Cisco taking managed services to the masses

BOSTONCisco Systems (NASDAQ: CSCO) is striving to make managed services appeal to the masses by lowering the barrier of entry for the channel.

At the Cisco Partner Summit, held here, the company launched the next generation of its Managed Services Channel Program (MSCP), to be made available on Aug. 31st, in hopes of attracting thousands of channel partners.

Currently, Cisco has only 60 channel partners who are in MSCP. The problem is that one of the requirements to gain access to the program was that the partner had to build a Network Operations Center (NOC), said Edison Peres, senior vice president, go-to-market group, worldwide channels for Cisco Systems.

“It’s about time (Cisco) gets with the market,” said Janet Waxman, a research analyst for IDC based in Framingham, Mass.

Waxman said the strategy behind the upgrade to MSCP is well-timed since services are by far the most important and profitable area of a partner’s business. Dropping the NOC requirement is also wise because many partners had a hard time building them.

She added that expanding the program for the masses and removing the NOC requirement will mean more channel partners who wanted to get into managed services can afford to now.

The new MSCP will enable partner-to-partner collaboration through a white label arrangement that allows two partners to work together to deliver a managed service using one NOC. Cisco is also providing a single discount, based on the partner level attained in MSCP, across all Cisco products the partner manages.

The company has also branded a top tier for this program, called Master Managed Services Partner, for those solution providers who have the highest level capability.

“The white label provision is a good idea because it does two things. First, it allows the channel partner who can’t or doesn’t want to build a NOC to be part of the program. Secondly, those that have a NOC can profit from it,” Waxman said.

“A NOC is expensive and we don’t expect smaller partners to invest in a NOC. They can join the program and have a white label NOC partner to help them,” said Surinder Brar, senior director, worldwide channel strategy for Cisco Systems. Brar expects about 80 per cent of Cisco Gold and Silver level partners to provide white label NOCs to the channel.

Russell Bolan, president of Dimension Data in Europe, said the growth opportunity today is in collaboration with other partners and he’ll be making his company‘s NOC available in a white label offering to the channel. “We’re in a global business and those relationships are important to our clients. They want the best fit solution and they want it at the best price. Some times you need to that other partner to make more margins,” he said.

According to Ovum Research, managed services is at $42 billion worldwide market opportunity growing 19 per cent annually.

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Paolo Del Nibletto
Paolo Del Nibletto
Former editor of Computer Dealer News, covering Canada's IT channel community.

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