IT as a service requires a new channel approach

San Jose, Calif. — As the role of the CIO within the organization evolves, so does the support the CIO needs from IT vendors and channel partners.

In an interview at Cisco Systems’ C-Scape press and analyst conference Karl Meulema, vice-president, global strategy and operations for Cisco Services, said he sees the overall IT world changing dramatically, adding the vendor and channel community needs to keep pace.

“The CIO of the future is becoming a service provider to customers within his company, and as a service provider that CIO is more held to service level agreements (SLAs),” said Meulema. “His customers are expecting more reliable, predictable services, which means the CIO is looking more closely at his supporting cast — vendors and partners — to make him successful meeting those SLAs.”

It’s that vision of the new world of IT that has been driving Cisco’s recent development in the services space, said Meulema.

At its partner conference in the spring Cisco launched Smart Care services, which gives Cisco and the partner visibility into customer networks. The vendor monitors the network and gathers performance data, which Cisco benchmarks against best practice standards to identify potential issues in areas such as network security, availability and traffic evolution.

“We take all of that information and feed it back to the customer in a relatively simplistic stop light view, but we also feed it back to the partner who gets detailed information around what that means,” said Meulema. This allows the partner to work with their client to address the issues, and can be a lead-in to additional sales and revenue opportunities by developing a trusted partner relationship.

The program is Cisco-centric and is focused on Cisco equipment, said Meulema, noting Cisco doesn’t have the performance benchmark data on other vendors’ products that adds the value to the Smart Care program.

“And even if we had the information I’m not sure we want to make their products more manageable,” he says. “That’s their problem to solve.”

Smart Care is only available from Cisco’s partner channel and can’t be bought direct from the vendor, which Meulema said is a first for Cisco and, with no manufactures’ suggested retail price as a reference point for clients, allows for partners to create a unique offer packaged around Smart Care with their own added value-added services as a sweetener.

“The general feedback from partners is that helps them dramatically in their profitability,” said Meulema. “They can basically make the sky the limit.”

Cisco has also been busy in the managed services space, an area Meulema says the vendor is still building its play. The intent, he said, is to build a collaborative model around the recently launched Managed Services channel program, which programs like Smart Care revamped specifically for MSPs.

It’s a challenge though, he said, as there need to be a number of different models for the various types of MSPs, from managed access providers to managed solution providers all the way through to full-blown managed infrastructure providers. Each will require vary levels and kinds of support from Cisco.

While services is unlikely to ever become a business in itself as hardware is the key entry point to a services conversation, Meulema said services is fast becoming a very important part of a partner sale, particularly as the margins tend to be much higher on services than on hardware.

“Having a healthy mix between those two is important,” he said.

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Jeff Jedras
Jeff Jedras
A veteran technology and business journalist, Jeff Jedras began his career in technology journalism in the late 1990s, covering the booming (and later busting) Ottawa technology sector for Silicon Valley North and the Ottawa Business Journal, as well as everything from municipal politics to real estate. He later covered the technology scene in Vancouver before joining IT World Canada in Toronto in 2005, covering enterprise IT for ComputerWorld Canada. He would go on to cover the channel as an assistant editor with CDN. His writing has appeared in the Vancouver Sun, the Ottawa Citizen and a wide range of industry trade publications.

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