In the last 6 months or so Cisco's been on this push to grow the Small/Medium Business space. Seems they've just realized there's a huge market there that they aren't affectively addressing. It would also seem that there may not be a lot of growth space left in what they consider Enterprise (1500+ employees) business. Ok, that's great news.
Cisco likes big companies. They also like big integrators that work with big companies. Big integrators don't really like to waste their time with <$100k jobs. That's a problem when you consider many SMB's get itchy even spending $100k. So, for Cisco to be successful they will have to rely on smaller integrators who have been taking care of SMB's all along.
Cisco's been working on enhancing their SMB product portfolio. They are starting to fill in the line for products that better fit the SMB space. However, they still have no inexpensive switch. No inexpensive router. And CallManager Express gets clobbered on price when you're talking fewer than 50 phones. And I do mean clobbered. A 20 employee SMB really doesn't care about the laundry list of features in CME compared to a key system. They care that the key system is $5k and the CME is $20k. The PIX and now ASA does well in this space though.
Ok, so with all this good news why will they fail? Because they treat their smaller integrators like dog snot. Many smaller integrators have the choice of trying to work with Cisco or becoming a completely non-Cisco shop. It's hard to find a middle ground and walking away from Cisco usually means you are left with products that only apply to the S in SMB. And they usually aren't very good products. Plus, it's difficult to manage many vendor relationships, especially when you're small. Cisco does make good products, even if they can be pricey.
So, for those integrators that decide to try to form a relationship with Cisco it's an uphill battle. There is a culture at Cisco that seems to permeate all levels that goes something like this: "If you're small you're not worth our time. And if we do get involved you'll probably F things up so bad we'll have to bail your ass out". I'm not suggesting that that's true, it's just the way 99% of the people at Cisco treat small integrators. How are small integrators supposed to get excited about selling Cisco when Cisco is always condescending and aloof?
Cisco will fail at growing SMB because they don't grasp this simple fact. They can make all the great products they want but if no one sells them they will sit on a shelf. The way they treat SMB integrators will not help them sell. So, until they start stocking shelves at Compusa (and I'm not talking about Linksys) with Cisco gear they will continue to stagnate in the SMB space.