LAS VEGAS -- Cisco positioned an announcement about the next generation of its partner program front and center at the opening General Session here today at Cisco Partner Summit 2014. Whether you embrace change or not, it's coming and with it significant changes to three key program components: certifications, specializations and incentives.
Speaking to an audience of more than 2,000 partners, Edison Peres, senior vice president for worldwide channels at Cisco, explained that change in the partner program is necessary to enable the partner of the future, to continue to drive profits and to help partners differentiate themselves in the market. The evolution of Cisco's partner program is in response to a major trend in the market – what it calls the Internet of Everything.
"Our objectives are two-fold: to help partners catch the market transitions and to help partners drive more value for [their] businesses [and] more services, which is where [they] differentiate and drive more profit," Peres said.
Tiers and certifications
Leading off the changes to the program, Cisco will retire the Silver tier level, thereby reducing the number of tiers to three: Select, Premier and Gold. Select is the entry-level brand; the bulk of partners will be at the Premier level; and Gold represents the strongest brand for partners.
This change, according to Peres, is based on partner feedback that indicated that the Silver brand hasn't been very strong, especially considering the investment required and the returns reaped.
Cisco will work with Silver- and aspiring Silver-level partners to transition to the Gold level or to another descriptor, the Master partner. "We will be putting more incentives behind that Master brand," said Peres, who explained that the Master brand will be as good as Gold in the partner's area of focus.
Partners will have 24 months to transition out of the Silver level.
Cisco also announced some changes to Gold-level requirements. First, it will require that Gold partners adopt a "hybrid IT" business model. During audits, Cisco will verify that a partner is actively selling Cisco-powered cloud and managed services solutions. Cisco will expect Gold-level partners to offer at least four cloud or managed services offerings.
Gold partners will also be required to be able to sell to line-of-business (LOB) buyers. At Cisco Partner Summit 2013, Cisco announced Business Transformation Career Certifications to help channel partners better interact with LOB managers. The program included two specialist tracks -- Architecture and Business Value -- and three certifications -- Cisco Transformative Architect Specialist, Cisco Business Value Specialist, and Cisco Certified Business Value Practitioner.
Going forward, Cisco will require Gold partners to have one Business Value Practitioner-certified professional. To encourage partners to invest in the new certification, Cisco will pick up 80% of the cost of training and testing those individuals on the partner's team over the next six to 12 months.
Cisco also announced at Cisco Partner Summit 2014 that it has revamped its Global Partner Network and is moving to what it calls a host satellite model. What this means is that Cisco is lowering the requirements for multi-national partners. For these partners, Cisco will recognize the capabilities that the partner is building in its host country and will reduce the other in-country requirements.
A final point that Peres made about certifications is the simplification of the Customer Satisfaction Score, or customer satisfaction, requirements.
Until now, partners had to maintain a minimum score to retain their certification. Going forward, the company will require a certain number of surveys and positive feedback from customers. However, it's eliminating the minimum-score requirement.
Cisco is making its specialization framework more modular, with core content as a requirement and with electives that partners can customize to fit their business.
Currently, specialization categories with Master levels include Security, Collaboration and Cloud Builder/Data Center. Two more are being added: Enterprise Networks and Service Provider Technology. Partners will see these changes in the next six to nine months.
"One of the value propositions of these specializations is economic because for Master-level certifications, we give VIP [Value Incentive Program benefits] to the SKUs that apply to those specializations," Peres said.
Cisco incents partners to make investments by offering back-end rebates and front-end discounts that can account for up to 30% of a partner's profitability as a business. Going forward, Cisco said it is making some changes that simplify and enrich how it incents partners.
First, Peres said that Cisco incents partners to the tune of $1.5 billion annually. In fact, he said Cisco's 23rd VIP program is still relevant to partners but too complex – it's includes 15,000 SKUs. In August Cisco will roll out its 24th VIP program, paring down the SKU list. It will also incent on software lifecycle activities and will drive more business around key areas of hybrid IT.
Going forward, incentives will focus more on upfront discounts and less on back-end rebates.
Additionally, Cisco announced new Cisco Deal Registration, which brings disparate deal registration programs under one program.
The vendor is also increasing is guaranteed deal differential from 5% to 8%.
"We want to make sure that the partner who brings value to a deal gets the preference and to make it simpler and more profitable," Peres said.
Jud Wells, executive vice president at Bedroc, an aspiring Cisco Silver partner, located in Nashville, Tenn., said he loved the increased guaranteed differential, and he was also excited that Cisco is removing the Silver brand.
"This will help us move to Gold and also help us put more emphasis on Master certifications for our business," Wells said from the floor of Cisco Partner Summit 2014.
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