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Partners find niche in Cisco's cloud collaboration applications model

Cisco unveiled a new Web 2.0 and unified communications portfolio along with a partner payout plan for cloud collaboration applications.

Cisco Systems revealed a partner payout plan for its cloud-based WebEx Connect collaboration applications offering Wednesday as part of the release of new Web 2.0 and unified communications (UC) technologies.

Included is the long-awaited Unified Communications System 7.0, an on-demand telepresence application for the contact center, and WebEx Connect collaboration applications.

Partners have eagerly awaited news of how they will fit into the new Software as a Service (SaaS) business model for collaboration that resulted from Cisco's acquisition of WebEx last year. SaaS offerings are relatively new to Cisco partners, who are accustomed to selling hardware with clearly set margins and then generating extra income on maintenance and design services.

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WebEx Connect -- which includes integrated collaboration applications, enterprise instant messaging, collaborative workspace, document management, calendaring and impromptu voice or video conferencing -- is sold by monthly subscription. And because it is based on open APIs, it also offers the opportunity to build a practice customizing applications for either vertical markets or individual users.

The partner cut in collaboration applications

There are two partner programs related to WebEx Connect applications. One is commission-based, and the other is a "collaborative resale" model that is still in pilot but will eventually enable partners to sell WebEx as their own conferencing service and offer the full lifecycle of services.

In the first plan, master and UC partners offering WebEx will get a 12% commission on the first year's agreement, plus 8% if the deal is developed and registered by the partner. There are no volume sales requirements. Unlike those of some competitors, WebEx subscription renewals provide an 8% annuity payment to the partner. Bottom-line meeting services using WebEx start at $59 per month, but range up higher depending on add-ons, and there are plenty of those.

"There may be more immediate reward to selling a hardware solution, but there is better long-term retention when it comes to offering WebEx," said Dave Elsner, vice president of sales and marketing at Cisco partner Nexus IS in Valencia, Calif. Elsner added that there is strong incentive in the combination of lifetime commission for renewals and the ability to continuously develop customized applications.

Cisco has trumped Microsoft when it comes to partner payout for cloud services. Microsoft partners get a 12% margin on the initial buy-in and a recurring 6% for the length of the contract when they bring customers to hosted Exchange Server, SharePoint, Office Communications or Live Meeting services. Cisco's WebEx Connect applications will directly compete with some of Microsoft's cloud offerings.

"We can't scale WebEx Connect without the channel," said Alex Hadden-Boyd, director of marketing for Cisco's collaboration applications group, explaining why Cisco has laid out a clear partner plan.

While the collaborative resale model is still in limited pilot, it is already being used by Cisco's telephony-oriented service providers, who can offer WebEx Connect services from their own networks. Eventually, value-added resellers (VARs) with the right resources will be able to do the same.

"Cisco is talking to us now about a customized [resale plan]. We would resell the WebEx client under the Nexus brand and then all of the servicing would come through Nexus," Elsner said.

In the meantime, there are also opportunities around customizing collaboration applications for WebEx Connect. Beyond the basic conferencing and social networking applications, WebEx connect offers mashup capabilities that enable enterprise users to pool their own information resources with incoming data streams from other companies and Web portals. That's expected to be one of the strongest areas for customization. One example would be enabling a healthcare company to integrate medical research from numerous online journals into one on-demand feed for users.

"Off the shelf, there are 20 widgets, including RSS feeds and wikis," Hadden-Boyd said. "Partners can also create widgets that allow then to do things like have integrated into team space."

WebEx training is available to all partners specializing in UC, and is a requirement to sell the applications. Cisco will launch a series of Web 2.0 Integration Workshops for its UC partners beginning in November.

UC 7.0 goes mobile

Like WebEx Connect, Cisco's UC 7.0 aims to integrate into a wider array of business software by using "the network as a platform." Upgraded unified communications applications can also be securely accessed by mobile and fixed devices.

"Our network platform uses open standards protocols to expose collaboration services such as presence, instant messaging, call control and policy to a broad range of devices and applications," said Don Proctor, senior vice president of Cisco's software group.

Unified Communications System 7.0 can be integrated into desktop products from IBM and Microsoft. With an open network security device, UC applications can be extended to remote workspaces. What's more, the Unified Mobile Communicator enables devices running on Windows Mobile as well as Symbian and BlackBerry to play in the UC mix.

Elsner said Nexus will sell enterprises a combination of WebEx and UC 7.0 so that, for instance, customers with contact centers can make use of presence, chat, automatic voice or video conferencing and shared workspace to handle incoming requests.

It's all about the video

These days, Cisco takes any chance it can get to promote video applications. So Wednesday's release also included TelePresence Expert on Demand, a customer service application that enables remote branch users to launch impromptu video conferencing sessions with subject matter experts at a main site. For example, a retail bank could provide video conference services to bank customers in any location via Cisco TelePresence without having to place highly trained resources in every branch.

"Customers could go into a kiosk and have a small telepresence screen where they could pick the appropriate expert and have a conversation," Hadden-Boyd said.

Cisco's UC 7.0 release and the TelePresence Expert on Demand are available immediately. WebEx Connect is currently available as a desktop and Web-based client with mobile clients available in early 2009.

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