If green technology practices are to be adopted, the channel has a vital role to play in educating the market. What is Cisco doing to get that message through its channel community?
Andrew Sage, Cisco (AS): A couple of months ago we formed our Global Channels Green Council, which has two members from Dimension Data Australia [CTO, Gerard Florian and COO, Ken Westwood] and I believe another from IBM Australia. The passion the Australian partners have for this is fantastic. Cisco has a very strong green story in three categories - our green datacentre has a lot of legs and partners play a huge role there; for green business operations broadly, IT infrastructure produces 2 per cent of carbon emissions for a regular business, but how do you use that 2 per cent to impact on the 98 per cent as opposed to focusing solely on the 2 per cent? Things like TelePresence, telecommuting, and policies around working at home combine to create a great story around using the 2 per cent to drive the rest of the business; the third area is that we have a very robust e-waste story at Cisco. We have a strong position on recycling and the proper disposal of equipment with a system where we pay not only our customers but also our partners when they trade equipment in. We get an upgrade, the customer gets extra discount and the partner makes a little extra money.
So what are Cisco's policies around e-waste? How do you dispose of obsolete equipment?
AS: In terms of policies I'm not sure there's anything I can share, at least from a channel and sales standpoint, but in terms of practices we bring in 400,000 units a year that don't make it to waste sites because they are remarketed. That makes a big difference because they end up in labs or in our networking academies. It's not half or even 10 per cent of the amount that ships around but it's definitely a good start.
There are always leaders who see opportunity and, in this case, show some social responsibility but I would argue a large majority of partners are still sceptical when it comes to the green issue.
AS: To be frank, we won't have a successful and pervasive strategy unless it makes business sense. But if it makes business sense for a channel partner that probably means it makes sense for a customer. There will be legislative requirements, but there aren't very many right now and it isn't perfectly clear what that environment is going to look like. Environmental responsibility is a factor but we don't see companies making uneconomic decisions. They won't pay twice as much because a company has a green proposition, but if the price is close, and certainly if it's the same, the company with a green story to tell is going to win the day. In some scenarios, such as the datacentre, green can be the clear economic winner because of the reduction in power costs. There are so many opportunities like that out there. We are packaging these stories up for channel partners and helping them tell them to their customers. We are launching a Green Circle on our partner web-site, where any partner can go to get information on how to present Cisco to a customer from a green perspective to deliver economic impact. Partners can be a strategic advantage for Cisco in terms of our green strategy, which is about environmental responsibility but also growth of profi tability. The pragmatic partner operating on relatively slim product and service margins will struggle to do anything for purely philanthropic reasons but, if they can make a buck doing it and have an impact at the same time, they will gravitate towards it like crazy.
We've been hearing a lot of talk about managed services for a little while now but progress in moving the channel to that model has been slow. What are you doing to drive it?
AS: We have 30 partners in a Managed Services Channel Program (MSCP) and it's growing. Telstra, for example, has a great managed services business and if it isn't in the program then it should be. We're trying to match the policies and practices for working with us to the business model on the channel side. If you're a resale partner then you buy from us and we only allow you to resell in geographies where you've made an investment. We don't want somebody from Australia shipping stuff off to the US and you certainly don't want somebody from the US shipping into Sydney. The resale program didn't work for managed services providers because they often hold title to the equipment instead of reselling it and we didn't know what to do with them. The incentives we put in place for the resale partners didn't apply to the managed services partners. The branding in the retail side had nothing to do with the level of service that the provider was giving and the fact that you were restricted in the resale program didn't make sense in the managed services program. If you have a strong network operations centre, you can manage devices and networks all over the world. If you've developed a managed service, you should be able to ship a node into London or New York and manage it from Sydney. We changed all of our systems and processes to match up with that business model and then created some new brands that recognise the sophistication of the service.