Cisco Partner Leaders Eye Cloud Marketplace, Co-Sale Opportunities

Cisco Systems looks to grow its partnership with cloud marketplace providers and collaborate more with non-resale partners.

Cisco partner executives shared their ambitions teaming more with cloud giants AWS, Microsoft Azure and Google Cloud on their marketplaces. That initiative is part of a larger movement to align Cisco’s route to market around customer purchasing preferences. Channel leadership in 2022 have been emphasizing increased managed services as part of that alignment. But executives shared plans to also align more closely with the public cloud providers.

Cisco’s Oliver Tuszik

Oliver Tuszik, senior vice president of Cisco’s global partner sales and general manager of routes to market, said all virtual sales teams have joined the partner organization. Nick Holden, vice president of global strategic partner sales and co-sell, said Cisco will build and deliver cloud-native solutions to be sold in a cloud marketplace environment.

“We want to provide more access to our technologies through the cloud marketplace as a procurement engine for our customers. We want to partner within the marketplace itself with the ecosystem of partners in the marketplace,” Holden said.

The executives made these comments during a Wednesday roundtable with analysts and journalists.

Cisco does not currently offer those services on hyperscaler marketplaces. However, Holden said the company has placed the offerings on its road map for fiscal years 2023 and 2024. Cisco does, however, offer its AppDynamics, ThousandEyes, Duo, Umbrella and other offerings on those marketplaces.

Cisco’s Nick Holden

Anurag Agrawal, founder and chief global analyst at Techaisle, said Cisco is demonstrating its commitment to embrace new go-to-market strategies. Those include managed services, marketplaces and co-selling.

“Cisco is not the same old hardware company anymore, where everything is sold through a value-added reseller,” Agrawal told Channel Futures. “It is keeping up with the evolving customer-buying process and preference, and how the partners go to market as well.”

Techaisle’s Anurag Agrawal

Co-Selling

Notably, Cisco has updated Nick Holden’s title to include co-selling. Company executives said they are building new incentives for direct and indirect sellers. They are also developing new programmatics to generate more business with non-transacting partners. Holden said Cisco is adding co-cell business development selling resources. Cisco reported a 400% growth rate for cloud co-selling.

“Part of the model that we’re looking at is, how do we become more attractive to software companies and other companies that don’t necessarily sell our licenses, our software or our hardware, to bring their value into our selling motion and bring our value to them in our selling motion?” Holden said.

Those non-transacting parties might be ISVs that can build complementary software into Cisco’s. They could also be consultancies like Deloitte, Accenture or a smaller player. And it might be with a hyperscaler like Microsoft Azure, whose account managers might team with Cisco account managers.

Cisco’s Jason Gallo

Jason Gallo attributed the marketplace and co-sell initiatives to the growing need for complex offerings.

“There are applications that are going to be built with increasing number of dependencies, because they’re building more and more microservices over the next few years,” said Gallo, who works as vice president of partner go-to-market acceleration. “And there’s a great benefit there. From a customer standpoint, they’re leveraging the best of the business processes, the best of all the different hyperscalers and pulling that together into customized applications. But the tradeoff is an increasing complexity. And those customers, they’re now looking to Cisco and all of our partners to really help them organize and address some of the questions and the challenges.”

Maintaining the Balance

Cisco channel execs said they want to roll out these services and programs in a manner complementary to resale partners.

“Of course, we want to do this in a very creative way for our existing primary routes to market, which are our channel partners,” Holden said. “Our channel partners provide an enormous amount of value to our customers.”

Holden noted the challenges associated with Cisco leaning into cloud marketplace providers.

“We’re not naïve to the disruption that a cloud marketplace can present to either a distribution model or channel model. Either it could be diluted, it could be …

… revenue-shift from one to the other, or candidly, it could be growth,” Holden said. “I’m in the latter camp, to be very frank.”

Nevertheless, Cisco is making this shift based on what customers want. A Bessemer Venture Partners study forecasts 88% growth in the cloud marketplace space over the next three years.

“Two years ago, we started to turn everything away from Cisco and the partner — and started only with the customer. At the end, we all paid by our customer,” Tuszik said. “How they want to buy, how they want to consume and what type of decisions they’re making were the leading things that started the entire route-to-market approach.”

The Partner Shift

However, many of Cisco’s resale partners are already working with the hyperscalers and have products on cloud marketplaces. For example, Gallo said ePlus recently signaled its enthusiasm.

“Customers can still work with our partners, and [partners’] services are listed on some of these marketplaces, which I think is creating a great profitability opportunity,” Gallo said.

Agrawal agreed that many of Cisco’s largest partners have evolved to a place where the co-sale and cloud marketplace initiatives fit them very well.

“They are increasingly gravitating toward being a cloud provider, which means that they are assembling these best-of-breed solutions to offer cloud solutions to their end customers,” Agrawal said.

Presidio’s Chris Cagnazzi

Chris Cagnazzi, Presidio‘s senior vice president and general manager of cloud and managed services, offered a comment in support of the initiative.

“Cisco is collaborating with the cloud providers and consulting Presidio on the best approaches for procurement of their SaaS and software offerings through marketplaces to meet our customers where they want to buy,” Cagnazzi said.

More  Data

Cisco’s business in the hyperscaler’s cloud marketplaces grew 65% year-over-year.

In addition, Cisco is seeing serious managed services growth. Meraki managed services grew 48% in fiscal year 2022, and its managed services for enterprise networking and switching grew 16%. Overall, Cisco reported an expected 39% increase in managed services over the next two years.