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Cisco presses VARs for investment, expertise; the effort pays off for partners

Alison Diana

Cisco -- already ranked as among the most effective channel-distribution companies in the industry -- has raised the bar on its channel strategy by encouraging its partners to further differentiate themselves, using an increasingly stringent array of high-level certification offerings.

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The latest edition of the San Jose, Calif.-based vendor's Channel Partner Program is aimed primarily at solution providers with expertise in broad, integrated network solutions. The new certifications, the first of which were unveiled at the Cisco Partner Summit in March, are designed to deepen that expertise by certifying partners in specialized networking functions such as advanced security services, unified voice-video-data network applications and other very specialized solutions, according to Surinder Brar, senior director of Worldwide Channels at Cisco and a member of Cisco's Worldwide Channels Board.

Bigger bang?

Under this ambitious program, Cisco partners have two years -- based on the anniversary of their authorization with the vendor -- to complete their transition to the enhanced program requirements by March 2008, Brar said. Partners can test new employees or those seeking certification in a new area can use a wide variety of free Web-based training, he said.

Cisco Gold, Silver and Premier certified partners will be capable of delivering networking solutions with integrated security, wireless LANs, routing, LAN switching and, as an option, unified communications, according to Cisco.

The vendor now offers three specialization levels -- Express and Advanced, along with a new Master Specialization in unified communications and security. Cisco is also including lifecycle services as a major component of all its specialization training.

The company will reward partners in areas such as creating new opportunities; selling advanced technologies, and upgrading existing customer sites, Brar said.

"If you are going to work with Cisco they will work with you to get you to the other side of the [value] bridge," said Jeffrey Pedersen, strategic alliance manager at Dimension Data, a Clearwater, Fla.-based specialist in voice and security solutions that has worked with Cisco since 1994. "By going through these rigorous certification programs, it really helps us grow our business."

Rigorous journey

Through its free, online training offerings, Cisco has sliced an extensive amount of the cost that could be entailed. But the process still involves hours of engineers' time, Brar admitted.

And some international locations may have to avail themselves of teacher-led classes, which add to the cost. However, since these new certifications were generated by customers, the process should greatly benefit those partners willing to expend the extra time. And, since this model moves even further away from a volume-based program, it will enable smaller VARs to compete with large, multi-national service organizations, Brar said.

"The cost to transition is dependent, very directly, on what capabilities the partner has and what they want to achieve," he said, adding that the average cost for taking an exam is $120." There are some economic rewards. We're not telling partners, 'You become a Master. You become Gold.' It's how can they leverage the available Cisco brand and available incentives to achieve their own business goals."

"We have extensively interfaced with partners. We have held forums around the world where we asked them what they would like in our program," he said. "It is the same customers who are giving us the input that these partners are supporting. This really is our partners' program."

Business boon?

"It is a rigorous program, but it's really essential," said Pedersen. "Without this, you're going to have a lot of unsatisfied customers, which would hurt Cisco's brand. When you're a Cisco Master it means you're an expert."

Cisco snapshot
Company Name: Cisco Systems Inc.
Headquarters: San Jose, Calif.
Phone: 408-526-4000
Program Started: 1998
Certification specifics
Last Major Change to Program: March 2006
Number of Partners Worldwide: 33,000
Number of Certified Partners Worldwide: 3,000
Number of Specialization Badges Worldwide: 6,000
FY 2006 Revenue: $28.484 billion
FY 2005 Revenue: $24.801 billion

Source: Cisco

Although it has not used a return-on-investment (ROI) tool available from Cisco to determine possible benefits from investing in the new training and certification, Chicago-based Sentinel, which has been in business since 1982, expects the revamped program to ultimately benefit it -- but not without some worthwhile disruption of business, said Robert Keblusek, senior vice president of business development at Sentinel, which recently achieved the TelePresence Advanced Technology Provider status from Cisco.

"They've done a good job of differentiating their channel partners," he said. "This year, there is a lot of retraining, a lot of recertification for all of us. There's probably some value in some of the retraining and recertification. It does, however, take time away from our engineers. Ultimately, their moves were positive. While complex and using up some of our resources, it's all about the cost of doing business well."

Minor hiccups

While some Cisco partners had complaints about the changes to Cisco's program, most said the drawbacks are not remotely of deal-breaking strength.

In the past, Cisco's size and the ubiquity of its products among local competitors was an issue to some solution providers, but most said that over the last 12 months or so, turnover in their coverage areas has reduced the head-to-head competition, and all praised their local Cisco reps.

"We have what I would consider the best channel manager I've ever run into," said Jeff Nyland, director of multi-services at Total Communications Inc. of East Hartford, Conn., which has been a Cisco partner since 1998. "Our Cisco channel manager is stellar. He is constantly working with our director of marketing. He is in our business office on a regular basis. Cisco is a difficult organization, just because it's so big. Our channel manager gives us the ability to make our way through Cisco."

One problem that still exists -- but that could be negated, perhaps, by the most recent changes to the program -- is the discrepancy between orders placed via distribution and orders placed directly with a Cisco sales rep, Nyland said.

When a Cisco rep places a purchase order, it goes against the rep's quota immediately, he said. For distributors or value-added resellers (VARs), that order is applied to the quota when it ships, said Nyland.

"Sometimes it's easier for a sales agent to go through a direct rather than a tiered partner," he said. "So we run into that bump sometimes. The only solution might be, no matter where the business accrues it's only shown [against quota] when it's a shipment, I guess. You're trying to get as much mindset from a manufacturer's rep. It's very competitive." One other area that could use some extra elbow grease is improving the competitive pricing of Cisco's SMARTnet maintenance and support service, said Keblusek. "That has probably been one of our biggest, and only, bones of contention," he said. "It really has a lot to do with the cost and attachment to product. When you buy Cisco's service and support product, it's one of the best available. But there are a lot of customers who want to change how Cisco packages the service."

This lack of flexibility can negatively impact solution providers' ability to sell this offering, said Keblusek, though Sentinel is extremely satisfied with the way in which Cisco doesn't leave partners or end-customers in the lurch. "One thing we really like about them is they really stand behind their product," he said. "We focus on the customer and Cisco ultimately focuses on the customer. They'll jump through hoops if there's a problem."

The best is yet to come?

The next 18 months promise to be full of change, adaptation and evolution, as Cisco continues to ramp-up its partners' participation in its program. Already, many partner companies are ahead of schedule in their plans to add new certification and areas of specialization, said Brar.

While the company expects partners to continue to invest in its developing product line, Cisco is also making investments to expand those offerings, Brar said. Since June, Cisco completed its acquisition of Arroyo Video Solutions, Orative, Meetinghouse Data Communications, Metreos and Audium, and selected assets of Ashley Laurent.

But the requirements for partners will continue to increase as the technical demands of the networks do. One goal: Just as some customers' RFPs now include the requirement for a provider to be Cisco Gold partner, Cisco envisions a point at which some RFPs could demand the solution is provided by a Master Unified Communications or Master Security Cisco partner, he said.

Alison Diana, a partner in ProfessionalInk.biz, is a freelance writer who specializes in the indirect channel and technology. She is based in Merritt Island, Fla., and can be reached at alisondiana@hotmail.com.


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