Cisco: Partners 'In Step' with Transition to Software Centricity

As many companies in the channel are doing, Cisco is undergoing a transition, from hardware to “software-centric,” and partners are and will continue to play an important role in making this process successful.

That’s according to Gary Wolfson, who recently was named Cisco’s director of global software partner development. He is part of Cisco’s global partner organization and is leading the company’s partner go-to-market and recurring-offers business.

Cisco’s Gary Wolfson

Last month, CNBC noted that Cisco’s stock reached a 17-year high after a Bank of America Merrill Lynch analyst said the company is in the early stages of a “positive transition to software.”

Cisco has made a number of acquisitions as part of this transition, the latest being BroadSoft, which the networking giant completed earlier this month. The deal, worth $1.9 billion, puts Cisco on the fast track to having a full, multitenant SaaS collaboration solution.

In a Q&A with Channel Partners, Wolfson gives an update on Cisco’s transition and talks about how many partners are transitioning — along with his company.

Channel Partners: What prompted the need for this transition that Cisco is undertaking?

Gary Wolfson: The transition that we would categorize ourselves as going through is to become a software-led, or software-centric company, and I call that out that way because that’s different from becoming a software company. Being a software-centric company and making that pivot is really building a world-class software business to complement our … hardware franchises that you’ve come to know us for. And really what’s driving this is customers. Customers are looking for new ways to consume technology, [and] they’re looking for a software experience that helps them meet their business requirements; that’s then underpinned by hardware that that software runs on.

CP: What’s the status of this transition and what all does it entail?

GW: I’d say the status is, we’re well underway in terms of our progress both from a technology and a go-to-market perspective. It entails everything from how we construct our offers that package up the way partners sell and customers consume our software, and it also has to do with the way that we actually architect our products so that the software that customers buy delivers the best experience. So it’s both a technology and go-to-market transition that we’re undertaking.

CP: What role do Cisco’s partners play in this transition? Are there new opportunities for them?

GW: In so many ways, partners at the heart of this transition and our go-to-market. We go to market to a large degree through the channel, so helping them with this transition, and really making sure that they’re successful and profitable, is a top priority for all of our executives here at Cisco.

We have a number of our partners that have embarked on this journey with us, and the ones that we’re finding are most successful are investing in a number of key areas of their practice. They’re investing in …

… a dedicated software practice lead, so they look at software … as a dedicated practice that sits horizontally in their business.

And many of them are appointing senior executives to that position because it’s that strategic. We see partners investing in expertise around software licensing so that they can help customers purchase the right license arrangement that meets their consumption needs. We see partners investing in customer-success functions, and customer success is all about driving adoption and utilization, and the partners that are really doing this well are actually beginning to make customer success a key part of the DNA of their business. So when they go in and they sell a deal, they’re actually engaging with the customer long before the deal’s ever landed to build out an adoption plan for the customer, so that after that deal has landed, the customer-success team moves in and engages in regular work with the account to help them drive and get value from their investment. And then the last area that we see partners investing in is software development, and many of our products have now opened up with APIs that enable our partners to build on these platforms to create custom applications to integrate into business process[es]. All of these different areas that partners are investing in open up new service-rich opportunities for them to drive new profitable growth.

CP: Sounds like Cisco’s transition is helping partners make changes they need to make in their business model.

GW: That’s absolutely correct. And for the partners to continue to be most relevant to their accounts, they’re recognizing the need to make this transition. So we’re very much in step and doing this together. And one of the things that I’ll point out about our strategy that really resonates with partners is this strategy that we call platform economics, which is what we refer to as a virtuous cycle where if you’re delivering ongoing, recurring value afforded to customers through the software suites that they buy, then that opens up the opportunity for partners to derive recurring revenue. And those two things go hand in hand: delivering recurring value, and with software we can innovate fast and deliver incremental capabilities ongoing through those software suites, and that opens up the opportunity for partners and Cisco to enjoy healthy growth of recurring revenue over time in the life cycle of the customer.

CP: Does the BroadSoft acquisition play a key role in Cisco’s transition? If so, how?

GW: We’ve made a number of acquisitions as we’ve been on this journey to software-centric, and BroadSoft I would categorize as another one of those, bringing [their] cloud telephony and call-control platform that now we’ll combine with the … meetings experience run by WebEx, and then our team collaboration and video underpinned by Cisco Spark. So when you put all of that together, all of those really open up the doors for exciting, new partner and Cisco opportunities to drive more recurring value and recurring revenue.

CP: How big of a role is cloud going to play in Cisco’s future? How about IoT and other emerging technologies?

GW: Cloud is a really important part of our strategy, and one of the things that we’ve identified and we’re really working to leverage our portfolio is to embrace what we would categorize as a multicloud world. That multicloud world says the customers don’t have one cloud, but in fact in many cases they’re consuming from multiple clouds, whether there [are] SaaS subscription services, application workloads that might be running in a public cloud, applications or workloads that might be running in their private cloud, or …

… some hybrid version of all of that, and we’re able to bring to bear our full portfolio as Cisco to help our customers embrace, manage, secure and consume their cloud capabilities in that multicloud world. It’s a huge part of our strategy.

IoT continues to play a very important part of our strategy. Every day more and more things are connected to the network and many of those things need to be secured, to be delivered, and in a lot of ways it’s the combination of our software and hardware that will enable that experience, and certainly our world-class channel partners delivering that.

CP: Is Cisco and its partners’ end-customer profiles changing or evolving along with this transition? Are there new types of customers emerging?

GW: I wouldn’t say the profile or types of customers that we’re looking at are changing, but what I would say is within the diverse set of customers that we serve on a global basis, from the largest of enterprises to the smallest of businesses, what we’re seeing is the needs within those businesses changing. And I’ll characterize some of the needs that we see. We see more involvement from line of business in the technology decision making. So what that does is opens up a whole new engagement pathway for Cisco and our partners to find new ways to deliver value to the customer. They’re concerned about security and how they secure critical business assets. They’re concerned about mobility and how they make sure their mobile workforce can remain productive. They’re looking at technology in the line of business to say, “How do I compete effectively in this global landscape that continues to create new pressures?” And they look to the combination of our software and hardware delivered through our partners to take those challenges on. So it’s really the buying centers within the customer that we see evolving and it’s not so much new types of customers.

CP: How pivotal is this year in terms of growth and innovation? What do you want partners to know about the goals for this year and how they come into play?

GW: This period of time that we’re in, it is a pivotal time and it’s driven by the customers’ need to strategically look at IT and technology in new, strategic ways. And we think that the transition to being software-led is going to help us to open up those recurring value opportunities to meet those customer demands. Software gives us the ability to innovate fast, deliver incremental value onto that software and onto these platforms, and to do so in a rapid fashion.

And from a partner perspective, I want partners to know that they are the most important part of this transition from the seat that I sit in, and that helping them make this transition profitably so they can open up new services, opportunities and new revenue streams to deliver sustainable recurring value and recurring revenue, is really what this is all about. And doing this with partners is fundamental for us.