Cisco revamps services channel programs

Cisco revamps services channel programs

Networking giant announces improved managed services partner program as well as new financing and rebate offerings

Cisco has revamped its managed services program and launched new financing and rebate offerings as part of efforts to better support global partners.

Speaking at the Cisco partner Summit in Boston, senior vice-president of worldwide channels, Keith Goodwin, positioned services as the major area of growth for partner profitability, along with customer opportunity.

The vendor has aligned its services program into three areas: Outsourcing, Managed Services and Resale. Goodwin said the overall structure, incentives and rebates will be consistent with Cisco’s traditional product-based partner programs. The aim was to make it easier for partners to be rewarded around services, as well as to reassure them that Cisco would not compete for services dollars, he said.

“Partners continue to be our primary route to market for services,” Goodwin said. “We want to reward partners for services they need to drive their top and bottom line.”

Cisco is also overhauling its managed services program. Next Generation is aimed at lowering the barrier to entries and assisting partners to capitalise on the booming on-demand services space. Under the new program, partners will no longer be required to have their own network operations centre, nor will they have to submit an equipment bill prior to sale. Cisco has also extended managed services rebates across its full product portfolio.

Partners and the discount structure will be split into three tiers. At the top or Master level, managed services providers will be required to have a NOC, as well as customer references, certified staff and certain process. At the lower end, Cisco is hoping partners will work in collaboration with top-tier providers to white-label their services to customers.

Goodwin said 80 per cent of global partners had some form of managed services offering, but less than 10 per cent had been using its managed services channel program. Key complaints included a difficulty to transact and make money.

“Managed services are a great growth opportunity and a chance for us to make money together,” he told partners at the event. Goodwin estimated managed services was experiencing 20 per cent year-on-year growth and represented $US42 billion in potential revenue. The new managed services program commences on August 31. Cisco is hoping thousands of partners will sign up.

The services program changes were among a raft of incentives and program tweaks announced by Cisco at its 2009 Partner Summit. Goodwin also revealed plans to its extend channel financing terms from 60 to 90 days, and said it will open up access to a broader partner set globally.

Other schemes include a channel bookings neutrality initiative across sales teams so they are rewarded regardless of whether the customer deal is booked directly through a partner, or via distribution. Under the relaunched VIP (Value Incentive Program), Cisco will also move away from providing rebates on advanced technologies, such as datacentre and unified communications, and onto its three newly defined architectural focus areas: Borderless networks, Datacentre and Virtualisation and Collaboration. This will ensure partners get rebates on both emerging products and traditional products not previously encompassed within VIP, Goodwin said.

The financial incentives were all about ensuring partners not only navigated the economic storm, but prepared for long-term success, he said.

“It’s been a tough year and we have never appreciated you more,” Goodwin told partners.

- Nadia Cameron travelled to Cisco Partner Summit as a guest of Cisco.

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