Smarter channel ahead as Cisco chases IP builders

Smarter channel ahead as Cisco chases IP builders

Tech giant targets programming and coding capabilities across the channel

Chuck Robbins - CEO, Cisco, addressing partners on the opening day of Cisco Partner Summit 2017

Chuck Robbins - CEO, Cisco, addressing partners on the opening day of Cisco Partner Summit 2017

Cisco has unveiled plans to create a smarter ecosystem of channel partners, capable of building intellectual property (IP) and differentiating through application development.

Centred around programming and code, the tech giant is actively pursuing a new breed of partner, a partner capable of building on top of technology platforms to capture future digital opportunities.

In a direct message to the channel on the opening day of Cisco Partner Summit 2017 in Dallas, the vendor outlined the ecosystem of the future, which predominantly involves up-skilling current partners, alongside recruiting specialist expertise along the way.

Specifically, application programming interface (API) will take centre stage, bolstered by an expanding developer community building on Cisco technologies.

“We see opportunity around APIs, programability and coding,” said Cisco CEO Chuck Robbins, in delivering the opening keynote. “We’re increasing the pace of innovation, that’s for us, for partners and for customers.

“Everyone is trying to innovate quickly and differently to create new competitive advantage faster than they ever have before.”

According to Robbins, the business has completed a "significant round of investment" to build out channel capabilities through DevNet, a developer program which provides tools to help partners produce Cisco-enabled applications to sell to customers.

Operating as a fully-integrated program, DevNet comprises a website, an interactive developer community, coordinated developer tools, integrated discussion forums and sandboxes.

“We have invested significantly in DevNet to help those of you who want to build out capabilities around application development and programming,” Robbins explained. “We have an unbelievable opportunity with our partners to unleash more innovation for our customers.

“The API structure that we’re putting in across our entire portfolio allows partners to differentiate offerings to customers in a way that they have never been able to do before.”

As outlined by Robbins, the move is designed to foster greater innovation within the channel ecosystem, allowing partners to differentiate through providing IP, rather than just relying on current offerings.

“Partners no longer need to differentiate through our technology by only having the best services, they can actually differentiate by having their own intellectual property on top of the platforms that we are building,” Robbins added.

“This opens up a new set of opportunities for partners and creates an opportunity for customers as a result.”

Chuck Robbins - CEO, Cisco, addressing partners on the opening day of Cisco Partner Summit 2017
Chuck Robbins - CEO, Cisco, addressing partners on the opening day of Cisco Partner Summit 2017

Robbins said that as the channel continues to build out services capabilities, partners can add further predictability and profitably through coding.

“If partners differentiate their solution to the customer through their own intellectual property, that comes with profitability,” Robbins said. “As customers move further down the digital path, this approach ensures that we continue to be strategic partners going forward."

Bridge for IP builders

Speaking directly to ARN and Reseller News on the ground in Dallas, Robbins said plans are in place to help existing partners transition towards building applications, emphasising the importance of the current channel in realising market potential.

“What comes to mind is when we moved into the voice business,” Robbins told ARN and Reseller News. “The initial reaction was that if we’re getting into voice then we need to recruit all of the voice partners and that’s how we will go to market for voice.

“But the reality was that when we went through that, we figured out that what we were trying to accomplish was not aligned. We realised that it was actually our current partner base, by and large, that would deliver the value.”

Despite acknowledging that new solutions always attract new types of specialist partners, Robbins said the Cisco channel has consistently adapted and built practices around emerging technologies.

“That’s what we saw in the voice space and that’s been virtually true for everything we have brought to market,” Robbins added. “Obviously, when you move into areas such as security, and as we build a more robust portfolio, we see specialised security partners coming closer.

“But in general, even with the current transition to APIs and programability, I firmly believe that most of our partners will add those capabilities through organic or in-organic ways. We will continue to educate and train our partners on how this will play out.”

From a technology perspective, increased Internet of Things (IoT) adoption both locally and globally will drive new partnerships however, as emphasised with Cisco’s agreements in smart metering with Itron and manufacturing with Rockwell Automation.

“If you think of the world of the Internet of Things, that in itself will attract different and new partners to our ecosystem,” Cisco executive vice president of sales Chris Dedicoat added. “The skill sets that they really need and the platform they need is an API platform.

“We’re allowing partners to build that platform to connect the things that will be connected in the future, in a way that will allow a move towards standards. Of all of the things connected today, there’s no real standards around that.

“In working with Itron and Rockwell Automation, they are new partnerships and they require different skill sets and vertical capabilities. These types of partnerships are doing extremely well for us currently.”

Cisco’s focus on recruiting application builders follows recent EDGE Researchwhich outlined that coding is the new oil for partners across Australia and New Zealand (A/NZ).

Chuck Robbins - CEO, Cisco, addressing partners on the opening day of Cisco Partner Summit 2017
Chuck Robbins - CEO, Cisco, addressing partners on the opening day of Cisco Partner Summit 2017

Unveiled during EDGE 2017, in conjunction with Tech Research Asia, for the channel to profit from digital and cloud technologies, development capabilities must be created.

“We are seeing a rise in low code, no code solutions in the market driven by increasing containerisation and micro-services,” Tech Research Asia executive consultant Mark Iles explained at the time.

Backed up by EDGE Research, Iles said 41 per cent of partners are already cutting code, with 17 per cent expecting to join the party within the next 12 months.

“This allows customers to develop specific business applications much more rapidly than before and will be a huge part of future projects,” he added. “Skills or collaboration in this area will be key for partners in the future.”

Business models

In kick-starting Cisco Partner Summit 2017, Robbins also cited the benefits of increased work between partners, again aligning to EDGE Research findings locally, which advocated the benefits of a collaborative channel.

“We’re also seeing great examples of many partners working together to bring innovation to customers going forward,” Robbins added. “We think this is incredibly important but it’s not just about innovation within our portfolio, every company in the world is changing their business model.

“Every single one of them is changing. As are we, as are partners and as are customers.”

As a result, Robbins shed further light on the vendor’s strategy to move towards a software-orientated business, designed to drive greater levels of flexibility and simplicity across the wider portfolio.

At the start of FY16, Robbins said the business had US$2.4 billion on its balance sheet in deferred software revenue, increasing to US$5 billion eight quarters later.

During the last quarter, 31 per cent of business came from recurring revenue, with 11 per cent of product revenue also aligned to annuity streams.

“These are the types of metrics that we are looking at as to how we’re evolving our business model,” Robbins added. “We all need to continue to evolve our own models but also help our customers evolve.”

But despite the direction of travel being clear for Cisco and its partner ecosystem, Robbins was quick to advocate the long-lasting benefits of hardware, and the vendor’s traditional business roots.

“There’s been a great discussion in the marketplace around hardware and software,” he added. “The reality is that we have a very robust and long-term integrated systems business that will not go away.

“But we’re also creating tremendous software capabilities and offers that many of our partners are embracing and taking to market.

“We see opportunities for partners to build new capabilities around software. For 25 years we have been really good at selling stuff, but now we have to move our capabilities around adoption and renewal. This presents great opportunity to continue to create more predictability in our business models.”

James Henderson attended Cisco Partner Summit 2017 as a guest of Cisco.

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