According to Cisco Canada’s new channel chief Ross Pellizzari, partners have the potential to tap into a $2 billion installed base in Canada.With that market opportunity, Cisco Canada has released the Foundation Advantage, which is an integrated channel program focused on incenting partners to spur current Cisco customers as well as those using competing equipment to upgrade.
At the heart of the plan will be trade-in credits and a Cisco discovery tool.
The trade in program is the largest ever designed by Cisco, said John Growden, director of routing and switching, technology sales and programs/worldwide channels for Cisco.
“We work with customers for trade in of Cisco product for new Cisco product and we do figure out the amount of credit based on what the trade in is and the buy is at the time of purchase. From there we reduce the price of the product,” he said.
The new wrinkle of the trade-in program is the competitive installed base.
Growden added four factors in the market are contributing to this:
The networking connectivity boom between 1997 and 2000 because of the Y2K phenomenon;
The Internet bubble following the turn of the century;
Security concerns along with support issues with older equipment; and
The onset of bandwidth intense VoIP and video applications on the network, are encouraging customers to upgrade its underlying infrastructure.
“The Y2K effect was that everyone replaced everything in the network. And, then the bubble economy meant a large bubble of product. We’ve figured out that the size of the opportunity in North America and it is absolutely massive,” Growden said.
He added that the PC replacement cycle is between two and three years, but in networking it is four and six years. At that turnover rate he forecasts the size of the opportunity to be more than US$20 billion in North America.
North America’s aging Y2K installed base is as follows:
• 143 million switches,
• 516,000 mid-range routers and
• 2.6 million low-end routers.
The Cisco trade in towards new equipment is calculated using the Cisco Technology Migration Program calculator where net credits are applied at the time of purchase and the trade in product is returned to Cisco.
With the competitive portion of the plan, the same credit process applies. However, Cisco has identified HP, 3Com, Nortel, Enterasys, Extreme, Juniper and Symbol in this program.
Partners through this program can achieve 15 per cent back end rebates based on the credits earned.
Certified partners with a minimum of $10,000 in trade in credit per six-month period can qualify.
The Cisco Discovery Tool is free software that partners can install in customer environments to figure out where all the routers and switches from Cisco are. Currently, the tool gives back little detailed information on competitive products, Growden said, but it can find them. The tool generates a report on where the security holes are and which products are at end of support. The partner can build a service offering around this information, he said.