Cisco Partner Summit: The $170B Opportunity

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CiscoWith this last Partner Summit in New Orleans, Cisco celebrates its 15th partner summit

Keith Goodwin, Cisco SVP Partner Organization, purposefully chose to kick off this 15th summit by acknowledging an attendee from Ingram Micro France who has attended all 15 summits. While the 2011 summit had more than 10,000 attendees (counting the 7000 virtual attendees, too), that Ingram Micro executive was part of a first Cisco Partner Summit with a mere 175 attendees. 

You can measure Cisco’s impact on the channel in the last 15 years by counting that growth in attendees. And Goodwin went on to introduce IMPACT as the theme for this 2011 Summit: impact to make a difference (first day), impact innovation (second day) and impact leadership (final day).

Cisco is putting extra effort into targeting the small and medium business (SMB) market because, according to Goodwin, Cisco “isn’t getting its fair share” of this very large, growing market.

When Goodwin handed over the stage in Big Easy to the Cisco CEO and President, John Chambers highlighted the partner’s $170B opportunity which Cisco addresses with five priorities:

  1. Core routing/switching business
  2. Collaboration
  3. Data Centre, virtualization and the Cloud
  4. Business (and technology) architectures
  5. Video

Chambers underlined Cisco’s ability to read the market, stating, “We see market transitions way ahead of our competition.”

About the rising datacentre market, Chambers told partners: “You haven’t seen anything yet in the datacentre and the cloud. Cisco doesn’t do anything halfway… We almost always become number one...”

Partner Roles CloudAfter Chambers’ keynote, Edison Peres took the stage. Partners needed little introduction to Edison Peres but this was his first time at a Summit as SVP Worldwide Channels and his first as host. Peres urged partners to pick their role in the Cloud. He introduced the Cisco Cloud Partner Program (which recognizes the different roles partners can choose to focus on in the cloud): Cloud Builder, Cloud Provider or Cloud Services Provider

Architectural specialisationsWhat comes after you move your business from products to systems to solutions? Edison says there’s a shift in how sales organizations confront the market... and solutions will now yield to architectures.

Peres urges partners to invest now in business and technology architectures...and extend those architectures to verticals by growing an offer of professional services. Partners that lead with professional services will differentiate themselves, says Cisco, and be rewarded with an increase in profitability. 

To enable partners to build professional services practices, Cisco announced the launch of its Collaborative Professional Services program, a library of resources to help its channel partners improve their professional services capabilities and accelerate their evolution from selling products to ‘architectures’.

Architectural PlaysTo help make the transition, Peres offered 30% off the training cost the first 500 partners to take the new specializations. And more “sweeteners”:  92% discounts off “not for resale” Webex subscriptions for the new partner offering and also big discounts off Tandberg video end points. The cost and subscription for Cisco Quad collaboration platform, its enterprise social software, was also greatly reduced.

On Day 2, Breakout sessions focused on geography or technology such as the new unified communications platforms for small- and mid-sized businesses or Partner Advisor, offering live support services for partners.

Michael Capellas, who leads the VCE joint venture between EMC, VMWare and Cisco delineated the top IT megatrends-- featuring, of course, the Cloud. VCE's Vblock Infrastructure Packages deliver IT infrastructure that integrates best-of-breed virtualization, networking, compute, storage, security, and management technologies. 

Padmasree Warrior, Cisco CTO, took up the Cloud topic and tied it neatly back to technologies and architectures. Cloud and on-premises will march forward together, Warrior says. “This is a journey...Cloud computing will take 10 years to unfold.”

Cisco Verticals

Rob Lloyd, EVP anchored the event with a doubling of the Value Incentive Program rebate on key products and other additional incentives. Lloyd concluded a great presentation by describing how he had once founded a successful Apple VAR only to have it fall victim to Michael Dell’s vision to commoditize the desktop. From that experience, he warned Cisco partners: vendors who ask partners to sell commodity products are really asking partners “to commoditize their business.”

If commoditization is a highway to hell, then value-added would be the road to partner heaven. At this summit, Cisco urged partners to look at three key strategies that signpost the value-added route:

  1. Pick a role in the Cloud (i.e, Don’t try to do it all)
  2. Invest in architectures and verticals
  3. Lead with Professional Services.

Just prior to the Partner Summit, Wall Street responded poorly to Cisco’s latest results where the traditional business of switches and routers declined faster than the new Cisco business kicked in. 

Some pundits actually called for Cisco to consider de-vesting its consumer business.

Keith Humphreys

That’s not the kind of IMPACT Cisco is hoping for. Instead, when Cisco chose IMPACT as a theme for this year’s Partner Summit, they hoped their impact on partners would translate into futher impact that inspires customers to buy into Cisco’s vision of a cloud-laden videophile future where partners offer verticals the required professional services to transform business architectures. 

If partners follow the Cisco route, that “new business” that Cisco desperately seeks will be all the IMPACT that Wall Street wants.

[Photo Left] Keith Humphreys is Managing Consultant at euroLAN, Industry Analysts and Consultants, founded in 1993 to specialise in assisting technology companies transform their channel and alliance partnerships, into a significant source of competitive advantage.

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