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Cisco gets aggressive in the mid-market

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BOSTON – One of the key aspects of the mid-market opportunity is sizing it up properly for all geography. Cisco Systems at its Partner Summit conference attempted to do that for the 2,000 channel partners in attendance. Cisco pegs the mid-market as companies with 100 employees to 1,000 employees.

Bruce Klein, the newly appointed chief of the Worldwide Partner Organization for the networking giant admitted that in some countries 1,000 employees is a very large enterprise and that in Cisco U.S. the mid-market would start at 500 employee companies.

According to Cisco, mid-size companies represent a total addressable market of $25 billion for just technology and an additional $30 billion for services by 2016.

Andrew Sage, the worldwide partner led chief for Cisco, said that the company is doubling its investment in Partner Led resources and incentives from $75 million to $150 million, while increase its product portfolio with purpose-built technology such as Cloud Managed Networking Portfolio, Managed Services Dashboard, Catalyst switch 2960 and Virtualized Foundation Smart solutions.

“The IT staff along with channel partners have to deal with challenging issues such as BYOD, mobility, collaboration, creating new business apps, securing the infrastructure and virtualizing the data centre. By doubling the incremental investment for partners it will help them grow and be more profitable,” Sage said.

The strategy Cisco is employing to tackle the mid-market is based on cloud and the company made enhancement to its Cloud Partner Program to help solution providers capture more revenue. The program changes will begin this August will be tied into the Value Incentive Program (VIP). They are:

  • Existing Cisco partners that become Cloud Services Resellers will receive a VIP rebate on sales of Cisco Powered Services;
  • Cisco’s internal sales force is compensated to sell a Cisco Powered Service through the Cloud Service Resellers;
  • Cloud partners will be able to use Cisco-Powered brand as part of their own marketing campaigns;
  • A rewards program will provide points for Cisco Learning Credits or prizes such as big screen TVs; and
  • Access to an online self-service portal called Cloud GTM Resource Center.

Steve Benvenuto, Cisco channel programs manager, told CDN that Cloud GTM Resource Center is a marketplace for cloud providers to promote their own offerings. “Think of it like a Match.com for the Cisco cloud community,” he said.

Cisco has also developed a guide book for the channel partners called The Business Transformation Playbook. This six chapter guide took nine months to produce and has best practices for solutions and opportunities, business models, sales, marketing, services and tools and resources. Benvenuto said that partners can get these playbooks on PDF or on video-on-demand. Cisco may also produce workshops based on these playbooks for partners if requested.

“We want no excuses for getting into the cloud game,” said Cisco worldwide channel chief Edison Peres. “Selling cloud and managed services is a new business model for some partners and it’s developing a reoccurring revenue stream. If you move too quickly you will have cash flow challenges and if you move too slow you will lose that customer to competitors,” Peres said as one of the reasons for creating the Business Transformation Playbooks.

Cisco also announced a 90-day grace period for the VIP program so that channel partners can still take advantage of the margin opportunity provide in advanced technology skus.