In another installment in its journey to becoming a recognized player in the small-to-medium-sized business marketplace, Cisco Systems Canada has launched a series of partner profitability initiatives along with several new products.
Called the Small Business Advantage for Partners and Customers, this new effort will see the networking giant increase rebate margin for non-Cisco Select solution providers. With that, a new partner profitability framework has been created that would see a diverse group of partners accepted into Cisco’s channel network, while also providing more money under a program called Partner Development Funds (PDF).
”Over the years we’ve been doing the right thing for a lot of partners such as the Selects and we get great feedback from them. But for some we’re not doing a good job with profitability,” said Andrew Sage, Cisco’s vice-president of worldwide small business sales.
Inside PDF will be five tracks that will map to different partner types in the SMB including registered partners, specialized partners, e-tailers and service providers. PDF will offer five per cent rebates on core Cisco gear such as routing and switching. There will also be an accelerator option for those channel partners that perform well or develop advanced technology solutions. This option will be capped at $5,000. Anything over that, Sage said Cisco would consider moving that partner to another program.
Also part of quarterly PDF program will be a streamlined view of rebates and sales forecasts and targets in one view online. One of the goals of this program is to improve partner cash flow, Sage added.
Cisco has set a global target of 20,000 new SMB partners. Sage said that currently the company has netted 3,500 with a target of 5,000 for the end of this quarter. In Canada, the target is between 170 to 200 channel partners.
“We’re definitely in recruitment mode. We want to make some new friends and we’d like to do it with a profitability plan that actively looks at local partners. There are 50,000 companies we like to do business with globally and we aren’t right now,” Sage said.
Cisco is also going to utilize its field teams to start knocking on doors with limited time offers and a point of introduction to the program.
“The first hurdle we have is that they don’t think we’re in this business. The second is that they think we’re too expensive. That will take a little bit of education because SMB is made up of price-conscious buyers. Over time the third obstacle is that we’re too complicated and hard to work with. By putting new field teams in place and by opening up these new support capabilities, we’re showing tens of thousands of partners that we are serious about the SMB,” Sage said.
Another aspect of the SMB program is piece of mind contracts. These contracts have several price ranges and are set on three-year terms. Sage said that sometimes Cisco gear is too complex to quote and that these contracts should resolve those fears with customer and the channel.
Cisco will also provide next business day replacement parts, which is something the channel partners loathe to do, along with software upgrades.
This enables partners to focus on money-making services such as professional services and monitoring. The customer gets piece of mind knowing that even if the solution provider goes out of business, Cisco will still be there to support them.
Cisco also announced new products to support its profitability plans. They are: Cisco SA 500 Series Security Solution, SPA 500 Series IP phones and the Smart Business Communications System 1.6. These products have an entry price point of $550.
The company will also extend the zero per cent financing on an expanded range of voice and unified communications solutions through to Dec. 31 of this year.