HONOLULU — Paul Mountford, vice-president of worldwide channels for Cisco Systems, strutted out onto the Partner Summit stage to the tune of AC/DC’s “”Back in Black”” as a way of emphasizing the company’s channel strategy of increased reseller profitability.
In a six- to nine-month timeframe,
Mountford said Cisco will release an Opportunity Incentive Program (OIP), a Solution Incentive Program (SIP) and an upgraded Value Incentive Program (VIP). OIP will be a deal registration program for certified partners only to help them grow business in advanced technologies such as IP telephony.
“”The cost of sales is higher to get new business than to maintain existing business. We all know that. I hear a lot of people say ‘We like new opportunities, but (it is hard to continue chasing new opportunities) when we create a value proposition for a customer and then someone drops in a high discounted deal taking the deal away,”” he said.
The OIP is expected to stop this practice by enabling the partner to receive the discount, which is between three to eight per cent on average, as soon as the deal is registered.
Steve Simmons, Cisco Canada’s channel manager, sees it between five and eight per cent on average in Canada.
“”The commercial market has grown and a lot of partners have penetrated it and need more protection in the sales cycle,”” Simmons said.
Mountford cautioned that all deals have to be qualified as new opportunities and partners will not be able to simply register “”a laundry list”” of deals.
For VIP, Cisco will be increasing rebates out on advanced technology with flexible enrolment. For example, the payout will double on IP communications to 20 from 10 per cent. The amount of surveys for these solution rollouts will be capped at 25. A two per cent growth rebate will also be added on a six-month period.
“”If that does not help you sell IP solutions, nothing will,”” Mountford added.
The SIP plan is still under development, Mountford said, and will try to help partners to adopt intelligent information networks and services.
Dave Walsh, vice-president of marketing for Ingram Micro Canada, said Cisco continues to do a good job of aligning and segmenting its channel.
“”This is an evolution of the company’s approach that can be used in a lot of other industries. The partners have to be rewarded for entering into uncharted territories,”” he said.
Ingram Canada is Cisco’s largest distribution partner, Walsh said. “”Ingram’s go to market approach this year is to be more of a value market maker to the channel. Cisco’s strategy lines up perfect.””
Meanwhile, Cisco continued to whittle down its number of certified channel partners from 6,600 to 3,000 worldwide in the last year.
As of last year, Ingram Micro Canada’s base of Cisco premium partners has decreased at the same rate, from 125 down to 60. Walsh said that doesn’t concern him, because he said it makes sense to align the new opportunities to partners who have committed the resources.
“”It helps Cisco maintain partner profitability. If they do not do this and open it up for all partners to get the business (it impedes) them from maintaining the commitment towards profitability,”” he said.
Dan McLean, networking analyst at IDC Canada, said Cisco’s partner program last year set a standard in the networking industry.
“”I find the new incentive program to be an unconventional approach. It’s not just about volume for Cisco,”” he said. “”They want partners to step up in emerging technologies. Cisco drives new technology in the market and it is the partner’s time to adopt them.””
