According to Cisco, its channel partner program is constantly in a state of change. While Cisco as a company relies upon both its channel partners and its direct sales force to generate revenue, it is in the channel that Cisco appears to have been focusing the bulk of its resources.
The latest round of changes are intended to provide better support to partners, while clearing up some of the possible areas of past conflict. This has meant strengthening its service offering across its partner programs, of which Cisco has three. First is the Enterprise channel model, designed to suit systems integrators and large-scale VARs. Second is a standard VAR model, catering to mid-tier resellers, and third a volume distribution model called Cisco Pro.
These programs have been in place for several months now, and according to Cisco's national channel manager Peter Papaioannou they are constantly strengthened, especially in the area of service offerings. Since his appointment a year ago the partner staff has grown from five to nine - a factor he says is also indicative of Cisco's commitment to the channel.
The Cisco partner model is designed to enable resellers to choose where their business is and slot themselves into a program, he says. "We started initially having one model to fit all, but our partners had a different business. So we think with the way we've got it scaled at the moment resellers can actually plug themselves into the various levels."
Central to the channel structure is the need to make sure that partners have the capability to provide systems that work, he added. "Because we're goaled on the satisfaction of our customers, it's very important to ensure that they are satisfied."
The revamped certification model has two levels, Gold and Silver, replacing the previous rankings system. Cisco has a number of Gold partners who work globally, and will be appointing between 10 and 12 locally within the next year. A company's ranking depends upon its ability to meet Cisco's criteria for competence, but it is expected that most of the older Gold Plus companies will move into the new Gold category.
Papaioannou says another significant change is the worldwide standardisation of the channel program. This includes a global pricing and discount model, to discourage customers from buying outside their geographic region. Cisco has also developed a standard contract template and conditions, referring to international laws rather than just US law. He adds that the program is still flexible enough to allow for local conditions. "But more importantly the overall model - the way they get information and service from Cisco, the way the discount is made up - is the same for all partners."
Cisco has also created the Cisco Partner Program Guide for partners that have com- pleted and signed the standard worldwide contract. This provides a guide to Cisco's sales, marketing, training and service programs, as well as information on Cisco's channel strategy, business practices, and partnership expectations.
Further to this is the introduction of structured sales training for business partners, from introductory through to executive level. Papaioannou says these sessions are attended by Cisco's own sales people, to explain how Cisco views the bid process. "Partners are going to come out with a clear understanding of not only the sales methodology, but of how Cisco views that sales methodology and uses that to sell at the IT director level and above."
While Cisco has been busy in redefining its channel structure, it has also been active in revamping it's overall service offering to its partners. Two months ago it appointed Nancy Lon as Global Service Manager to oversee the Australian arm of the Customer Advocacy division, which now has 1,000 employees worldwide.
Lon says these services support Cisco's traditional model of self maintenance. "We provide the backbone to give partners the tools to onsell to their customers. We want the end-user to be completely supported from the day they chose to roll out a Cisco network all the way through the life cycle of Cisco products. The most successful way of doing that is through our partners."
Lon said that with many larger IT users downsizing their IS departments these services are becoming more and more crucial. "A lot of these companies don't see this as their core business. What they need is the partner organisations, like our major partners such as Datacraft and Cray and so forth, to actually deliver that. What we do is we back up the partner by giving them the ability to onsell the hardware, the software, the Cisco Connection Online service - basically all the services we can offer to them to support the customers."
Lon says this is being supplemented by the Asia Pacific assistance centre which has grown staffing levels and the corresponding depth of expertise, going from two people two years ago to 30 today. "So not only are we deepening the specialisation in areas such as LAN and workgroup coverage, we're bringing in specialists who will look after some of the major accounts, and will help give that higher-level backup to the partners themselves.
"Cisco is very much committed to backing up the partners to sell services with every hardware deal, and making sure they have all the infrastructure in place so that they can go out and be a successful service organisation. And there are some tremendous opportunities for the partners to add value where no other organisations are in a position to do so."
The volume market
Since its launch in December last year Cisco Pro is now maturing as the volume division of Cisco product range. According to recently appointed distribution sales manager Liz Lawson, it is a chance for Cisco to penetrate new and emerging markets. "What we're doing is really taking Cisco's products and understanding and training down into the next level of reseller, where Cisco hasn't really had exposure before."
To achieve this Cisco has appointed two distributors - Tech Pacific initially and LAN Systems more recently. Lawson says Tech Pacific was chosen for volume distribution while LAN Systems will provide a higher level of value add. "With LAN systems they are a smaller operation, so they can give some hand-holding to those resellers that want that extra support."
These distributors will carry a number of plug-and-play-type products, such as switches, routers and ISDN products aimed at the SOHO market. Lawson believes much of this new market is being driven by the Internet. "That gives us a lot more resellers that are going to become interested in selling these products, and will want training and to bring their level of expertise up.
"It's not like selling a PC or installing a network operating system - it gives them that next level of understanding. That gives them greater revenue opportunity, and for the smaller reseller it could be a great area to get into."
Within this program are two levels of Authorised or Premium reseller, Lawson said. "A Premium reseller has access to all products, and we do ask that they do the support training, because that gives them the tools to be able to service their customers."
Lawson says the response has been tremendous. While details on training commitments are yet to be finalised, Lawson believes they will not be excessive. "The training commitment we make to our partners is consistent through all parts of our program, and we think it's very important that our partners have the technical readiness, because we don't want our box to fail in front of a customer." She says the training component is the area where resellers will be able to differentiate themselves from their competition.