Cisco aims to ease channel costs with new initiatives

Cisco aims to ease channel costs with new initiatives

Channels chief says partners need to focus on financial management and building business with existing customers to survive the financial storm

Cisco has introduced short-term cost-saving initiatives for channel partners in an effort to ease pressures resulting from the financial downturn.

The vendor has waived the costly annual audit process for Master, Gold and Silver accredited partners with “good standing” for one year, as well as dropped its demo equipment requirement. It is also encouraging partners to upgrade existing customer equipment by providing paid assessments.

“There’s a lot of stock in the world that’s over five years old – that’s a big opportunity for partners to leverage,” senior vice-president of worldwide channels go-to-market, Edison Peres, said at Cisco’s recent Cisco Channel Exchange event in Lisbon, Portugal. He also flagged managed services as a way to address rising customer demand for IT solutions based on operational, rather than capital, expenditure.

“Managed services is also growing by 28 to 29 per cent, which is double that of the CPE side. We’re trying to help partners to identify solutions and help them come up with the blueprint,” Edison said.

Cisco is also expanding credit options for both partners and their customers through Cisco Capital and encouraging more to take-up the financing available.

“About 50 per cent of business is done through Cisco Capital… there’s no reason why 60 or 70 per cent of partners couldn’t use Cisco financing,” Peres said. “We have an extensive toolkit that’s not being utilised, such as Cisco Capital. Many didn’t need it before, but it’s a great tool for now.”

Edison labelled the current financial situation “unprecedented” and said the vendor was trying to be proactive to help partners ride out the storm. Among his key strategies for partners were focusing on financial management, as well as looking for more opportunity out of existing customer bases.

“We are going through very uncertain economic times,” he said. “Partners are talking to us about the pressure on profits, but also the cash flow issue, which is a bigger concern. Tightening credit is an issue for partners, but also the end users who need to be stimulated to buy something.”

But although times were undeniably tough, Edison said it was important not to lose sight of future development. For Cisco, this means partner collaboration and making the most of Web 2.0 technologies.

“It’s not the strategy that’s wrong – it’s the environment around us. We have to stay focused on the future,” Edison said.

- Nadia Cameron travelled to Lisbon as a guest of Cisco.

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