Cisco’s 2007 plans will depend on partners

SAN JOSE, Calif. – Cisco’s C-Scape conference, held here last month, was a changed beast from the analyst/media conference of past years. The company added outside sources to discussion panels, where previously it was all Cisco speakers, all the time.

Still, the highlight of the conference was a major direction change announced from the top.

Touting the idea of “the network as the platform,” chairman and CEO John Chambers laid out a vision of a technology world where the power of new all-purpose networks (voice, video, data and mobility) provides huge opportunities for the design of new applications.

Cisco’s high-definition face-to-face videoconference-type meeting tool, TelePresence, is one such application. The TelePresence products, Cisco TelePresence 3000, Cisco TelePresence 1000 and the Cisco TelePresence Manager, are already available in Canada through Cisco and IBM Canada, with more partners to come on board slowly.

To sell such applications as they come online, Cisco is encouraging channel partners to increase either the breadth or depth of their expertise in areas where Cisco plays: routing/switching, security, communications and wireless/mobility.

In the past, partners would gain certifications by specializing in areas of their choosing, says Andrew Sage, Cisco’s senior director of marketing for worldwide channels. But now if they want to be gold or master partners they must pass technology breadth requirements to meet their levels, plus get certifications for the life cycle services around all those technologies.

Or, in cases where customers are looking for a leading partner with a particular technology depth, a VAR can choose to become extremely skilled in one technology or application, differentiating itself from those partners with breadth.

The idea is to align incentives with investments, said Sage. If a VAR invests in a set of broad skills it will earn the top-level front-end discounts. Because of the breadth of skills, it will also get VIP benefits. Volume is not connected to any of the programs; they are based purely on value.

The additional kicker for master partners is that if they bring in and register a new deal, it counts as a new opportunity. It doesn’t have to be with a new customer, it just has to be a sale in an area that is new for that customer.

Michael O’Neil, managing director of London, Ont.’s Info-Tech Research Group, said Cisco’s core business is “arguably better described as a commodity business,” which would typically favour a volume incentive program. However, he admited the nature of the company’s product set is changing.

“Look at something like VoIP, where the current penetration is quite low but purchase intentions are pretty high. Roughly 10 per cent of the people [Info-Tech] just talked to are planning first-time VoIP implementations in the next 12 months,” he said.

“It’s huge growth opportunity. But with that kind of emerging technology, you need a fair amount of handholding and knowledge, and incenting the channel on knowledge rather than volume makes a lot of sense.”

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