is about $6.6 billion, of which it holds a market-leading share of about 42 percent. The SMB segment, which Chambers said accounts for 20 to 30 percent of Cisco's total sales, is a key indicator for turnarounds in the U.S. and other economies. He said that is especially true in the next two years.

"We would never do a $150 million marketing campaign if we weren't putting huge emphasis on small- to medium business and about to expand out presence in the market," Chambers said. Chambers announced the global advertising campaign in January to raise the company's brand awareness. He said the small and medium businesses are similar to large corporate customers, also known as the enterprise sector, in that many companies in both segments do not see price as the key factor in a sale.

John Edwardson, CEO of Vernon Hills, Illinois-based CDW Computer Centers Inc., a large reseller of Cisco gear for SMB customers, said customers look more at what a particular device will cost over three to five years rather than initially.

"Productivity clearly is just as important to an SMB as it is to a much bigger company," he said. CDW's sales of Cisco products have quintupled over the last four years, he said.
© Reuters