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May 10, 2010
D-Link, Much More Than the $99 Router Guys

Let's face it, it's an exciting time to be in the consumer electronics and technology business as consumers and businesses are buying better and faster devices while simultaneously upgrading their bandwidth connections including routing and switching technology. One of the major vendors in these spaces is D-Link (News - Alert) and recently I sat down with the company's U.S. management team to hear how they plan to grow and evolve into the future.

In a discussion with Nick Tidd, president, Dan Kelley, senior director of Marketing and Les Goldberg, Media Relations manager, I got to learn a tremendous amount about how the company is looking to move upmarket without losing its core heritage as a provider of SMB and consumer technology solutions.

Tidd explained, 'We are more than your $99 router guys and we have been working to build-out our product portfolio and partner program over last few months.' Perhaps the most important part of a strategy of moving upmarket is a chassis-based product and not surprisingly, the company recently announcedt he xStack Chassis Series DGS-7200E. This product is not necessarily new as it has been shipping and tested in other markets outside the U.S. Tidd explained that he felt the company needed to provide additional services before bringing this solution to the US.

This explains why the company is simultaneously rolling out new storage solutions, the DSN 5000 Series xStack SAN Arrays which come in three models which vary in Ethernet port density and speed. In addition there is the new L2+ Unified Wired/Wireless Gigabit Switch the DWS-4026 which can manage between 64 and 256 DWL-8600APs in a switch cluster. Moreover, the company has been very vocal about its lifetime warranty which applies to its enterprise-class solutions.

The D-Link x-Stack Chassis Series DGS-8000

 d-link chasis

With these new announcements, the company is now competing from the edge to the core with a suite of products that span from IP surveillance to core routers.

I asked Nick what the enterprise should know about D-Link before purchasing and he told me that the economy is recovering but value is still important. He mentioned his core customers are value conscious and brand agnostic.

I also asked about the company's thoughts on how Cisco (News - Alert) is handling the branding of Linksys as well as the recent HP/3COM acquisition. Tidd believes Cisco has a great deal of arrogance to think they can come into the SMB space and demand greater value. Although he says he respects them as a competitor he also says they have gone through many people (referring to turnover) and have an ever-shifting [SMB] strategy. One last point is he says they don't understand the cost of acquisition and how to keep SMB customers. He added that D-Link's strategy is to be open as opposed to Cisco who Tidd says tries to lock customers in with proprietary solutions.

D-Link's Dan Kelley, senior director of Marketing interviewed by TMCnet's Erik Linask at Interop 2010 Las Vegas (Apple (News - Alert) users use this link)

Regarding 3COM, Tidd believes the overlapping product line and channels mean it is a great opportunity for D-Link. Tidd used to work for 3COM so he some firsthand experience on the matter.

In order to take advantage of the opportunity in the small to medium enterprise market and the perceived stumbling by the competition, expect D-Link to continue with greater branding via live events as well as an increased focus on ensuring the channel will be successful. This emphasis on partners is especially important as the company says 60 percent of them do not have the capital to grow their business. As a result the company allows the channel to register opportunities, qualify them and subsequently get paid on the sale, even if they didn't make it directly.

D-Link is also focusing on demand generation for channel partners which includes grant writing - they also have playbooks on how to win business in various vertical segments of the market such as healthcare, education, etc.

D-Link sees the IT space as evolving and moving to the cloud. As this shift continues they believe the way people purchase and provision is evolving as the trend becomes blending of the cloud and CPE.

There are a few other reasons the company remains confident. They see HP focusing more on Chinese manufacturing and certainly the 3COM acquisition solidifies this trend. D-Link was founded in Taiwan and Tidd explains they have state of the art Chinese manufacturing. So they feel HP is coming to them and competing more on their turf.

In addition, the company compares its strategy to the one Dell employed some years back where it used the consumer brand to penetrate the business market. Tidd said that at first, companies would not admit they were using Dell servers and laptops - but over time Dell began to gain a serious foothold in the business market.

Cisco is among the best acquirers of companies that I have ever seen and a few years back I asked the company's CEO John Chambers (News - Alert) if he will teach other companies how to acquire. He responded as you would expect one of the most successful executives around to answer by saying he would certainly help his customers if they are looking to make acquisitions. In other words Cisco not only leverages its amazing ability to successfully acquire for its own M&A purposes, it wields its successful methodology as a weapon when selling against the competition.

Still, as Om Malik has pointed out in the past, it is much easier to go upmarket where margins are richer than to go downward where margins can be measured in nanometers.

HP is another well-run organization and it is unclear what will happen to the 3COM brand and reputation going forward. Moreover, what is the value of 3COM these days? It is certainly a fraction of the well-known and revered SMB brand it once was. Then there is the digestion of Palm HP has to contend with and the competition from Apple. HP certainly has a bunch of distractions on its hands.

As the consumer electronics space is worth many tens of billions of dollars it is likely that there is enough room for many players to grow and prosper. Moreover, for the enterprise, SANs and wireless networks are areas of continued investment - in fact data centers are an engine of growth as Kevin Wade from Force10 recently told TMCnet. The channel needs love and D-Link recognizes this fact and is trying to help resellers sell more products. The company is saying all the right things to me and if it can execute on branding, I see no reason why it can't make progress in new markets and find itself happily being added to more large corporate purchase orders.

Rich Tehrani is CEO of TMC. In addition, he is the Chairman of the world's best-attended communications conference, INTERNET TELEPHONY Conference & EXPO (ITEXPO (News - Alert)). He is also the author of his own communications and technology blog.

Edited by Stefania Viscusi

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