Cisco makes partner profitability pledge, acts on channel feedback
- 05 November, 2019 06:00
Oliver Tuszik (Cisco)
Cisco has identified partner profitability as a leading priority in the business following an overhaul of back-end processes in response to channel feedback.
The seemingly humdrum declaration - delivered in front of 3200 providers at Cisco Partner Summit in Las Vegas - prioritises engagement and operations over headline statements and soundbites, billed as the foundational layer required to drive future partner success.
Central to such ambitions is a multi-year project designed to revamp internal procedures at the technology giant, in addition to improving training enablement and protecting partner investments throughout the customer lifecycle.
“One of the biggest pieces of feedback we received from partners was around improving daily engagements,” acknowledged Oliver Tuszik, senior vice president of global partner organisation, Cisco. “Yes, we had far too many portals, processes and tools for partners to use.
“This doesn’t sound sexy but for partners, improving daily productivity is where the money is at. If a partner has to spend two weeks to get an order processed and access pricing structures, it’s a waste of time.
“Are we perfect in fixing this? No, but we’ve set up a three-year project to streamline operations and create one partner experience that is agile and digitalised.”
To enhance operational simplification, Tuszik said the vendor has reduced the tools and platforms on offer to partners by 24 per cent during the past 12 months, in addition to ensuring enterprise agreement (EA) proposals are turned around within one day, rather than a week.
“We’re working hard to further improve these figures,” he added. “The same goes for renewals and customer success which is a complex undertaking pulling together all of the information required. This usually requires the creation of 14 reports but we are bringing that number down to one single report to increase partner productivity.”
Specific to technology, Cisco reported 200 per cent year-on-year growth in SD-WAN adoption through the channel, alongside doubling hyper-converged market growth. Meanwhile Meraki - leveraging a 100 per cent channel model - accounted for the fastest growing product line with cloud managed smart cameras representing a $100 million market through partners.
“Partners hear us talking about innovation at every event, but it can be difficult to keep up with fast moving technology,” said Tuszik, in reference to Cisco Black Belt Academy, an initiative first launched in Asia Pacific.
The framework was built to help sales and engineers from partners understand how Cisco “stacks up” against competitive vendor offerings, delivered through a virtual environment.
“This is an online model-based training program which is free to use for partners and is now available across the world,” Tuszik explained.
Tuszik - in housing responsibility for more than 60,000 partners globally - also reinforced the vendor’s commitment to clamping down on counterfeit products delivered through providers “which don’t play by the rules”.
“Partners know this kind of deal,” he said. “This happened to me while I was running a system integrator. You work with the customer to create value which is 100 per cent aligned to the Cisco team.
“All parties are happy and then on the last mile, you receive a call from the sourcing department, which is what happened to me. The person at the other end of the phone says, ‘Hello Mr Tuszik, we love your offer and you have all the approvals but there’s a partner that can offer all of these Cisco products 20 per cent cheaper’.
“So I firstly called my Cisco representative to ask why they gave much better discount despite us both being in alignment. Cisco had never heard of the company and after digging deeper, we find out that this company isn’t playing by the rules.”
According to Tuszik - referencing his tenure as CEO of Computacenter in Germany, one of Cisco's largest partners - 0.01 per cent of partners exist in grey markets, offering counterfeit products to undercut the channel.
“These kind of companies can destroy partner profits,” he warned. “We take this very seriously. I lost a large amount of money on this deal and we’re going out to market to protect our partners.
“We know 99.99 per cent of our partners play by the rules, they fight hard and compete fairly. But we will go after those partners that don’t. My deal was saved by the brand protection team in Cisco so if partners encounter this, contact us and we can protect your investments.”
With stock-standard partner changes underway, Tuszik highlighted how partners continue to evolve through the Cisco portfolio of solutions, evident through the emergence of more than 150 authorised Internet of Things (IoT) partners during the past year.
Through IoT, specialised partners reported 18 per cent higher growth rates compared to competitors, as well as 212 per cent growth in usage of IoT DevNet Zone.
More broadly speaking, 67 per cent of partners deployed a recurring revenue model sales model in 2018, while 43 per cent started a Cisco customer success practice and 31 per cent increased services adoption worldwide.
“I’m seeing all partners change,” added Tuszik, during an one-on-one interview with Channel Asia. “They are changing because of different demand or because they can’t make money through their existing business model.
“Today, we’re moving in a direction in which the big players are moving also but also the small providers and the new guys. This isn’t a stable trend, it’s based on customer demand.”
According to Tuszik, the Cisco ecosystem can be defined by four partner types, the first offering global coverage and expertise in SD-WAN and multi-cloud technologies.
Secondly, partners housing mid-market, collaboration and contact centres expertise. Thirdly, those with specialised industry offerings, in addition to managed services capabilities. The fourth and final partner type focuses on adoption and renewals.
“We leave space for our partners,” Tuszik added. “We’re not bundling everything and telling partners to take the solution, sell it and forward an invoice afterwards. We want them to add value because if they add value, they’re not only delivering short-term gains but creating long-term stickiness and margin."
But Tuszik was quick to stress that differentiation will not be decided by Cisco, placing the onus on partners to evolve on an individual basis.
“We don’t define uniqueness, partners define it,” he qualified. “Partners have to define this because they see the gap between our solution and the customer demand. In some areas this might just be technology, or perhaps services, vertical expertise or local coverage.
“The perfect Cisco partner is a partner which is focused on customer success and delivers value to that customer on top of our products.”
James Henderson attended Cisco Partner Summit 2019 in Las Vegas as a guest of Cisco