Cisco Systems has developed a new approach to channel partnering under the Solution Incentive Program (SIP) that will consist of an elaborate looking portal similar to MySpace or Second Life.
Called Industry Solutions Partner Network (ISPN), this program is intended to give SIP a shot in the arm. Solution providers were not submitting new solutions en masse to take advantage of the rich margins provided in the SIP program. With ISPN and the Cisco Partner Space virtual environment, channel partners can now tap into many independent software vendors (ISVs) and their solutions.
There are currently 30 ISVs on the Cisco Partner Space which operates as a virtual trade show in a Second Life-style online presentation. The Cisco Partner Space inside Cisco.com is scheduled to be available in October.
"The Second Life social networking site is for partners to set up booths similar to a trade show and provide information to other solution providers. The site details new programs and there is a lounge for partners to (securely) chat in. Partners can place video to introduce themselves to potential partners," said Andrew Sage, senior director of worldwide channel market development for Cisco Systems.
For the ISVs, ISPN provides them an opportunity to improve its routes to markets.
According to Derek Downs, president of Cistera Networks, a Dallas-based ISV, channel partners have many more routes to market than a software developer. Cistera produces advanced IP phone applications for the first response market.
"This is the case for us. Partners are critical to our business. They are the trusted advisors and it does not make sense for us to have a sales force," Down said, who has Canadian partnerships with Bell Business Solutions and Telus National Systems.
Bryan Tate, the founder, chairman and CEO of Digitel,a solution provider based in Atlanta,said ISPN and the Cisco Partner Space offers solution providers pre-qualified partners and he can see his company expanding beyond his local boundaries because of this program.
"ISPN provides us with the confidence to go to another partner. You still have to go through the period of getting to know each other.Cisco provides the audit so you know you are not dealing with a strange company," Tate said.
Sage added that he has found that partners who have a solution to offer gain 35 percent more margins on services and 20 percent higher gross margins overall. The deal size also increased by 35 percent and operating margins nominally rise to three percent just by partnering with an ISV.
However, do not expect a further margin bump for partners who do meet all the requirements of the ISPN program under SIP.
Tate believes there should be a margin increase because channel partners would still have to make an investment to qualify for ISPN.
"We think we can make an argument for a margin bump. We just have not asked for it, yet," Tate said.
Sage said one of the reasons for not offering extra margin is that partners would qualify for the rich margins available in SIP just by bringing an ISV solution into the program.
"This also allows us to market the industry's capabilities, which we have never done before and I think it will allow more partners to get into the SIP program," said Sage, a Canadian who developed the ISPN program.
He added that ISPN serves a different purpose than other more established partner networks such as Ingram Micro's Venture Tech Network and Tech Data's TechSelect. "The dog will wag the tail (with ISPN) by use of collaboration," he said.
Sage said Cisco is looking for industry relevant applications that are repeatable. These solutions will be validated by Cisco.
Training, sales and marketing tools will be provided in the enablement portion to build industry expertise and best practices.
Professional business planning, field marketing funds and a demand generation program will be the main staples of the engagement part of ISPN.
Finally, pre-qualified industry-specific applications that can deliver collaboration will receive the highest discount.
Currently there is no charge for ISVs to set up a virtual booth on the Cisco Partner Space. Sage said it will be free for the next 12 months.
ISPN is available to Cisco Certified partners only.
Other requirements for ISPN are to contact Cisco Channel Account Managers (CAM), have dedicated sales and marketing resources, identify pre-qualified applications, create a go to market plan, and develop a reference account.
Cisco piloted ISPN with 200 solution providers, but in the last few months paired it down to 30 partners in Canada and the U.S.