Cisco to strengthen distribution focus

Cisco to strengthen distribution focus

When Gary Jackson left Sybase to take on the chief role at Cisco Systems Australia* he knew he was going to face a number of challenges. The world's largest networking company it may be, but Cisco's Australian operation was due to fall short of its aggressive revenue targets. It also had a channel that to many minds was both confused and, in some places, hostile towards its vendor.

"When I came in, my view was that the primary thing that could be improved was the channel relationship," said Jackson, "both in terms of consistency and in terms of who we focus on. So there has been quite a bit of work in saying 'how do we get those relationships straight?'"That work has involved clearing up ambiguities within Cisco's channel. "I think the first thing the channel wants is consistency," said Jackson. "Why do relationships break down? Very often they break down because of mistrust and inconsistency, so that the rules of yesterday are not the rules of today."

Special treatment

To beat that inconsistency, Jackson says he has levelled the playing field for Cisco's partners. Cisco itself has been burnt in the past through inconsistencies with its partner dealings.

For instance, at the time of Com Tech's move from distribution into integration many rival integrators felt that it was receiving special discounts from Cisco as a sweetener for selling its products. Jackson says he can now assure all partners that no-one is being given special favour.

"I haven't dodged the issue with any of the partners that there were inconsistencies, or that on some occasions somebody might have been given a special discount consideration - that would be silly," said Jackson.

"My view is that if you're a Cisco Gold partner you're on the same deal as the other Gold partners. If you're a Silver partner you're on the same deal as the other Silver partners. And that is absolutely the case."

Jackson says the only differentiator that may separate partners is discount due to sales volume - a differentiator that he says will be known to all. "If there are any special initiatives on a particular situation it's available to all of the partners that are in that field, and not to one exclusively," he said. Whether the channel accepts this will emerge over time.

"My view is that you serve your sentence for a lot longer than you were ever guilty. We're just going to need to have people feel comfortable that we are what we say we are. I believe that we've put things in place to do that, and obviously our partners are going to want to see that over a period of time."

Cisco partners can expect to see greater emphasis on distribution, says Jackson. He says Cisco has a number of initiatives planned for this year, including four or five specific product promotional initiatives before Cisco's financial year closes in July. These will incorporate promotional marketing and advertising along with lead generation.

"I want to walk out of this quarter with a much more significant run rate of business with the distributors," said Jackson. "Our resellers will see that there is a lot more activity, so they won't feel so potentially separated from us. It will be a very key part of business moving into the new financial year."

Jackson says Cisco's marketing and channels area will receive greater resources, which ties in with Cisco's move to decrease the number of business partners with which it deals directly. He also feels that there is potential within Cisco's three distributors (LAN Systems, Express Data and Tech Pacific) for greater business.

Jackson is adamant that placing an emphasis on distribution is something Cisco must do. "As our product base continues to broaden at the low end and at the high end, we are going to need a much better percentage of the channel business.

There's a whole raft of smaller resellers that are dealing in the small to medium market, which is the basis of Australian business, and we need to make sure that their first thought is Cisco, and not anybody else."

As well as continuing the technically oriented Networkers' conference, Jackson says Cisco will focus more on channels information delivery with resellers, such as roadshows.

Another area that will grow in prominence is Cisco's branding in the end-user community, especially the small business marketplace. Here Jackson says it is important to not only educate people on what Cisco is, but also on how networking benefits a business, and how Cisco can play a role in creating that benefit. "We are going to commit some pretty serious dollars to education," said Jackson.

"We've got the ability in the next 18 months to say to the wider community this is who we are and this is what we do, in a very general business sense as opposed to a technical sense. I think we've got to take that initiative, not sit and wait for the distributors to do it, because it's our responsibility to try and drive that.

"My view is we drive the product awareness and information delivery and strategic view of Cisco, what it is and where it's going. Our network integration partners deliver the services and the products and the customer gets value from both of those organisations.

So I want to have a well balanced direct/indirect model that is definitely giving a much better percentage next year of the channel business, while still protecting my direct business."

*Jackson took over from managing director Scott Ferguson in January 1997. Ferguson is now working with Cisco to develop its Asian channels.

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