Cisco stresses 'partner-centric' model in converged data center push

Unified communications and a converged data center mean huge partner opportunities, Cisco says.

This Content Component encountered an error

SAN FRANCISCO -- Cisco's burgeoning rivalry with Hewlett-Packard in the multi-billion-dollar converged data center market was a strong undercurrent as its partners gathered at Cisco's Partner Summit here this week.

Related converged data center resources
HP data center push targets Cisco

HP, Cisco ramp up volume on data center convergence

Multitenancy alliance could enable virtual data centers

Cisco Systems Inc. executives repeatedly reminded partners about the company's successful navigation of previous game-changing market transitions, such as its ability to unseat legacy voice technology players in the shift to unified communications. Now, Cisco is positioning the network as the central "platform" for data center consolidation and virtualization, collaboration and video applications. It is calling on partners to help it take on the "giants" in this space.

"We don't fear competition at Cisco, we love it. It makes us better," said Keith Goodwin, Cisco senior vice president for the worldwide partner organization, during his opening keynote in San Francisco. "We are never going to be the only big player in the game. We have done this before."

More Cisco-VMware converged data center collaboration

The latest evidence of Cisco data center aspirations came Wednesday in the form of an expanded relationship with virtualization software leader VMware Inc. Among other things, the two companies are targeting mutual partners with a bundled offering that combines the Cisco Unified Computing System C250 with VMware vSphere and the Cisco Nexus 1000V distributed virtual software switches. The companies will also fund pre-approved virtualization assessments between May 2010 and July 2010 for Cisco partners that have earned its DCNI (Data Center Networking Infrastructure) Specialization for data centers.

Ralph Nimergood, vice president in the Cisco worldwide partner organization, said the company has conferred more than 500 specializations so far. "The DCNI badge is the fastest growing specialization in the company's history," he said.

Huge server upgrade opportunity

Ian Cook, CEO of global integrator Logicalis Inc., estimates that more than 20% of the world's servers are due for a refresh. But the economic slowdown has prompted enterprises to rethink their strategies toward data center technologies. They are seeking building blocks that will consolidate previously separate networking and server concerns, and that will have "legs" in the transition to cloud computing. "This is more than a converged infrastructure," Cook said.

Revived role for distribution

Distribution relationships will also be a key competitive weapon as Cisco squares off against HP. For one thing, distributors will be crucial to the delivery of Cisco's multi-vendor virtual infrastructure play with VMware and EMC, dubbed the Virtual Computing Environment (VCE) Coalition. In June, Avnet will become the sole distributor in North America to carry the preconfigured Vblock 1 system, designed for data center optimization and consolidation projects.

There are 45 partners authorized to sell the Vblock architecture, culled from the select partner ranks of the three coalition vendors, according to VCE coalition executives. Approximately 200 more partners are waiting in the wings to be authorized to represent the solution; there actually isn't an umbrella authorization, partners need to invest in elite certifications for all three companies, they said.

Avnet will maintain its North America exclusivity with Vblock for at least six months, but other Cisco distribution partners are ramping their capabilities and are "keen to do this," says Dave O'Callaghan, vice president of worldwide distribution for Cisco.

Distributors were critical in Cisco's ability to weather the most recent economic downturn, O'Callaghan says, because they helped keep tabs on "demand signals." He says more Cisco DVARs aligned themselves more closely with distributors in the past year to rationalize supply chain and operational costs. "As we move into the data center space, these relationships become even more significant," he said.

Cisco is preparing a new initiative to further solidify its distributor relationships, O'Callaghan says. The program, Return on Cisco, was developed with three distribution CFOs. It addresses front-end transaction margins, rebate policies, and partners' ability to optimize their return on Cisco-related investments.

There are other significant changes on tap for Cisco partners. At the start of its next fiscal year in August, Cisco will begin transitioning certifications away from product-focused designations to specializations in Collaboration, Data Center and Borderless Networking. It has created new roles, "Business Architect" and "Technical Architect," to help partners develop new professional services.

Another tactical shift that will come into play in fiscal year 2011 is Cisco's creation of a Global Partner Network that creates a more formal structure for multi-partner collaboration within certain accounts. It has also launched a fourth channel incentive program, the Teaming Incentive Program, which rewards partners investing heavily pre-sales activities with 5 additional discount points.

Cisco partners say both developments show the Cisco partner organization is willing to listen and evolve accordingly.

"The Teaming Incentive Program (TIP) really fills a hole that existed in between the other incentive programs," says Mark Hilz, president and chief operating officer of Cisco partner INX, based in Lewisville, Texas. He pointed to situations in which solution providers spend months evangelizing a new technology, only to be underbid at the last moment. TIP ensures that the partner who has truly evangelized the deal gets additional margin. "This is fixing an issue that partners wanted fixed."

Rodrigo Parreira, chief operating officer for Logicalis in Buenos Aires, Argentina, says the Teaming Incentive Program will help partners prioritize sales investments. "Competition will still exist for the partners who are registered for this incentive, but the only who is in earliest will be the only one to get that extra credit," he said.

John Breakey, CEO of Unis Lumin, the Oakville, Ontario-based network integrator, says the Global Partner Network will be instrumental in making it easier for his company to business outside its local community. Historically, customers have been forced to handle multi-location deployments as separate transactions. The new program will make it much simpler to handle these engagements administratively, he says, while giving partners more confidence that they will be managed smoothly.

"The word 'partner' is a synonym for trust," Breakey said.

In another subtle dig against its rival, Cisco took pains to distinguish its strategy from HP's when disclosing its decision to define approximately 500 "transformational accounts" where Cisco and partners will collaborate closely on evangelism and deployment.

Goodwin contrasted Cisco's plan with "hard deck" sales approaches that cut partners out of certain, typically large, accounts --- a veiled reference to HP's direct account assignment method. He described transformational accounts as "high-touch," requiring a high level of support and commitment from Cisco in collaboration with its partners. Moving down the pyramid of customer targets, midsize accounts would be considered "medium touch," while SMB prospects would be "low touch."

The common denominator is that partners will not be automatically precluded from working in any particular account, according to Goodwin. Indeed, another Cisco executive noted that fully 80 percent of the services supported within some of these accounts don't exist in Cisco's own portfolio.

There is a caveat: To be named in a transformational account relationship, Cisco partners must earn a new services certification, the details of which are still being hammered out.

Transformational accounts will include early adopters of technology working on multi-year phase-ins, Goodwin says. Cisco plans to name those accounts in July. Its intent is to include partners in these relationships, a strategy it will support by adjusting Cisco field sales compensation accordingly.

"We are partner-centric up and down the entire customer pyramid," Goodwin says.

Let us know what you think about the story; email Barbara Darrow, Senior News Director at bdarrow@techtarget.com, or follow us on twitter.

Dig deeper on Technology Vendors-OEMs

Pro+

Features

Enjoy the benefits of Pro+ membership, learn more and join.

0 comments

Oldest 

Forgot Password?

No problem! Submit your e-mail address below. We'll send you an email containing your password.

Your password has been sent to:

-ADS BY GOOGLE

MicroscopeUK

SearchCloudProvider

SearchSecurity

SearchStorage

SearchNetworking

SearchCloudComputing

SearchConsumerization

SearchDataManagement

SearchBusinessAnalytics

Close