PARTNER CHANNEL: Cisco Launches New Partner Initiatives

Posted: 6/2003

Cisco Launches New Partner Initiatives

By Tara Seals

Cisco Systems Inc. laid out a new channel strategy at its annual Partner Summit, April 15-16 in Las Vegas, unveiling initiatives to boost partner profitability. A new partner portal, eAgent pricing, financing, SMB products and support options framed the networking company's new mantra of helping "channel partners build sustainable business models, driving increased productivity, profitability and return-on-investment."

"Channel partner success is my No. 1 concern. With more than 90 percent of our business flowing through the channel, we are committed to their success," says Paul Mountford, vice president of worldwide channels. "At last year's Partner Summit we made some fundamental changes to our engagement philosophy and now we are launching the programs and initiatives that build on that foundation."

Those changes included a shift towards something Cisco CEO John Chambers calls the "Networked Virtual Organization" -- any group of vendors, customers, partners, supply-chain members and peers linked by a completely transparent IT infrastructure, with applications, hardware and operating protocols standardized throughout. "This will be as revolutionary as the assembly line was to manufacturing," Chambers said at the Summit. "You have to evolve the technology and the underlying business processes."

The path to that future for partners, Chambers says, is to emphasize how technology can work for business. The high-value, service-oriented, application-oriented sale can boost partner profitability, while a focus on "selling boxes," the fulfillment of commodity hardware, is a losing path, he says. "The No. 1 decision criteria is service and support," said Chambers. "Not price."

The Summit's focus on partner profitability tied together a flurry of launches, including a channel partner productivity portal, Cisco Partner View. The portal offers channel partners a personalized Web interface that brings together once-disparate channel tools, applications and content, including business planning, customer satisfaction, certification and specialization status, channel announcements and e-learning options. The information is updated in real time and offers details on partner companies' certifications, specialization status, applications in progress and a summary of the partner's certified individuals.

Approximately 50 partner companies have been developing and testing Cisco Partner View for about a year. Cisco Gold and Silver Certified partners began accessing the new portal in May, while Premier Certified partners will gain access in August. The launch dates are three months ahead of schedule.

Cisco also announced its commission-based eAgent program would be generally available, meaning that the 100 channel partners currently enrolled in the program no longer will be charged an administrative fee for using it.

New financing solutions, such net 60 payment terms to end customers, were rolled out along with long-term leasing options for IP communications, bundled services and demo lab equipment. Cisco also is offering short-term leasing options, through third-party finance or leasing partners, including distribution, accounts receivable financing and accounts receivable purchase. The company says the demo/lab option can save some partners up to 40 percent a year.

To help channel partners penetrate the SMB market, Cisco announced the "Growing with Technology Solutions," modular product lines with the latest technologies and intelligent features, including core network foundation (routing and switching), security, IP communications and mobility.

Finally, Cisco unveiled the ROIC (return-on-invested-capital) business success metric to quantify sustainable success by measuring the return on investment for its channel partners based on productivity tools, training, programs and other initiatives. Cisco says channel partners can use the ROIC formula to select the initiatives that will have the maximum benefit on their financial success. Meanwhile, Cisco can use this model to evaluate the financial health of channel partners and make recommendations to what actions will have the most significant ROIC impact.

"Service and support are the prime space to be," said Wim Elfrink, senior vice president for consumer advocacy at Cisco, during a Partner Summit press conference. "Our model is based on empowering our partners.

"It's a philosophy, not just a snapshot," he added. "It's a deep belief in mixing skills and expertise with partners, making sure partners are doing what they do best-while taking the costs out on both sides. It's not a game of giving discounts, it's about being more efficient."