Cisco Partner Update: Hype, Specialization and Shifting Alliances

By Art Wittmann

I recently had the chance to hear about Cisco’s revamped channel partner programs from Steve Benvenuto, director of business development for the company’s worldwide partner organization. The call was a great chance for me to catch up on how Cisco views its partners, as well as how it views the IT and communications marketplace.

Interestingly, Cisco launched the briefing with a couple of slides on what it calls the Internet of Everything — what everyone else calls the Internet of Things. Cisco’s vision goes beyond IoT to include (according to its preso) people, process and data. Smack in the middle of one slide is the number “$19T” — that “T” is for “trillion,” implying that IoE touches most of the economy. Look, $19 trillion is bigger than the total debt of the United States and more than the full output of the U.S. economy in one year. The sum total of IT goods and services sold in a year globally is $2 trillion. Could it be that the IoT will eventually touch $19 trillion worth of stuff? Sure, I guess, but a better question would be: If you wiped out IoE technology, would there be a gaping $19 trillion hole in the world economy? The answer is no.

I’m not the first to point out the hype factor in Cisco’s IoT marketing. In fact, if you look at Gartner’s hype cycle published last August, there at the very top of the hype heap is IoT. That’s thanks in no small part to Cisco, but it’s hardly the only culprit. Not far behind IoT on Gartner’s hype cycle is “software-defined everything,” which is pushed by everyone from HP to IBM. It’s the nature of our business — lots and lots of hype. When it comes to channel strategy, however, my take is that Cisco does itself no favors by leading with IoE as it’s about to talk about something as practical as its partner programs. In fact, it made me wonder whether the rest of the presentation would be just as hype-driven. It’s good to think big, but when talking about programs for your business partners, reality is better.

To be fair, “visions” (the CEO ones, not the psychic ones) must be predicated on faith in their teams’ projections about what will happen. Our job is to remember that a typical vendor’s vision statement is more faith than fact, with a dose of ambition for good measure. For example, part of Cisco’s channel vision is that, by working with Cisco, partners can move beyond specifying products, technology and architectures and into improving their customers’ business processes and outcomes. As the partner makes that transition, its profits go up; so shows Cisco’s graphic. 

I think that’s a reasonable idea. But for any consultative organization, it’s also quite a leap from switch ports to business processes.

At Channel Partners, we’ve thought a lot about that and believe that truly successful partner organizations generally focus on a limited set of verticals, and they probably still don’t work from RJ-45 all the way to business process flow design. Particularly as channel partners look to get into SaaS applications, that leap can be a big one. Going from flipping ports to software and cloud integration is not a natural progression — it takes a ton of new expertise to get from Point A to Point B.

Cisco recognizes this and provides two paths for partners to follow. The most familiar involves getting more certifications as you move from Select to Premier to Silver (this designation will be retired next year) to Gold Partner. Cisco refers to this process as “gaining a breadth of expertise.” A new path, at least to me, is for partners to gain a depth of expertise in a given area. You can now become a master in cloud building, security and unified communications. Masters-level proficiency is not required for Premier or Gold certification, but other lower-level certifications are prerequisites, pretty much as before.

Cisco is also building alliances with a wide range of other vendors, from SAS to NetApp to Accenture to Microsoft.

Ultimately, what Cisco wants you to do is sell its packaged solutions, thus offloading some low-level bit-flipping and port-plugging and freeing you to work toward that business advisory nirvana. It’s an idea that makes perfect sense — unless your clients have standardized on IT stack components that aren’t from Cisco. Maybe they use different orchestration tools; UCS is a fine server platform, but most organizations have standardized on something else. Even in the realm of UC, where Cisco does well, there’s an awful lot of interest in Lync/Skype for Business.

In other parts of Cisco, meaning outside of channel programs, its leadership has long talked about selling to the business problem owner rather than to the CIO. That problem owner may be the CMO or the VP of sales — essentially it comes down to who has budget control. Increasingly, it’s not the CIO holding the purse strings, so where should you concentrate your efforts, especially if you want to do higher-level business outcome consulting?

The issue is, most channel partners are used to dealing with the CIO, director of IT or director of networking. These are longstanding, hard-won relationships. Cisco, in its desire to package up “solutions,” is working at cross-purposes with at least some IT managers, who are trying their hardest to limit the variety of systems they manage. In effect, Cisco is asking its channel partners to further diminish the standard of CIO control over IT architecture and tech purchasing decisions.

Getting this dance right will be one of the hardest things partners must do. If a client CEO or sales VP falls in love with a nice, packaged-up system from Cisco or anyone else (IBM and Oracle are proponents of the idea just as much as, or more than, Cisco), but the client CIO objects because standardization is what’s making running her IT organization affordable, what do you do?

It’ll be a question to ponder more and more.