Cisco Emphasizes Partner Profitability

By Khali Henderson

At the Cisco Partner Summit in Las Vegas Wednesday, Cisco Systems Inc. executives drove home the message of partner profitability and outlined new programs to support that goal.

Keith Goodwin, senior vice president of worldwide channels for the gear maker, told partners that together Cisco and its channel have reached an inflection point wherein its no longer possible to address the breadth of opportunities.

These opportunities have grown from 10 years ago addressing enterprise switching and routing requirements with basic support to advanced and emerging technologies, multiple target markets and lifecycle support services for those targets. On top of that are opportunities for vertical market solutions and growing offer types that now include outsourcing and managed services aside from equipment resale.

We can no longer expect you to invest across those opportunities, Goodwin said.

The company plans to advise its partners in much the same way a financial adviser aids investors by bringing partners selective opportunities to match their needs and profitability best practices, he said.

To that end, Cisco is completing a partner profitability study a followup to one done three years ago that looks at the metrics for above average performing partners. In general, Goodwin said, the study found:

Partners are making money in many different ways and more ways that they were three years ago.

Above average performers derive their success from different areas, including advanced technologies, services and vertical specialization.

There is a wide variance in how partners are transferring that to the bottom line, for example, by having larger transaction sizes or lower cost basis, etc.

In addition to gathering these best practices metrics, the company has doubled its investment in partner enablement, said Goodwin. This has translated into partner-ready content prior to product launches, a real-time quote builder and 30 new training offers with 74 in the pipeline.

The big question for partners, he said, is which ones apply to them? Goodwin said Cisco is anticipating that question and rolling out a Partner Enablement Navigation tool that enables partners to create a profile for their business, which will queue/push appropriate offers in support of their business model.

Further, Cisco is creating an E-consultant program that gives partners Web-based access to their performance data, analyzes it against opportunities and peer performance and points to recommendations on where partners left money on the table and partner-enablement tools they can access to remedy the gaps. The service will be available in May for 4,000 partners for which Cisco has performance data.

Further, the company went live at the end of March with its new Service Contract Center, an end-to-end contract management system. It enables instant quote-to-order conversion with a click of a mouse. It also tracks renewal opportunities and manages contracts for accuracy, so that customer deliverables are met.

These two initiatives address the business process today, said Karl MEulema, vice president of marketing and channels, Cisco Services. As businesses change as the network becomes the platform, customer requirements are changing to include the channel as an extension of their IT department.

To that end the company announced the addition of an exclusive partner-delivered managed service called Cisco Smart Care Services, which will be available later this year.

Cisco Systems Inc. www.cisco.com