16 Takeaways from Cisco Partner Summit: Security Incentives, Subscription Push, More
Cisco unveiled several financial incentives for partners that deliver cybersecurity solutions, among many channel updates.
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Alexandra Zagury speaks at the Cisco Partner Summit
Oliver Tuszik proclaimed “the age of the partner” to the summit audience. The channel accounts for about 90% of Cisco’s business. He said customers and vendors are more and more relying on partners to deliver and implement solutions.
He cited research from Accenture and Canalys that found that 90% of tech sales are tech assisted. Moreover, 69% of end users said they prefer partner-led sales.
And Tuszik said the financial market is validating the importance of partners. He said more and more private equity firms are investing in Cisco partners. And more of those investors want to meet with Cisco to more fully understand the vendor’s strategy.
“I see huge upside. Because there’s investment, there’s interest, there’s power, and it helps us,” Tuszik told the media.
Jonathan Davidson in August accepted the position of executive vice president and general manager of enterprise and cloud, and massive-scale infrastructure teams. A long title, but it means Davidson has replaced former networking leader Todd Nightingale, who moved to Fastly this summer.
Davidson spent much of his career at Cisco before going to Juniper Networks for seven years.
Robbins said Davidson will spur a faster consolidation of the various platforms Cisco has built and purchased over the years.
“I think that’s going to happen very quickly. I think he’s going to accelerate the pace of how fast Meraki ramps on to managing the Catalyst portfolio,” Robbins said.
Talk of supply chain has droned on and on throughout the channel in 2022, but no one can deny the impact.
Multiple partners stated publicly at the conference that they struggled more with partial and incomplete shipments more than any other problem. Cisco recorded a record backlog in its latest quarterly earnings.
Robbins noted that he is seeing improvements.
“I know that doesn’t mean every experience you have is perfect today. We’ve had challenges, but it is getting better,” he said.
But other macroeconomic problems are rearing their heads. Cisco has already pointed to the economic impact of Russia’s invasion of Ukraine. And of course, a possible recession looms.
Robbins avoided making forward-looking statements in a Q&A. But he pointed to the robust state of tech spending.
“In the past, if we had had one event like we’ve had over the last three years, spending would have just fallen off a cliff,” he said.
He also noted that crisis has, in many respects, become the new norm for executives.
“To be honest with you, there’s nothing different about how we’re running the company in anticipation of any kind of challenge,” Robbins said.
Alexandra Zagury, Cisco’s vice president of partner managed and as-a-service global partner sales, said 45% of Cisco’s TAM will be through a managed service by 2025.
Moreover, it will be partners doing those services, not Cisco. Tuszik reiterated that during his Wednesday keynote.
“That has never been our motion, and it’s never been our plan,” he said.
To his point, he cited the doubled investment Cisco has made in its managed services market development funds.
Cisco executives fielded questions from analysts about the status of Cisco+, its portfolio-as-a-service model.
Robbins said the aforementioned supply chain challenges put a damper on Cisco+ progress. Cisco+ involves services, but it certainly also involves equipment.
“We also realized we weren’t as operationally ready as we thought we were,” Robbins told analysts. “I think over the next 6-12 months you’ll see a lot of progress on this.”
However, Robbins pointed to as-a-service wins across the business. That includes Meraki subscriptions, as well as the integrated Catalyst/Meraki offering.
“There are a few things we need to do differently, but there are an awful lot of offers that are out there today for the customers,” Robbins said.
Although the partners are the ones providing the managed services, they still want Cisco’s help.
ePlus, for example, drove 35% of its technology segment’s net sales through Cisco last quarter. The firm has built a managed services practice and embraced Partner Lifecycle Services. ePlus president Ken Farber (pictured right) said his firm “bonded” and integrated its first level support with that of Cisco.
“We were very adamant that in order for us to do this [PLSS], it had to be co-delivered, so the customer knew that we [ePlus and Cisco] were both in it together and had skin in the game together. And we would share our success and then we share our failures,” Farber said.
Farber said Cisco has made significant strides in responding to his company’s feedback and working in a more collaborative manner.
“Historically, there were times where we were knife-fighting out in the field with our respective organizations,” Farber said.
Cisco’s Perform Plus global incentive program saw an 18% year-over-year growth. In addition it grew 38% percent in small business.
And now Cisco has expanded Perform Plus to reward partners that generate between $70,000 and $200,000 with Cisco. The new “Activate” tier reportedly rewards “consistent bookings” and hitting quarterly targets.
Cisco this week unveiled six solution specializations.
The solution specialization track adds to existing architecture specializations, business specializations and Cisco Powered Service specializations.
Partners can earn the new specializations use them to earn gold, premier or select status Cisco. And the “lightweight” process of getting these specialists can keep partners from making massive investments practices that aren’t core to their business.
Read about the solution specializations.
The very tagline of the event, “Let’s Own It,” spoke to Cisco’s desire for its partners to engage more with their customers throughout the lifetime of the technologies they sell.
Cisco introduced Partner Lifecycle Services in 2021, and 569 partners joined in the first six months. Cisco made Partner Lifecycle Services globally and generally available to all qualifying partners on May 16. Tuszik said participating members are seeing larger deal sizes and greater profitability.
ePlus on Wednesday claimed the title of the first North American partner qualified Cisco Partner Lifecycle Services Support program.
But Tuszik also said Cisco has been taking feedback about how it can expand the program’s roadmap.
Cisco in March 2023 will make its Cisco Partner Experience Cloud (PX Cloud) generally available. In July 2023 Cisco will launch success tracks that ultimately will help partners build branded solutions.
Andrew Sage, vice president of global distribution sales, said 35% of Cisco’s channel business transacts through distribution. These two-tier partners typically focus more on midmarket and SMB. Moreover, Sage said these are consistently Cisco’s fastest growing partners.
And that growth is partially thanks to the efforts of distis. For example, Sage said some distributors have earned the Customer Experience specialization on behalf of their smaller partners that lack such a capability. Those efforts, in addition to more traditional help around financing, is fueling partner growth, Sage said.
Cisco made the argument to partners that it does much more than network.
To that end, the vendor unveiled Duo Passwordless Authentication, allowing customers to do single sign-on using biometrics. It also launched its hybrid work-focused Secure Firewall 3105.
Emma Carpenter, a former Palo Alto Networks sales leader, joined Cisco four months ago as its vice president of global security sales.
She said she joined Csco because of its “huge opportunity” in cybersecurity.
“For every $10 of networking in a large networking opportunity, you’ve got at least $1 of firewall opportunity, and then you’ve got at least another $1-$2 of incremental SaaS revenue for things like MFA and identity policy,” Carpenter said.
Jeetu Patel, executive vice president and general manager of security and sollaboration agreed.
“Partners can land key products and then expand across the Cisco Secure portfolio to increase profitability while enabling customers to securely achieve their digital transformation goals,” Patel said.
But helping partners move into security is no small lift. Brad Davenport, vice president of technical architectures for Logicalis, said partners need to engage in a sophisticated conversation with their customers about how they can “de-risk” their business.
“It’s been really difficult in the recent past to just go and sell the next biggest, baddest firewall. Speeds and feeds are often less of a concern on Mahogany Row than they are in the data center or at the network layer,” Davenport told analysts.
Cisco now is offering partners a “one year on us” incentive for selling cybersecurity. When a partner sells a multiyear cybersecurity software deal, Cisco will give back the cost of the first year.
“This is not designed as a way to rapidly gain market share,” said Shawn Yuskaitis, partner go-to-market leader for global security. “It’s more of a profitability driver for the partner themselves.”
Cisco Capital is also making its fixed-term subscription payment solution available for secure firewall. Partners who return existing firewall hardware can earn 10% replacement incentive.
Cisco has pledged to reach a 100% product return and ultimately reach net-zero greenhouse gas emissions by 2040. And channel executives said partners are buying into the mission.
Two hundred sixty-six partners have earned a Cisco environmental sustainability specialization, executives said. Moreover, 75% of Cisco’s top 20 partners have publicly stated a sustainability strategy.
Furthermore, Cisco executives insisted that partners who participate do more than just something “good for the world.” Sustainability will lead to positive business outcomes, they said.
“Increasingly we see partners and our customers that are including aspects of all this as part of their purchasing criteria,” Robbins said.
Cisco works with four main partner types: integrators, providers, developers and advisors. One could crudely summarize integrators and providers as legacy VARs and MSPs, respectively, and much of the conversations about partners at the summit pertained to them.
But executives emphasized that “meeting customers where they are” also means investing in application developer partners and commission-based advisors.
“There are a lot of things we have in store for the developer and advisor. And we’re pretty invested in trying to make it happen because we know relative to an integrator provider, we have some fast-pedaling to do to catch up,” said Marc Surplus, vice president of partner strategy and programs.
To Cisco’s credit, it expanded its Webex Contact Center offering to agent partners on Wednesday.
Read about the expanded agent/TSD offering.
Farber said the last three years have demonstrated the impatience of customers. And macroeconomic conditions impacting Cisco and its partners have certainly don’t really work as an excuse. Many of them are more willing to switch to a vendor that will give them a shorter wait time. Patience has worn thin.
“There’s too much going on in our industry today, whether it’s staffing shortages or global supply chain issues or turmoil in governments. And customers just don’t want to hear about them anymore,” Farber said.
Thus, vendors need to engage with their partners with the realization that customers are less anchored in their loyalty. Their allegince must be continually earned.
“That customer loyalty is paramount. The ask [from partners to Cisco] is, ‘Do it right, do it faster, do it smarter,'” Farber said.
Cisco this summer announced a new wholesale route-to-market for Tier 1 service provider partners.
Cisco executives and partners said the new offer allows partners to offer Cisco Webex solutions to customers through a single commercial contract. That comes in handy when providers are trying to transact quickly with SMBs.
“We’re really excited by the fact that it removes the friction in working with Cisco and gives them a really predictable price to go attack that small business space,” said Kristyn Hogan, who leads Cisco’s global collaboration partner sales.
Hogan added that the model benefits its massive base of Broadsoft customers. Cisco bought Broadsoft in 2018, and Hogan said Broadsoft currently comprises about 35 million seats.
“We absolutely love that business. We continue to support it. But as there’s been an appetite from our service providers to transition some of those customers over to WebEx calling, this offer has given them that easy button to drive those migrations,” Hogan told Channel Futures.
Cisco this summer announced a new wholesale route-to-market for Tier 1 service provider partners.
Cisco executives and partners said the new offer allows partners to offer Cisco Webex solutions to customers through a single commercial contract. That comes in handy when providers are trying to transact quickly with SMBs.
“We’re really excited by the fact that it removes the friction in working with Cisco and gives them a really predictable price to go attack that small business space,” said Kristyn Hogan, who leads Cisco’s global collaboration partner sales.
Hogan added that the model benefits its massive base of Broadsoft customers. Cisco bought Broadsoft in 2018, and Hogan said Broadsoft currently comprises about 35 million seats.
“We absolutely love that business. We continue to support it. But as there’s been an appetite from our service providers to transition some of those customers over to WebEx calling, this offer has given them that easy button to drive those migrations,” Hogan told Channel Futures.
CISCO PARTNER SUMMIT — Cisco Systems chair and CEO Chuck Robbins told partners and analysts he expects the company’s platform consolidation to accelerate and its subscription offerings to expand in the upcoming year.
The IT giant affirmed its support for the channel community in various presentations during this week’s Cisco Partner Summit. That support comes in the form of discounts for its full-stack observability and cybersecurity solutions, consolidated tools, sustainability and financial incentives for new partners. Cisco is also vowing to make more investments in its younger advisor and developer partner tiers.
Cisco’s Chuck Robbins
Robbins said Cisco has gained momentum with partners after years of responding to feedback. And oftentimes, it wasn’t the happiest feedback, he said.
“The first time I walked on stage at Partner Summit, I actually thought there might be rotten fruit involved. Because it was over 20 years ago, when there was a question of whether we were committed to your profitability,” Robbins told the partner audience.
Economic Shifts
Cisco’s Oliver Tuszik
All of these changes come as Cisco and its partners face questions about the challenging macroeconomic circumstances. That includes a potential recession, and of course, a stressed supply chain.
“We are setting up a motion with our partners that allows them to react faster to the next disruption, ” said Oliver Tuszik, Cisco’s senior vice president of global partner sales and general manager of routes to market.
Tuszik said Cisco partners grew their overall bookings by 10% in 2022. They also increased managed services revenue by 35%.
Channel Futures attended Cisco Partner Summit and compiled 16 key messages from Cisco executives and partners. Scroll through the slideshow above to read what you might’ve missed.
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