Each week in ARN, we interview the local channel manager of some of the world’s most influential hardware and software vendors. This week, Cisco System’s channel man, Kip Cole, puts forth his two cents on growth opportunities and advanced technologies.
How did you come to be in charge of Cisco’s channel?
Kip Cole (KC): It seems I’ve been working with partners — Cisco’s and others before that — for a long time. It’s the first time I’ve been accountable specifically for the partner business. I think that’s fitting — I started out in the technical part of the industry, I’ve been in marketing, sales, R&D, product management and was country manager at another IT company before moving to Cisco.
Cisco has announced it’s trawling for fresh business. What is the company’s strategy?
KC: We’re driving much more vigorously into six advanced technologies which include telephony, storage networking, security, wireless and optical technologies as well as SOHO and consumer technologies including home networking (thanks to the Linksys acquisition).
We see each of these as being growth areas and we see them as good current opportunities. We’re not saying that’s it, we’re all done; we’re always looking for new technology growth areas and no doubt over time Cisco will announce other new technology areas that we’re going to invest in. But each of these is working for us.
Why is health expected to be big this year?
KC: Health is an enormously complex area that isn’t getting all of the benefits that it could from the deployment of technology. And it’s not the lack of passion by healthcare professionals of technologies, but rather government policy and medical systems and piracy that are really complex.
But we’re starting to see that clinical systems have a significant opportunity to improve productivity. This is not an overnight thing and Cisco doesn’t have all the answers by any means.
Where is the opportunity for storage networking?
KC: Outsourcing data centre consolidation is a key driver. The idea of server consolidation is pretty clear, but what happens with storage. Storage today is mostly connected to one system, one server, or it’s connected via a network-attached storage or via proprietary interfaces, limiting storage efficiency because there’s no consolidation: this server can’t see the disk and this one can’t see that one, and that’s not a good business outcome.
It also means that if you’re trying to get some improved security or disaster recovery you’ve got different networks. That creates opportunity for us and we’ve introduced a line of storage routers and switches that let enterprise customers to consolidate the management of the storage environment. With this I can get more efficient useage, better performance management, I can implement a better business recovery environment and I can use the IP backbone in my centralised administration and management.
Where do service providers fit into the equation?
KC: The industry economic outlook and customers’ buying behaviour have both changed. For example: in my look at the largest enterprises in Australia, there is a greater focus now on purchasing from service providers or outsourcers either product or as a managed service or as an outsourced or an out-task environment. That’s quite different to the circumstances five years ago.
That alone would suggest changes in some of the elements of how we view partnerships because it would mean some organisations that we previously didn’t have strong relationships with are now more important to us: Outsourcers are a good example. Another example would be where we’ve had a strong relationship: We’ve been in that customer/vendor relationship (like a Telstra, an Optus, or a Commindico), so today we focus on the multiple facets of those relationships.
Is Cisco going after the SMB space in the telephony arena?
KC: The early adopters have adopted it and now we’re moving into the mainstream — and SMB is part of that group. The greater availability of broadband at a reasonable price is becoming much clearer in these areas, so those customers are asking themselves: Why do we have a separate voice and data network? How come I can’t integrate my call centre applications? Why can’t I take advantage of the productivity applications such as enterprise messaging and voicemail? Why is it when I call my traditional voice supplier that it’s a $150 service call to do nothing except configure a bit of software.
All of those things are coming together to mean that awareness of a converged solution for SMBs is higher than it’s ever been. The technology awareness is higher because broadband technologies are on the agenda for SMBs.
What message are you pumping out to channel partners this year?
KC: The Cisco partner strategy revolves around three axis: hunt, grow and adapt. For our channel partners, the opportunity needs to align in some way shape or form with a Cisco strategy. Channel partners may have other strategic elements in their business, but in their Cisco partner business it has to blend.
Partners and Cisco need to hunt for the opportunities. One of the biggest changes in the last two years in our partner community is that partners have now got a much clearer view of their own business strategy. Two-and-a-half years ago, it was hard to know what the strategic differences were between our largest partners. But today it is pretty clear. I reckon that’s fantastic. Where you have a clear strategy, you can resource appropriatetely, drive a value poposition and drive profitability.
We are working on programs that will encourage our partners to hunt for new opportunities. And growing means not just considering routing and switching. If you do, then please appreciate, that with strong market shares our competition is intense, the chances of you driving high margins are somewhat lower. But the push towards advanced technologies puts partners in a good position.
Think of ways to deploy solutions for your customers. Don’t just sell a storage switch. Look for something that offers business relevancy. Work out how you can help a customer scope in size, and offer storage consolidation and management. Understand how a converged voice and data network can offer productivity gains.
On the professional services and solution delivery front, if you’re selling CRM or sales force automation or an accounting financial solution, then you should be considering how converged telephony network can contribute, or what an intelligent storage subsystem might need or what wireless will contribute to mobility needs. That’s a strategy we’re pursuing with our partners.
How has the Cisco channel been working since the decision to remove Tech Pac from the distie ranks?
KC: There were definitely some risks associated with the decision. But our judgement was that it was the right thing to do. The most pleasing thing is I don’t hear any of our partners, or our Cisco staff for that matter, observing that any of those risks have materially come home to cause us difficulty.
And indeed, what I had positively hoped for was a greater integration in the business processes between Cisco and distributors. What I wanted out of consolidation was primarily a chance for distributors to build up enough volume to become profitable, and for us to both get more operationally efficient, more systems integration. And both of those — with Express Data and Lan Systems — are proceeding well. I’m pleased with the results.