Fountain Valley’s D-Link Systems Inc., which is big in home offices, is in the throes of a three-year plan to grab a piece of the back office.
“We are doing well among consumers but we needed to diversify,” said Keith Karlsen, executive vice president.
The company, part of Taiwan’s D-Link Corp., makes switches, routers, modems and network adapter cards. Last year, D-Link’s parent had $1.3 billion in revenue, with North American sales accounting for about $350 million.
Most sales are to consumers who use routers and other devices to share Internet connections or link together computers. Small and midsize businesses also use D-Link devices.
The company’s main rival: Irvine’s Linksys, a unit of Cisco Systems Inc. with yearly sales of about $1 billion selling to consumers and smaller businesses.
Now D-Link wants to sell more to larger businesses, where Cisco dominates.
The company is looking to piggyback on,rather than take on,Cisco, according to Karlsen.
“We do play well with others,” he joked. “This is a strategy of coexistence, or we are going to be banging our heads against the wall because Cisco has about 80% of the entire market. We want to go to places where we feel we can compete.”
Where D-Link thinks it can compete is by pushing sales to businesses that already have Cisco’s products at the heart of their networks but want to build out what Chief Executive Steven Joe calls “the edges.”
When businesses look to expand networks, the hope is they’ll look at D-Link, Joe said.
Business networks “can spread out like a spider web, and the devices that are doing it are D-Link devices,” he said.
D-Link’s big advantage is that its gear sells for less than Cisco’s, Joe said.
On average, computer consultants and other resellers make three times the profits with D-Link gear versus Cisco, Karlsen said.
“We offer a significant cost advantage,” he said. “People are starting to look at tighter budgets, and then ask, ‘How can I get the most for my money?’ That’s where we have a compelling story.”
To get companies on board, Karlsen said he’ll let them try out D-Link switches first.
“We’ve been very good at delivering products,” Karlsen said. “Once they see that it works (with Cisco gear), they almost always buy.”
In April, D-Link signed a deal with a unit of Tarrytown, N.Y.-based distributor Westcon Group Inc.
Westcon’s Comstor unit is set to ship D-Link’s xStack line of switches to North America resellers, who in turn, sell to large businesses.
The deal is a first for Comstor, which had only distributed Cisco devices.
“It’s a new higher-end distributor that has been working in enterprise for a number of years and is doing very well,” Karlsen said. “It provides new avenues for D-Link’s offerings to get to resellers and end users.”
D-Link is looking to add another 1,000 resellers that reach big businesses to its roster this year, he said.
“We have pretty aggressive expectations,” Karlsen said.
The company’s goal is to have sales to businesses surpass those to consumers by the end of this year, Karlsen said.
The company recently got into another market,selling to the federal government.
D-Link’s stackable switches recently got the green light to be sold to the General Services Administration, the government’s buying arm.
Since then, D-Link scored contracts with the Army and NASA, spokesman Les Gold-berg said.
D-Link is looking to win sales beyond cubicle walls.
Last month, the company teamed up with Honeywell International Inc. to install a video surveillance system at the Beau Rivage Resort & Casino in Biloxi, Miss. The casino was destroyed in Hurricane Katrina and is undergoing a $550 million renovation.
In April, D-Link set up a wireless network for the Bonnaroo Music and Arts Festival, an alternative rock concert on 700 acres of farmland in Manchester, Tenn.
In the U.S., D-Link’s specialty still is small to midsize businesses with 10 to 400 workers and consumers who buy gear for their homes, Karlsen said.
Yet parent D-Link has sold to larger companies in markets such as India, China, Brazil and Russia for a decade, Joe said.
Sales to businesses abroad make up more than 50% of D-Link’s total revenue, he said.
