Cisco’s new global channel boss has issued a stark warning to partners who fail to transform as the vendor pushes ahead with its transition from hardware to software.
Oliver Tuszik, who took over from the long-serving Wendy Bahr in September, told journalists that partners which “continue to stick” to just selling hardware will eventually be replaced.
Tuszik's comments came as the vendor announced plans to transition its channel incentive scheme away from rebates based on upfront sales and renewals to an annuity-based model that rewards partners for managed services.
“There are a huge amount of new products coming to market and a lot of models are changing for our customers,” he explained. “Customers want a business partner who helps them use technology.
"This is where we are going. We need to find a program for the future to allow partners to find their own speed for the challenge.
"We have never ending complexity. Partners need to deal with complexity and the fact that people want to get access from everywhere. The world of complexity will kill some of our partners and customers.
“If you stick to your own services, you will be replaced. If you move on to the new services that are required, you will be in an even stronger position because you get closer to the business value."
Tuszik, who previously led Cisco’s fast-growing German business, said changes stemmed from changing customer demands rather than his role as “the new guy” following Bahr’s departure in August.
“Every single partner we have is working on a transformation project for good reason because the customers are saying: ‘If you just deliver hardware to my house, we won’t pay you that much’,” he said.
“The business model needs to change: the more value you add on top, the more money you make. There’s a lot of things we - and Wendy - did incredibly great. And I will not disrupt it just because I’m a new guy.
”If we are running the best partner program in the world, I would simply be an idiot to change things immediately. We love to talk about change and disruption in the IT industry.
“What I’m thinking about is developing. We have something that’s incredibly strong and some good results over the last couple of months and years."
Cisco is expected to post revenue of US$12.86 billion, up about six per cent from a year ago at the market’s closure on November 14. This would mark its fourth consecutive quarterly growth.
Speaking during the Partner Summit in Las Vegas, Tuszik said security remained one of the biggest untapped opportunities for Cisco’s customers.
The vendor has recently placed a heavier focus on its cyber security strategy, having recently acquired Duo Security for US$2.35 billion and integrated its capabilities with its SD-WAN network, which was announced this week.
However, according to Tuszik, not enough companies are putting enough emphasis on cyber protection.
“It’s horrible to see that leading companies are not moving into the new world because they are afraid of security,” he said. “It’s a horrible statement. We as Cisco and partners need to help customers understand the risks of ‘going digital’ and then show them what’s the opportunity and how they can manage the risk.”
In terms of other untapped opportunities, he added: “When you speak to businesses, big or small, they all say they want to use their data in a better way: faster and more secure.
"Someone needs to listen and tell them where to start. But not everyone is able to capture their vision."
Eleanor Dickinson attended Partner Summit as a guest of Cisco