Cisco is placing partners at the heart of its transformation strategy going forward, as the vendor builds a broader and more collaborative channel.
Triggered by new technologies and changing buying patterns, the vendor’s route to the promised land of software and recurring revenue will be defined by the depth and capabilities of its ecosystem.
Because despite an enviable line-up of partners - coupled with healthy local market share figures - the networking giant can no longer rely on its heritage.
It’s a dilemma faced by many a large vendor, a vendor that has dominated hardware markets for decades, yet now stands at a crossroads.
“I am pleased with the progress we are making on the multi-year transformation of our business,” Cisco CEO Chuck Robbins said.
“The network is becoming even more critical to business success as our customers add billions of new connections to their enterprises.”
Addressing analysts following third quarter financials released in May, Robbins said the company is “laser focused” on delivering value through highly secure, software-defined, automated and intelligent infrastructure technologies.
While the cynics will no doubt argue that pivoting is becoming the new failing in Silicon Valley - with an endless stream of struggling vendors hiding pain through fancy terminologies - Cisco is driving change through its channel, leveraging a diversified network of partners to progress.
The channel shouldn’t be fooled however. Turnarounds take time, change can be challenging and alterations are arduous.
A quick glance at the networking giant’s recent round of financials shows a vendor tackling tough internal transformation strategies, with 1,100 additional job cuts issued as part of an extended restructuring plan.
This follows over 5,000 cuts in August 2016, impacting an estimated seven per cent of its workforce.
But as Cisco takes it one quarter at a time, the titan of industry is not alone, with Microsoft, IBM, Intel and Dell all taking a hit during the past 12 months.
According to Fortune, layoffs in the technology sector were up 21 per cent to 96,017 jobs cut in 2016, compared to 79,315 the prior year.
Cisco isn’t alone in instigating change, but crucially, the vendor acknowledges that only the channel can deliver on the potential of a digital world.
“Digital means a million different things to a million different people,” Cisco senior vice president of global partner organisation Wendy Bahr observed.
“We explain it to our partners as the convergence of innovation and technology that has connectivity. And if you think about what a traditional Cisco reseller does, that’s what they do all day and every day.
“They converge disparate technologies and make them available through a connected network.”
Despite a clear definition for digital transformation lacking however, end-user appetite is growing across Australia and New Zealand, driven by a boardroom desire to leverage new technologies to innovate both internally and externally.
But partners are growing tired of identical vendor marketing rhetoric, rhetoric that talks in digital generalities and delivers very little in terms of clear-cut routes to future progression.
And while providers take comfort in aligning with channel-friendly vendors, the time for adulation is over. Today, partners value vendor roadmaps and direction more than ever.
“We have five strategic routes to market through the channel,” Bahr explained.
Speaking to ARN, Bahr said the new-look Cisco channel is made up of traditional resale, multi-partnering, IT service providers, Internet of Things specialists and a cloud marketplace.
Outlined as five paths to profitability for partners, Bahr - who was quick to stress the continued importance of traditional resale players - explained the value of creating a multi-partner environment within the Cisco ecosystem.
Tapping into the collaborative wave taking over the channel, Bahr said win rate improves when partners work together, advocating the value of like-minded providers creating alliances within the wider network.