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EXCLUSIVE: Cisco drills down into services play

EXCLUSIVE: Cisco drills down into services play

"This is the perfect time to revisit our current business model" - Cisco's Bo Kwang Suh

Partners need to aggressively change business models in order to adopt a services–led sales approach, said Cisco Services Asia vice-president, Bo Kwang Suh, during his keynote speech at the Partner-Led event in Bangkok, Thailand.

“Our business model that is working today may not survive in the next three to five years – I believe this is the perfect time to revisit our current business model,” Suh said.

Key mega trends in the ICT market are driving the shift to services including mobility and the cloud. The growing interest in cloud services and managed services, the rise of rapid consumer product and a rapid erosion of product commodity are other top business drivers.

As such, he offered advice and guidance on how to grow business through services and how to differentiate from the competition around smart solutions and smart services.

While he said statistics show up to 40 per cent of partner revenues come from services and up to 60 per cent of partner profit comes from services, many partners are still struggling with the transformative shift.

“Today is the journey to transform to this direction. We are all on the journey for this. This is going to be the future.”

He said Cisco has been busy revamping and fine-tuning its services strategy in order to help partners take the necessary step towards a services-led business.

Earlier this year, Cisco consolidated 50 services programs under the Cisco Services Partner Program (CSPP), which has already been well received by the APJC partner community. He said 7100 partners have already enrolled in A/NZ, Asia and India. “The last two remaining theaters are Greater China and Japan, which are coming at the end of Q3 2013.”

Highlighting partner enablement, he said 500 partners have already qualified for rebates. Cisco has paid $17 million rebates – a number that is expected to exceed $100 million in 2014.

Market moves

In taking the services journey, Suh said there are big opportunities in the areas of planning, design, implementation, integration, along with maintenance and optimisation.

“We are making money around implementation and maintenance and we call this the golden egg. But do we think this golden egg will continue to grow or will it stay there? Probably not, given the megatrends, growing competition and economic moves. We believe the eggs are going to break and become much smaller and the money where the customers used to spend in the middle of the egg will shift left and right.” Customers will now spend more money on consultative sales which includes design and consultation, along with optimisation services.

He said partners can start to make moves in the market with the smart solutions and smart services portfolio. “This is a great opportunity to rethink and position ourselves today,” he said, highlighting the services market opportunity in APJC is $30 billion.

He said Cisco has been fine-tuning the services play with innovation around smart services and a revamped strategy. “We have been hearing from the partners for the past few years, asking for a clear and consistent go-to-market strategy, which we have announced in the last two years. On top of that, around the service part we have certain rules of engagement.”

Eyeing the commercial space, he said partners can take to market the SmartCare Services, which helps a customer address network operational challenges. The SmartCare Services have three key capabilities including install base management; alarm reporting; and device-level diagnostics.

Suh also highlighted the power of Cisco’s CPS (collaborative professional services, which total around 300 service menus). The training resources for partners comes in the area of assessment services (network audits and health checks), guidance services (a review of partner design documents) and development services (network infrastructure, wireless and security information).

Suh said partners should take advantage of all support and guidance available to them as partners shift business models. “I am confident you will grow with services, you will make more money with services and you will differentiate yourself very dominantly against the alternative.”

Jennifer O'Brien attended the Cisco Partner-Led Event in Bangkok courtesy of Cisco

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