Cisco channel wants protection in global partner collaboration push

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Cisco channel wants protection in global partner collaboration push

Rivka Gewirtz Little, Senior News Writer
Cisco Systems is calling for channel collaboration -- asking its partners to share customer accounts with solution providers in other countries, in order to better serve customers that are expanding across borders.

Cisco announced its Global Resale Agent Model this week at the Channel Exchange event in Lisbon. Under the program, a group of "host partners" would initiate the main customer account, which could then use a pool of "agent partners" in other countries where the account is active. Those partners can find each other through Cisco's

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Partner Exchange social networking site.

"Globalization has already started changing in the last few years," said Alex Thurber,

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Cisco's senior director of go-to-market technology for worldwide channels, in a phone call from Lisbon. "First it was big companies in the developed world launching remote sites into the developing world. Now companies in the developing world are coming into the developed world."

Once these companies begin to open remote sites in other countries, it is often too difficult for the local partner to service them abroad. That's when they would seek an "agent" partner.

There are about 4,000 "emerging multinationals" that are too small for Cisco's four biggest global partners -- Hewlett-Packard, IBM, BT Group and Orange Business -- which handle Cisco's largest global accounts, Thurber said. These emerging multinationals are also not a good fit for the next tier of 50 or so global partners that tend to focus on one or two geographic areas, he added.

"We needed to figure out a way to deal with [emerging multinationals] from a scaleable perspective," Thurber said.

The program is in pilot with about 150 customers. One of those customers is a tortilla company in Mexico that has expanded into the United States and United Kingdom and wants to build out unified communications networks in those remote sites. The initial partner in Mexico will design all the networks, but solution providers in the U.S. and U.K. will handle actual delivery and implementation of the equipment, as well as local services.

The solution provider in Mexico registered the deal and is using Partner Exchange to find remote partners with Cisco's help, Thurber said.

Of course, any time partners are asked to share customer information or accounts, problems of trust arise, and this could pose a threat to the Global Resale Agent Model.

Partners will wonder what's to stop the agent provider from taking over the entire account -- especially, for example, if the tortilla company were to grow significantly larger in the U.S. than in Mexico.

Cisco is "working on different models" to address those issues, Thurber said. He expects most of these partnerships to be "transaction-oriented" -- meaning that the tortilla company, for instance, would bring in a partner only for the specific transaction and not for any further business. That may not work in the long run, however, since it would make sense for the U.S. partner to continue providing services locally. Still, there are ways of limiting that partnership to only a localized services agreement, Thurber explained.

Cisco has already changed its internal compensation package to be sure that account managers in both the home country and remote sites are paid fairly so there is incentive to work the deal from both sides. That arrangement will cost Cisco extra money, Thurber acknowledged.

Another issue still to be addressed is ensuring that solution providers have a "rational method" of learning the background of a potential partner. While Partner Exchange is a strong networking tool, it may not yet provide enough background information to verify the reputation of potential partners.

Partners react to Cisco's channel collaboration push

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Partners are positive about the prospects of the program, but want to be sure that Cisco will regulate the relationships among partners.

"We're not dealing with the biggest companies around, but it's not unusual for our clients to have offices in other parts of the world or even in Canada. This helps us simplify and deal with this," said Mont Phelps, president and CEO of NWN Corp., a Waltham, Mass.-based solution provider.

"The only thing I would worry about is if global [solution providers] were able to take advantage of price differences based on geography. That would be a problem," Phelps said.

As for client snatching among partners, Phelps said, "It will be OK if Cisco lays out the ground rules and expectations, and says, 'We are not going to tolerate this.'"

Cisco is hammering out solutions for these trust issues before the program goes live early next year, Thurber said.

To participate, host partners must have a valid Indirect Channel Partner Agreement (ICPA) and be at least a certified premier partner in their launching country. Global resale agents also must have a valid ICPA and at least premier, silver or gold status. The host and agent partners must have comparable specializations in order to purchase and implement equipment.