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August 31: D-Day for Cisco direct-to-partner model

August 31: D-Day for Cisco direct-to-partner model

Kip Cole, Cisco Systems' director of channel operations A/NZ, has confirmed what many understood to be the worst-kept secret in Cisco's channel: August 31 has been set as the date for the removal of fulfilment support for Cisco's distributors, Tech Pacific, LAN Systems and Express Data.

What this means to the channel is that from September 1 this year, Gold, Silver and Global partners under contract with Cisco will have the opportunity to negotiate and source product directly from the vendor, as opposed to going through one of Cisco's distributors.

Initially it was understood that the direct-to-partner model would only apply to Cisco's Gold partners in a bid to bring Cisco's Australian channel in line with the vendor's indirect strategy elsewhere in the world. However, Cole confirmed Cisco's two Australian Silver partners, Volante and CDM Australia, would also be eligible to buy direct.

"Removal of fulfilment support means that resellers under contract with Cisco -- Gold, Silver and Global partners -- have the right, not the obligation to buy direct from Cisco," Cole said.

Despite the option of buying direct from Cisco, Cole said he expects most eligible partners to continue buying through Cisco's distributors because of the value they bring. "It isn't right that a customer can buy a product in six minutes or six months [for the same price]," said Cole. "There is value in distribution."

Until August 31, Cisco will continue to support its distributors in fulfilment to these partners, in that partners will pay the same price for a product regardless of whether that product is sourced directly by Cisco or supplied through one of its distributors.

The move will also pave the way for a shake-up of Cisco's second tier -- Premier Certified Partner or System Integrator -- resellers. Working with the distributors, Cisco wants to identify where it can drive growth in three main areas: geographic coverage, technology coverage, and industry or vertical market coverage, Cole said.

Any changes to occur in Cisco's second-tier distribution line-up will be decided upon by July 31.

Cole would not be drawn on how much Gold, Silver or Global partners contribute to Cisco's indirect revenues. "It's a material percentage, it changes," he said.

The announcement was made at a Sydney hotel earlier today, where Cisco was hosting the Sydney leg of its nationwide Security Road Show.


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