At Cisco Partner Summit 2012, Cisco introduced Partner Plus, a global channel program targeting midsize customers. And at this year's summit in June, Bruce Klein, senior vice president of Cisco's worldwide channels, talked about the midmarket opportunity for partners as top of mind at the company. At the end of July, the company appointed John Donovan, a U.K.-based, 18-year Cisco veteran, to lead a new global midmarket acceleration team for a new organization that in fiscal year 2014 will be born out of the merger of Cisco's Partner Led and Global Sales teams.
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We have a big gap to close in the midmarket. … And, to be quite frank, some of our partners are taking advantage of what we offer, and some of them are not.
vice president of global virtual sales, Cisco
This week Donovan talked to SearchITChannel about his new role as vice president of global virtual sales, his new group and what it means for Cisco midmarket partners.
Cisco defines the midmarket as companies with 100 to 1,000 employees. The energized midmarket push at Cisco pertains to Cisco Premier and higher-level partners in the Cisco Partner Plus program, which has about 2,100 partners globally.
What's the background on the merged organization around midmarket?
John Donovan: We have a lot of room to grow in the midmarket. Our midmarket share is less than 20%. That's about 10 points lower than it is in our enterprise business. The purpose of merging the two groups is to drive a more cohesive midmarket strategy for the benefit of the customers and the partners that we're trying to grow our business with across the commercial, service provider and public sector.
We've been working to integrate the two organizations since the Partner Summit, and we have about 1,700 people at Cisco, globally, focused on this new business -- which benefits partners as it pertains to bookings and revenue that goes through partners.
When we look at the addressable market for our products and solutions, we believe it will be about $26 billion in technology and the same, $26 billion, in services by 2016.
So what is Cisco's strategy here?
Donovan: So the way we're going to address midmarket growth is by driving a partner-led coverage model. That means we are intrinsically linked with our partners in driving success and working closely with them to make sure that this is a profitable and attractive business for them. We're also going to make sure that we're building and delivering relevant products and solutions for our customers in this space because they're going to experience a rapid change to new consumption models and cloud, and we have to make sure that our offerings in this space are relevant to them.
The Cisco Global Virtual Sales Team has already spent several years engaging with thousands of these customers, worldwide, and has worked with partners as well. So we're used to this type of selling model, with almost half of our business in this segment already going through the Global Virtual Sales Team. So we're adding more impetus to a capability that we already have.
Now with our Virtual Engineering Team, we can explore how to create a whole selling platform that's substantial and quite revolutionary in business -- all of which will be hugely beneficial to our partners because we're going to be going after this space in a big way.
How does this strategy tie in to what was talked about at Partner Summit?
Donovan: Bruce [Klein] talked about what we were going to be doing in the midmarket, and we're going to be delivering on all of those promises. Our goal is to make our partners extremely profitable in the midmarket.
One of those promises is to deliver $1 billion of sales-qualified sales leads to our partners over the year, driven by our marketing activity. I am heavily involved with that project now, and we're measuring our programs weekly in terms of the leads that our partners are accepting, and we're making great progress there.
We also talked about the made-for-midmarket portfolio. One of the areas of improvement for Cisco over the last few years was how [to] make products and solutions that are relevant to the midsize customer.
We're not reengineering enterprise products for the midmarket, but rather we're designing products for the midmarket. An example of that is our Business Edition 6000 midmarket collaboration platform that was launched earlier this year. We're seeing tremendous growth, over 100% sequentially every quarter. Having the right platforms for our partners to sell makes a huge difference.
Another addition to our midmarket portfolio was the acquisition of Meraki, about a year ago. Meraki's portfolio was designed for these midmarket customers, so it's a way of delivering [wireless LAN], security and switching with a new consumption model -- cloud configuration -- and it's easy to consume.
The last thing that we talked about was our investments in partner-led programmatic elements and what we're giving back to our partners. We promised to double our investments from $75 million to $150 million, and we are doing that.
So we are really making sure that this journey and this success that we're going to drive is something that our partners will share in, make money and build profitable business practices out of our investments here.
Can you expand on the Cisco Partner Plus framework?
Donovan: We're going to be driving that hard over the next year to make sure that our partners take advantage of what we offer. One of the areas that we can help to drive is adoption of the Partner Plus framework -- the primary vehicle with which we're engaging our partners in the midmarket opportunity.
It consists of a number of elements designed to drive top-line growth, to reward our partners financially but also to offer them capabilities to go after this space. There are six core accelerators available. Some offer services to our partners for free, things like enablement -- i.e., training and tools for sales so partners can be more effective in front of the customer and drive the right conversations -- and training to represent the products and services in a more comprehensive way, for example.
There's also … phone access to CCIE-level Cisco presale engineers [to help with] design and configuration work for … customers, and it's free for Partner Plus. There's customer intelligence information and analytics to help partners pinpoint the opportunities in the marketplace. And coupled with that are the marketing activities.
The last leg of the program is incentives: incentives at the company level and at the sales/rep level as well.
So our job now is to help land all of these capabilities and make sure our partners are using them, because we want to drive a preference strategy in this market working with our partners.
How are you getting Cisco partners on board with this effort?
Donovan: All of our business in the midmarket is through our channel partners. So everything we're doing is to drive market and customer demand, accelerating transitions to new business models, to cloud, software, all of the products that we're bringing out, all of the money that we're putting behind it -- all of it will benefit our partners because all of the supply goes through our partners.
We're not just focused on driving deals; we're interested in helping our partners build an efficient and effective business practice in the midmarket. The midmarket is a different type of sales motion, a different type of business model, and the skills and capabilities that our partners need to be effective are different than selling to enterprise customers.
Without our partners in this business, we're not going to be successful. So we have to help them drive success because we're only going to be able to do it together.
We have a big gap to close in the midmarket so that's a lot of growth. And, to be quite frank, some of our partners are taking advantage of what we offer and some of them are not.
Part of that has to do with communication. This is a global framework, and sometimes the communication between the salesperson and the partner may not be fully landed. Also, sometimes partners need to adapt their business practices or business process to take full advantage of what we're offering. That can take some time too.
The more partners see this as a holistic business model offering; it's not just about incentives -- it's about offering other services that they need to drive this market. The more they can embrace that and see it as a business model, the more we'll see in terms of adoption. I think it just takes a bit of time.
I think we need to do a better job of communicating and helping our partners embed that in what they do day to day.
So what will partners see from Cisco going forward that's different from what they're seeing now?
Donovan: Partners aren't going to see anything different [from] what we said we're going to do. We're carrying on in driving the promises that we already made and the strategy we put in place, taking the work we've done previously and bringing it mainstream.
We're not changing course; we're accelerating the impact of what we're doing in this business.
So what partners will see is greater impetus, more noise. We'll be driving more marketing campaigns, more demand [generation], more planning and helping partners capture this opportunity as quickly as possible.