Cisco partners bank on Partner Led changes

After Cisco announced 6,500 job cuts back in July 2011, partners had reason to worry about how the cuts would affect the Cisco partner program, but partners today are confident in the company’s recent alterations to inject life into the program.

In early September, Cisco channel chief Edison Peres announced that the Cisco partner program will now be divided into Customer Led (enterprise) and Partner Led (SMB and midmarket). Starting in January 2012, Cisco Systems Inc. will invest $75 million into its Partner Led sales program. The money will be allocated to areas such as incentive programs, partner-customer relationships, sales assistance and marketing development funds (MDFs).

Increased MDFs and channel resources are important to Mike French, senior vice president of marketing at INX Inc., a midmarket VAR, especially after the job cuts.

“As a midmarket partner, the money put into data center and cloud architectures would be huge for us – we’re extremely excited,” French said. “All eyes are on Cisco at the moment; they made the cuts and refocused their go-to-market strategy. Some partners were nervous about the channel impact, but it’s helpful that Cisco knows the channel shouldn’t be the victim of the cuts.”

A large mid-Atlantic Cisco VAR said that while this is a good thing for the channel, $75 million may not go as far as partners think.

“It will help out the smaller, tier-two companies,” said the VAR. The $75 million sounds like a lot, but it’s actually not that much when you consider the market. And, you still need to earn it.”

Partner Led Named vs. Partner Led Velocity
In addition to the Customer and Partner Led split, Partner Led will be split into two segments of its own. Midmarket partners will now be called Partner Led Named and SMB partners referred to as Partner Led Velocity. Cisco Partner Led Named will focus on data centers and virtualization as well as architectures, cloud services and managed services, and Partner Led Velocity will concentrate on transaction-based sales.

Matt Kalmenson, vice president of sales and marketing at Fidelus Technologies LLC., is satisfied with the changes. Kalmenson said that as a Partner Led Named account with master certifications in unified communication systems and managed services, Fidelus will eventually be provided additional sales and technical resources. “It may take time, but we will see the advantages of the new money from Cisco, and we’ve already seen the benefits of restructuring,” he said.

Kalmenson said that Cisco management is more focused on Fidelus’ individual account, offers better vendor-partner communication and gives more attention to its long-term goals. While Kalmenson is pleased with the Cisco Partner Led program, he thinks these changes are step one to Cisco’s 2012 goals. He said he would like to see increased lead generation, partner margin programs and MDFs so partners can reinvest in their businesses.

Cisco's channel focus and strategy
Peres said the company will now heavily concentrate on five technologies: Routing and switching, collaboration, data center and virtualization, video and business transformation architectures.

“The continuation of the focus on the collaboration field is exciting for us because it will help grow our core business and its adjacent technologies,” Kalmenson said. He thinks that, for a large company, Cisco does well with evolving its channel strategy on the fly.

“There are always challenges with a diverse portfolio, but Cisco has been proactive while focusing on core business and making the adjustments to help partners,” Kalmenson said.

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