Collaboration opportunities are a hot topic at this week's Cisco Partner Summit. Cisco Systems unveiled a barrage of new unified communications and collaboration technologies and partner programs.
The collaboration market has the potential to be a cash cow for partners, according to Cisco executives. Richard McLeod, Cisco's senior director of collaboration solutions for worldwide channels, claims the market is $34 billion.
But Cisco needs to put the right pieces in place for its partners to succeed in this market, and partners need to realize that selling collaboration is not like selling routers and switches.
"The biggest problem is that these [products] aren't just boxes. They're software," said Maribel Lopez, principal of Lopez Research. "And software is more useful to someone if you can talk to the customer about how it can change the business process."
Lopez said Cisco needs to make sure its partners know how to talk to prospects about business processes. She said a technology like WebEx Connect is generally something that business unit managers are going to buy, so partners need to be prepared to talk to them rather than to IT managers.
"Do [business unit managers] think they need it? Channel partners need to give them a reason, especially when there is so much cost-containment pressure over the past year," she said. "From that perspective, this is a complicated sale."
McLeod said the key to making sales with collaboration in the current economy is to emphasize that the technology will help customers emerge from the recession in a better competitive position. "Will all customers be ready today?" he asked. Probably not, but "some see the storm clearing." Those customers will view video and collaboration as an opportunity to come out ahead.
Cisco made the following partner program announcements at its partner summit this month:
- General availability of its WebEx authorization for Cisco Advanced and Express Unified Communications partners in North America and Europe.
- A new pilot program for Cisco TelePresence, offering select UC Advanced partners the chance to sell and install single-screen endpoints for TelePresence. The pilot program begins in the U.S., with other geographies added throughout the year.
Cisco also announced new products and licensing options that will allow partners to offer customers cheaper communications and collaboration technology. This includes a new Cisco Unified IP Phone 6900 Series that ranges in price from $235 to $295. Most IP phones on the market tend to price around $300, albeit with a few more features.
Cisco also announced a new Cisco Unified Workspace Licensing Entry Edition, a bundled offering with Unified Communications Manager support for a single hard phone, single-number reach mobility and Cisco IP Communicator. This bundle starts at $245 per user. These products are aimed at small and medium-sized businesses (SMBs), workers at large companies whose communications needs aren't as intensive as most information workers, and some overseas markets that are more price sensitive.
Stefan B. Rohr, CEO of FusionIP, an Advanced UC Cisco partner, said his company is close to being an authorized reseller of WebEx. He anticipates that he'll be rolling out WebEx to his customers in July or August. Rohr acknowledged that selling collaboration technologies requires an ability to engage with a company's CFO or CEO, rather than the IT organization. But he said his company has plenty of experience in this area. He said 90% of his company's business is in the advanced communications space. While he resells routing, switching and even cabling, those are usually only one part of a larger overall deal.
"Our business is to help people save money or to help people make money, depending on who we talk to," Rohr said. "If we're talking to the CEO, he likes to hear that we're helping him make money. If we're talking to the CFO, he likes to hear that [he's] saving money."
Although Rohr is jumping into WebEx, he said he has no plans to try selling TelePresence.
"It's something we may do in the future, but in this economy we're just paying bills right now," he said. "Any new marketing dollars or anything that we're doing is all going to be around what we can support on staff." "I don't want to get into something where I have to trust somebody else or partner with somebody else to get something done," Rohr said. "My engineering staff that I have on payroll is not very well versed in TelePresence. If I'm going to sell somebody something and have it work, I need to have the staff to support it. Cisco is a big help, but their communications and support infrastructure isn't always the greatest on advanced technologies, so I like to have it in-house."
The new low-cost options, such as the 6900 Series of IP phones, help Cisco compete on price with companies like ShoreTel and Mitel, Rohr said. But he said Cisco's reputation as a large vendor sometimes scares off customer prospects in the small business space.
"We went into this deal against ShoreTel … and we came in with less money by $500, but companies are so afraid, especially on the smaller side," he said. "This [prospect] had 40 employees. They were so afraid that Cisco is this humongous company and that they're too small. Their email back to me was, 'Cisco is way too big a company, even though you came in lower. We're not a big enough company to have Cisco and support them.'"
Rohr's argument is that Cisco might be a big company, but if the price is less and it does the same, and more than the SMB competitors, then why not go with Cisco? He said Cisco has invested in SMB-focused companies like Linksys and added sales, support and engineering staff to focus on SMBs.
That said, sometimes small deals can fall through. The deal Rohr lost to ShoreTel was probably worth only $15,000 to Cisco. Sometimes, the support resources that Cisco offers its partners aren't there for deals that small, he added.
"If Cisco has a guy working small opportunities and his quota is $1 million to $2 million, if he's looking at a $15,000 deal, he's not going to spend as much time on it as he would on a $100,000 deal," Rohr said. "That's fine. I've got to do my job. Cisco is a box pusher, and it's my job as a business owner to sell the product and get it installed and make sure the customer is happy."
Let us know what you think about the story; email: Shamus McGillicuddy, News Editor