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New finance options for Cisco partners

Announced last month in Montreal at Cisco Partner Summit 2015, Cisco Refresh, a new program and sales tool, formerly known as Cisco Certified Refurbished Equipment, was officially launched May 12.

Cisco Refresh and Open Pay, a pay-per-use variable consumption model also introduced Partner Summit, are two new financing programs from Cisco Capital that partners can offer customers to help acquire and finance purchases. Both programs are designed to offer customers alternative routes to equipment purchases.

Cisco Refresh allows customers to purchase from a portfolio of about 4,000 remanufactured and certified Cisco products including switching, routing, wireless, IP telephony, security and other advanced technologies, according to the company.

For partners, Cisco Refresh includes the 1 Click Tool (1CT) and the Cisco Refresh Partner Incentive Program (RPIP). Currently available, 1CT blends a customer’s bill of materials with a way to identify the right discount required to close a deal. The new tool also offers a new feature called Watch List to track part numbers with automatic notification. Partners registered in the RPIP may receive additional rebates on eligible Cisco Refresh sales.

Another financing option that partners could use to open doors to new deals is Cisco Open Pay, a variable consumption model for Cisco Unified Computing System (UCS) and select converged infrastructure storage. Cisco Open Pay is currently being tested with limited partner/customer participation in the U.S. General availability is slated for fiscal year 2016, according to Cisco.

Cisco Open Pay is also tied to the Customer Finance Incentive Program (CFIP). CFIP benefits: create incremental profitability for partners; grow revenue for Cisco, Cisco Capital and partners; build ongoing portfolio of business that can be refreshed.

Open Pay allows customers to pay only for what they use with flexible financing for fixed and variable costs. Cisco Capital Open Pay uses metering software to track usage. Customer agreements include a fixed charge for the committed portion only. Additional buffer capacity is provided but only paid for when used. Buffer capacity pricing is predetermined on a price per unit basis.

The new financing option targets purchases for private data centers and on-premise equipment such as UCS, Vblock and FlexPod, initially. The vendor plans to include additional products in the future.

Finance terms vary from customer to customer but Cisco Capital anticipates that most deals will be based on a three-year term with quarterly payments. Deals will include 70% fixed charges and 30% variable charges – variable charges are based on metered usage of UCS blades, or a combination of UCS blades with converged storage, according to the company.

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Channel partners sourcing remanufactured equipment would probably prefer working with a vendor like Cisco as opposed to taking their chances in the gray market. 
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The products are remanufactured and vendor certified, so the customer gets reputable backing.

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