Cisco partners get ready to rack and roll and NOC

On June 3, at Cisco Systems‘s (NASDAQ: CSCO) partner conference, the company made a series of announcements including an additional managed services offering, a significantly expanded VIP program, extended finance offerings, and certifications for its Unified Computing Solution. IDC believes this last is the biggest potential game changer for partners and Cisco.

The managed services offering is now making this program available to more partners, essentially making it more mainstream. Originally announced in 2007, the program has 61 partners worldwide. Compared to the approximately 60,000 Cisco partners (about 1,000 of these are gold or silver), this is clearly a small percentage of the Cisco partner community, especially given that managed services for partners is growing at a fairly healthy rate according to IDC data.

One of the barriers that Cisco partners met was the requirement to have a network operating centre (NOC) to be in the program. The new announcement opens this program to partners that have NOCs but did not meet the highest level of certification to be Master partners, and it also allows partners that do not have a NOC to participate. By enrolling in the program, partners without NOCs will be able to act as agents for the Cisco Managed Services portfolio through the Managed Services Channel Program (MSCP) qualified partners.

This is a win-win for both the MSCPs and other partners that are interested in managed services. The win for the partners without a NOC is the ability to offer managed services through a Cisco certified partner. The win for the MSCP is an economy of scale as they can sell more services for their NOC through the agents. This program goes into effect August 31, 2009.

Changes in the Value Incentive Program (VIP) include a change from the Advanced Technology focus to the new architectural approach, which is essentially a move from products to solutions. The VIP now includes all of Cisco’s data centre technologies, including unified computing, storage networking, and WAN optimization, as well as its existing offering for data centre switching. VIP is Cisco’s profitability program that rewards partners for investing in architecture practices around collaboration, data centre virtualization and borderless networks. Additionally, more products are eligible for the rich rebates that the VIP program offers. Switches and routers as well as the products designated as emerging, such as TelePresence, are now included in the program.

Clearly Cisco is putting some wood behind the arrow for solutions sales and is not shy about letting the partners know that they are best served with a pure Cisco solution. Since the VIP program began, Cisco has paid out US$2.1 billion with another US$400 million pending for a total of US$2.5 billion. This program will be rolled out on August 1, 2009.

Cisco Tinance has extended financing effective on June 1, 2009; this financing will be available for six months. Cisco is offering the partners up to 90 days financing. This is additive to the other existing financing programs that the company has already offered such as zero per cent financing for end users, which partners can pass on to their customers. This coupled with the reduction of the partner audits announced last year are further signs that Cisco is serious about helping its partners’ profitability.

On June 3, Cisco announced partner certifications for its Unified Computing Solution. Once referred to as “Project California,” UCS is the next generation platform that unites computing, networking and storage access along with virtualization resources into one system for the data centre.

Cisco, which relies heavily on its partners to deliver solutions, has now provided the partners with guidelines and guidance on how they can participate in the Unified Computing Solution market. Net new certifications include extended certifications for the Unified Data Centre practice which include Data Centre Unified Computing Design Specialist for Data Centre Architects, and Data Centre Unified Compute Specialist for data centre engineers. Three new margin accelerators for UCS Storage, WAN optimized and UCS were also added.

As a way to further broaden the Unified Computing Partner community, Cisco announced an Authorized Partner Program in support of the C-series rack mounted servers. Only Data Centre Networking Infrastructure (DCNI) Specialized Partners will be able eligible for this new classification to sell the new rack mounted servers after completing online training and passing an exam from Cisco.

Partner reaction to this has been mixed, ranging from “Wow – a game changer” to “you better show me.” Cisco has made significant strides in offering the partners many options with which to operate in its newly declared focus area. The company also plans to continue to keep a keen focus on its partners’ profitability.

However, Cisco has its work cut out for itself. While many of the Cisco partners (especially the DCNIs) do work in the data centre and do have reselling relations with the major server suppliers, the true test will come in Cisco’s ability to execute on this and do so fairly rapidly.

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