Even as John Chambers announced Cisco's aim to become the #IT and communications company, it plans to handhold partners through a fundamental business transformation.
"History is littered with competitors, big and small, who challenged us and failed". A strong statement coming from an IT company head--most would think this as a statement befitting Larry Ellison of Oracle. However, this comes from the mild mannered John Chambers, the Chairman and CEO of Cisco Systems while delivering the keynote address at the 17th Global Partner Summit for Cisco at Boston.
Reiterating Cisco's goal to become the #1 IT and communications company in 3-5 years' time (they are unarguably #1 in communications, but in the Top 5 in IT), Chambers emphasized the roles partners would play in achieving the milestone. It is obvious that to sustain Cisco's growth drive in the near future, its vast ecosystem of 67,000 active partners (and counting) would have to undergo a near 360 degree business transformation. While delineating what should be the three areas of focus for partners in the newer environment, Edison Peres, Sr VP, Worldwide Channels, Cisco Systems also emphasized that these would be the key attributes for a successful partner of the future. First, partners should make hybrid IT a foundation of their value propositions; second, they should lead with solutions and professional services; and last but not the least they should transition their sales teams to address newer buying centers.
Easier said than done, but as Peres reiterated Cisco would do its utmost to enable partners to successfully make this transition. With mid-market opportunity being identified as a growth driver for channel partners, Cisco would be doubling their investments in Partner Led resources, incentives and programs to $150mn in FY14 up from $75mn last year.
Much of this investment would go towards an innovative demand generation exercise. Cisco is committed to generate $1bn in sales-qualified leads through marketing for its partners in the next financial year. And Bruce Klein, Sr VP, Worldwide Partner Organization reasserted that to avoid possible conflicts of interest or cannibalization between partners while processing these qualified leads Cisco would follow the progress of the lead through a funnel created by a salesforce.com dashboard.
The Partner Plus program designed to help partners grow their mid-market business (with an estimated $25bn TAM for technology and $30bn TAM for services by 2016) has already 2000+ partners enrolled globally and growing. More than 40% have met their targets and are receiving reinvestments checks (the number is likely to grow to 65% this year) and more than 11,000 leads and 39,000 prospects routed to partners through the sales collaboration platform.
Thanks to its Meraki acquisition earlier this year, Cisco is also able to bring out the Cisco Meraki Managed Services Dashboard that offers partners options like MSP portal, managing their own branding, support ticketing, remote monitoring live tools and help enhance partner profitability. After all, as Peres admits, unless partners are not able to sort out their cash flow issues today, all these plans about business transformation would come to a naught. Till date, about 100 partners are enrolled under the the Cisco Meraki Managed Services Dashboard.
Cisco is also making significant new enhancements to its Cloud Services Resale Model to better equip th cloud reseller to capture new revenues from the cloud opportunity. Available from August 2013, existing Cisco partners who become Cloud Service Resellers will receive a Value Incentive Program (VIP) rebate on sales of Cisco Powered Services-while for the rest the rebate would amount to 70%, those partners opting for hosted collaboration model would receive 100% discount.
The Cisco Cloud Services Resellers would also have access to Cisco-powered branding for their marketing campaigns and would also benefit from a Cisco Rewards program. While they can access the Cloud GTM Resource Center, the new icing on the cake is the Cisco Business Transformation Playbook that would provide a blueprint for partners transitioning their business from a product reseller model to include annuity-based cloud revenue.
Rajneesh De (The author was hosted by Cisco in Boston)