Cisco partners have the potential to tap into a $2 billion installed base in Canada, according to Ross Pellizzari, the company’s new Canadian channel chief.
With that market opportunity, Cisco Canada has released the Foundation Advantage, an integrated channel program focused on incenting partners to spur current Cisco customers as well as those using competing equipment to upgrade their hardware.
At the heart of the plan will be trade-in credits, the TAP program 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. We 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 program is the competitive installed base.
Growden added four factors in the market are contribute to this:
The networking connectivity boom between 1997 and 2000 because of Y2K;
The Internet bubble following the turn of the century;Security concerns along with support issues with older equipment; and
The onset of VoIP and video on the network, which are bandwidth-intense applications and therefore need an upgrade to the 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.
The North American 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 a Technology Migration Program, calculator where net credits are applied at the time of purchase and the trade-in product is returned to Cisco within a six month period.With the competitive portion of the plan, the same credit process applies. However, Cisco has identified HP, 3Com, Nortel, Enterasys, Extreme, Juniper and Symbol Technologies in this program.
Partners through this program can achieve 15 per cent back end rebated based on the credits earned.
Certified partners with a minimum of $10,000 in trade in credit per six month period can qualify.
As for TAP, the TAP 1 plan is still only in the U.S. TAP 2 has expanded into Canada as well as Europe.
The Cisco Discovery Tool is free software 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 gives back a report on where the security holes are and which products are at end of support. From there a partner can better understand his clients networks and what it needs to become a more modern network. Also, a partner can build a service offering around this information, which they can charge for.