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Cisco Systems Small Business Strategy Tech Talk - Final.

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CAROL VILLAZON, IR, CISCO SYSTEMS: Hello, everyone, and welcome to Cisco's small business tech talk. This is Carol Villazon of Cisco Investor Relations. We appreciate your continued interest in our ongoing series of educational Webcasts hosted by Cisco. Because of recent announcements, the topic of small business is at the forefront of everyone's mind. It's a very exciting subject for us here at Cisco and we hope you'll agree that it offers promising opportunities. Our format today will be a 20 minute presentation followed by Q&A session.

Now, let me introduce our speaker for this session. Ian Pennell is Senior Vice President of the small business technology group and co-chair of the small business council. Ian is responsible for building an organization that will achieve profitable growth in a small business segment by coordinating a multi-tiered product road map and unique go to market strategy across Cisco. Ian also serves as a co-chair of the small business council whose charter is to develop and lead Cisco Strategy to capture profitable growth opportunities within the small business market place. Thanks for your time, Ian.

IAN PENNELL, SVP, SMALL BUSINESS TECHNOLOGY GROUP, CISCO SYSTEMS: Thank you.

CAROL VILLAZON: I'd like to remind the audience that today's Webcast will pertain strictly to Cisco's strategy in small business. No new financial information regarding Cisco's overall performance is intended or implied and this Webcast should not be viewed as an update to the quarter. We may make forward-looking statements which are subject to risks and uncertainties, outlined in detail in our documents filed with the SEC. Specifically the most recent report on forms 10-Q. Actual results may differ from statements made today.

Now Ian, I'll turn it over to you so we can get started.

IAN PENNELL: Thanks very much, Carol.

CAROL VILLAZON: You're welcome.

IAN PENNELL: So, what I want to cover this morning is our small business strategy and how we've aligned for a completely new level of committment at Cisco to address the small business space. In fact we have been investing here for a number of years between our acquisition with Linksys and lower end products that we were making in all of our respective technology areas between security, wireless, switching, etc. What we really decided to do roughly a year ago was bring all of those capabilities together into one group and form the small business technology group. But along with that a committment across Cisco, across all of the functional organizations to really put dedicated teams in place, to allow us to build a complete spectrum or a 360-degree approach if you like, that's very specifically targeted for small businesses.

Now when we're speaking about small businesses here we're specifically speaking to businesses that have seat count of 100 users and down. And the reason why we're focusing there is that we really view the requirements there are quite a bit different and really need to be fine tuned. So by focusing our efforts there in all of our functional areas it allows us to properly address that. So a few months back we kicked off $100 million investment in this area and we've been making great progress against that and I'd like to take you through that.

So first of all, why small business and that 100 seat and down. And we recognize that there's a real opportunity here of roughly $10 billion in the hundred and down and in the SMB area up to 250 seats we see that as the $16 billion opportunity. So well worth our focus and well worth trying to address this market which up until this point has been relatively underserved.

The importance of small business whether you look across the global workforce, the GDP, the new jobs created on a global basis or the total amount of small businesses, you see that in each one of these areas there's very significant portion of the world economy is made up of small businesses. And again on a -- these numbers are really on a North American basis, but we've seen and had confirmation globally on a very similar thing which is that going into an economic downturn the small businesses are really the first ones to feel it. And they are the first ones to show up in raising their hand and saying, there's trouble here.

But they are also the first to come out at the other end. And the reasons for that are because there's a great deal of innovation within small businesses. And also small businesses don't have to go through all of the types of approval cycles and everything else that large businesses do to get themselves going again. So they are very much sort of on the gears if you will. They are very connected to their customer base and the ebbs and flows that they see with that.

So again just another reason why we want to stay focused. And governments on a global basis are seeing this as well. We've had confirmation in the United States, but also in Europe and Japan and in Asia that economic...

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