Linksys announced significant changes to its channel program June 6 and it expects to drive closer ties between its channel and that of parent company Cisco, which now wants the small and midsize business market it once relegated to the Linksys line.

Linksys added new tiers and discounts that reward partners for increasing product specialization and providing a road map for VARs making the transition.

The network vendor also announced programs to market the channel's ability to move Linksys customers up to Cisco products and services that support the vendor's vision of the connected office.

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"My goal is to establish Linksys as the value brand in the partner community," says Nigel Williams, vice president of WorldWide Channel Organization at Linksys.

Changes take effect August 1 for North American VARs and later next year for those in the rest of the world.

Cisco Plans to Leverage Linksys VARs, Product Overlap. Click here to read more.

Partners that join the new program can receive up to 37 percent off the distributor's list price.

The announcements came at a press and analyst briefing in San Francisco that also highlighted a new emphasis for Linksys in the SMB marketplace with examples of products, services and programs geared towards small business solutions.

Currently, Linksys has 13,000 channel partners, compared to 34,000 that are part of Cisco's channel program. While there is some overlap, the goal is to make it easier for Cisco partners to start selling Linksys products and vice-versa.

"We want to reward our partners and help improve their profitability with every sale," says Rod Keller, vice president of WorldWide Sales for Linksys. "We made the decision that we are going to take market share away from our competitors by complementing what Linksys and Cisco have to offer, not by having them compete with each other."

The changes could be favorable, even for VARs that have invested a significant effort in becoming Cisco premier partners. "We look at this as more of a horizontal move, rather than a move down into selling Linksys products," says Dave Nguyen, a partner in San Francisco-based NetBrain Consulting. "In the time it takes us to do a Cisco enterprise deal we could do three or four Linksys jobs and continue to grow our own business."

Linksys will also offer marketing programs that will show how to trade up to Cisco products and offer other services to help support their vision of the connected office that is especially designed for the SMB marketplace. Partners that join the new program can receive up to 37% off the distributor's list price. Linksys will create several tiers for VARs, matching increasing discounts with increasing training and product specialization requirements.

Michael Simmons, who is the CEO of Protocall Communications and a Linksys VOIP VAR, is "excited about the future crossover between Cisco and Linksys. I love the new certification requirements because it will keep me in the right playing field."

The changes to the channel program are also aimed at making VOIP more palatable – and profitable – for VARs. "It is all about applications and what you can drive over VOIP," says Simmons. "If all we were in this for was to sell cheap dial tone, we wouldn't last long. The future of VOIP is in applications that can be layered above the IP layer and these applications are what will drive incremental revenue for VARs." This emphasis on VOIP is complemented by a series of new managed switches that were also announced today, including the SVR3500 Service Router (a 24 port switch for $1,500) and SVR200 Service Router (that includes wireless and ADSL support for $1,000) that both are used to build out VOIP network infrastructure.

"I am not trying to compete against everyone selling switches," says Nguyen. "I am much more interested in selling the more advanced solutions like Linksys One that have higher margins."