Q&A: Cisco's Chuck Robbins Shoots Straight6:15 PM EST Thu. Oct. 20, 2011
Cisco's ongoing corporate restructuring has meant executive departures galore and plenty of changes in the networking titan's corporate ranks. But perhaps no single move is more relevant to Cisco's Americas solution provider community than the ascent of Chuck Robbins, the well-known former U.S. and Canada channel chief and now Cisco's senior vice president, The Americas.
As part of its restructuring, Cisco pared its nine global sales theaters down to three, placing a single decision-maker in charge of each. Robbins' new role means he's in charge of all Americas sales -- which represent about half of Cisco's $43 billion dollar annual revenue pie -- and manager for all Cisco sales theaters within the Americas. Jim Sherriff, senior vice president of Cisco's Americas Partner Organization now reports directly to Robbins, who has ultimate oversight on sales and resource allocation to Americas-based channel partners.
To hear Robbins tell it, Cisco's plan for making itself easier to do business with and driving more overall business through the channel isn't complex or overthought, it's all about consistency. He's a firm believer that Cisco has a better story than anyone when it comes to data center architecture, business conversations and solving paradigm shifts like cloud and mobility, and it's his intent to ride Cisco's sales teams and solution provider partners to execute behind those Cisco strengths.
Robbins joined CRN Senior Editor Chad Berndtson for an exclusive conversation on how he's looking to motivate partners. Excerpts follow:
Now that you own the Americas number outright, what are you telling partners? What do you want them to take away from your strategy for growing Cisco's Americas business?
I think we're all fortunate in that our opportunities are probably greater than they've ever been with our customers. We're in a great position relative to market transitions around cloud, around mobility and around what's happening in the data center, and the entire move to collaboration. I think we have a great opportunity with our customers right now, so that's the first thing.
The second thing I think it's really important to understand is that in these uncertain times, from a customer perspective, we have the benefit of having solutions that apply to our customers whether they're in cost-containment, op-ex reduction mode and need to streamline their operation, or whether they're working on productivity and growth.
The truth of the matter is that many of our customers are trying to do both right now. What I believe is that these market opportunities that we have with our customers represent such a great opportunity for our partners because our customers want to participate in all of them. For the first time in a long time, I get the sense our customers just can't get their hands around them fast enough, which creates huge opportunities for partners to help them and build around services, which creates higher profitability for our partners.
From a strategy perspective in the Americas, with my team, we're talking about the opportunity to execute more consistently, with our partners, against the opportunity in our customer base. If you're looking at cloud, looking at mobility, looking at security, looking at customers moving to virtual desktops, looking at all the activity in the data center and the energy around collaboration, I don't believe we need an incredibly complex strategy. I think right now we need to execute with partners against the opportunity. That's the message for our team.
In the last few months we've heard a lot about Cisco slimming down, getting simpler to work with, gutting some of the processes and the red tape for things like deal registration and the incentive programs for partners. What's happened between then and now to make everything simpler? Especially in the Americas, how is Cisco a simpler organization?
From the channel perspective and the partner community, in our last couple of fiscal years, we've had four different theaters -- which are operating units in our sales [organization] -- operating within the U.S. alone. That created complexity. For our partners, whether they were working in the commercial space in the U.S., the service provider space, enterprise or public sector, you had four to five different teams you had to engage with and you might have gotten different messages around priorities from those different organizations. In coming together, the partners will see a single strategy, with Jim Sherriff, leading our partner organization that can now be integrated as one team. That's the first thing I think will prove simplification to our partners.
The second is we are pushing decision making and accountability mostly through the customers and partners. The partners should see faster approval on deal structure, faster resolution on registration, and that allows us to move more rapidly relative to investments both with our people supporting the partner community as well as around partner programs. We come together as one team. It allows Jim and our partner organization to sit at a table and discuss priorities and program initiatives, and we have one table where that decision gets made as opposed to [Jim] having to work with the public sector team, the enterprise team, the commercial team and the service provider team, if that makes sense.
Next: Robbins' Reporting Structure, Cisco's Partner-Led Strategy
Why the decision to have Jim, and I guess by extension the Americas channel sales organization, report into you instead of the Worldwide Partner Organization? I know it's a solid line/dotted line situation with him under you now instead of Keith [Goodwin], but why make that change?
Well, we're moving to virtually a P&L model for the three geographies around the world. The Americas will be somewhat of a P&L view, so it allows us to make investment decisions. In the past, the different organizations would make their requests for resources and investments independently, and what this allows us to do is look at it holistically and move and reallocate resources as we need to based on the opportunity we see.
An example of that would be in our U.S. commercial business where [Senior Vice President, U.S. Commercial Sales] Allison Gleeson has worked over the past few years to move more of her resources into higher-touch [sales] and is working with Jim Sherriff more closely on a very focused implementation of what we're now calling the partner-led strategy. Bringing those teams together, we can make those decisions, and Allison has made a decision to shift resources into Jim's organization based on her belief that that's a more optimal coverage model. I think you'll see more of that.
More resources shifted, you mean?
Well, and the ability as part of one team to make those decisions. If one of our businesses is exhibiting greater growth than others, we have the ability to move resources more rapidly. If we need to, we look at dynamics in the marketplace that require us to tweak certain programs. We can make those decisions much more quickly together.
We've talked a lot with Cisco about resources headed for the partner programs and partner enablement going forward, and I had a chance to talk with Andrew Sage about the partner-led program and the $75 million investment, and also with Rob Lloyd earlier this year. He was the first to confirm to us that even with the broad restructuring, Cisco partners would see more resources, not fewer. Is it fair to say that it's you who has ultimate oversight for what resources to go the channel in the Americas?
Yes. We'll make those decisions as a team but ultimately I'm the one responsible and accountable for those decisions. I believe that our teams understand how to run their businesses, and we spend a lot of time together looking at opportunities. The example I gave you with Alison and Jim, they came to a conclusion that it's much more effective for us [this way]. It's the same decision that's been taken this year in the public sector business -- state, local and education in particular -- where we're implementing and taking advantage of the work Andrew Sage and the team have been doing in this partner-led model to try to optimize our coverage and get more capacity in the partner-led space within those businesses.
Let's look a few particular segments, starting with public sector. It's no secret that public sector has had a tough go of it, particularly on the state and local side, and that's not something unique to Cisco. Talk about your efforts to jump start public sector sales through partners.
The one thing we believe is that our team, aligned with partners, will continue to get good wallet share and most likely increase the wallet share we get from our customers. We're looking at how do we deal with the changing consumption demands from our public sector customers. many of them want and need op-ex oriented models, cloud-based solutions, as-a-service solutions. We need to work with them to understand what their business imperatives are and more importantly how they need to acquire technology which is most likely different than traditional cap-ex models. That's one of the key areas we're working on.
That cap-ex to op-ex shift and the embrace of as-a-service, is that happening all over the Americas?
It is happening all over the Americas, in pockets. We see the U.S. federal government as a big earlier adopter of cloud-based solutions. We see many of our customers adopting infrastructure-as-a-service particularly for application development agility. We see many of our customers looking at specific applications being delivered as-a-service, and we see obviously our service providers and systems integrators and partner community beginning to take advantage of this opportunity to expand their business portfolio to meet the changing needs in our customer base.
Next: Segments Where Cisco Partners Should Place Their Bets
Are there specific vertical markets or segments growing faster than others within Americas? Certainly we've seen the uptick in video and what's special for Cisco in the collaboration space, but are there pockets or pieces of the Cisco line that you'd highlight as particularly strong in Americas?
The major transitions that our customers are dealing with are how do I make the transition to the elements of cloud and as-a-service, but all of our customers are dealing with pervasive mobility. The bring-your-own-device issue is there, and the security implications that creates. Every customer also has a data center initiative under way to not only optimize their data center infrastructure and become more efficient but provide more agility to the business.
We believe that the data center play in conjunction with virtual desktops will be a key element of how our customers deal with the security implications of this mobility issue that I've talked about. Then there's the collaboration and business video opportunity. Our customers are no longer asking whether they should have a business video strategy. It's simply: How do I implement and when do I implement? All of those customers are looking at core network refreshes, which are obviously good for us and good for our partners.
Cisco has had a class of video partners that sold telepresence, and gained a number of folks with the Tandberg acquisition who had A/V integration and video backgrounds. As video has grown, has the net number of video partners continued to increase since Tandberg? Are you seeing substantially more partners adding video to their line card?
I think it's a natural extension for our partners that have had UC practices to begin to pick up the video solutions, primarily because we see the customer making decisions between video-enabled handsets and video-specific devices. We always had a strategy that we want to open up technologies for our partners in a way that provides a great profitability opportunity and the need to create a business proposition. That's what we continue to look at as we move forward in any market, particularly video.
When the announcement came down that with the restructuring you would own the Americas number and Jim and a lot of the channel heads in the Americas would roll up to you, I think there was confusion among partners who thought a lot of the channel program and resource discussion would come solely under you and less so Keith, Edison and the WWPO. It sounds like that's not the case, but can you talk about how it's different than before? Why and how?
Keith and Edison and the team continue to own the overall program definition and the program evolution in our partner community. The advantage for them is they have the three geographies around the world to engage with to make sure we're aligned around what we want to accomplish. If there's a funding element it gets funded by the geographies and obviously we want our team to be bought into it and then to be supportive on a daily basis with whatever we're trying to roll out. It's a very collaborative process we go through.
We will have discussions about what we need to do as a geography in the Americas to make sure we're supporting the programs and that they are aligned around our team's behavior. An example would be the Teaming Incentive Program that we recently rolled out. We had some challenges with our team not understanding it, and not approving deals in a timely fashion. Edison and Keith and Jim and I agreed we'd put out a mandatory training for all of our teams around their responsibility in making sure this Teaming Incentive Program was successful. We worked together and will continue to do so.
So are those as-needed type of discussions or is it safe to say you're in constant touch with the WWPO?
Jim is a virtual member of their team as well as our team, and he's engaged in every staff meeting and the weekly forecast calls. He's the bridge, but we have discussions on broader issues as needed. There is active involvement weekly between our organizations.
We've talked about partner led as a strategy and selling motion that the small business and midsize-focused partners have been used to for a while. In your words, what's partner-led going to do for commercial partners? You know their mentality well from running the commercial sales organization for Cisco in the U.S.
I think that what it really means is greater systems integration, greater support, more focused programs and a greater acknowledgment by our field organization as to how we're going to go to market in these areas. Number one, we've had teams that have been operating in this way in the field for a couple of years. Alison Gleeson has been working on a model similar to this, and Bruce Klein, who runs public sector, is looking at taking advantage of this moving into our fiscal year. The biggest difference, and the thing that's going to make this come to life, is system investments: the programs, the rewards, and all the things Andrew and his team are working on.
Next: Robbins' Views On HP, Juniper, Huawei
You mentioned earlier that you're seeing great appetite by customers for Cisco solutions and that they are getting the messaging around Cisco's architectures and how that's a business conversation. At the same time, Cisco is challenged in a number of ways that perhaps it wasn't previously, or perhaps wasn't as voraciously when you ran the U.S. and Canada partner organization. Is Cisco a harder sell for partners these days? You're faced with a stronger Juniper, HP, and a lot of other folks looking to challenge you a lot more aggressively. So is the selling climate for CIsco partners more difficult now than it was a few years ago?
I think it depends on how we are approaching our customers. We really have the ability with our collaboration portfolio and our data center solutions to work with [customers] more around business imperatives. When we begin our engagements with customers with a true understanding of what are their business priorities, what the challenging issues are and how to apply technology to solve those challenges, customers are less likely to shop for a solution on price.
That being said, we've clearly seen more competitive pressure in the last couple of years, and if you go back through the years, we've always had competitors, all the way back to 3Com, Wellfleet, Bay Networks, Cabletron. It's not new to us. HP in the last few years just happens to be a little bigger than some of those we've competed with in the past. But where we're selling with the business discussion we've been very successful.
Is HP all that different from previous large Cisco challengers? Certainly HP's size and breadth gives it an advantage in certain situations but it doesn't sound like the competitive climate is all that different from what Cisco has seen before.
Well, they've come at us in a very similar way, which is just price. So if we work to highlight and our customers understand the value of what we bring to them, then our partners understand and believe that we've been very consistent with them for many, many years. We haven't wavered in our go-to-market with the partner community. We haven't had years where we're in or we're out -- we've been very consistent with our partnering strategy for the last 10 years. We have a history of creating market opportunity and taking our partners and working to build out those opportunities whether in unified communications with VoIP and now the whole unified compute environment.
In order to create those markets we have to invest significantly in R&D. We want to invest in network innovation to create markets. My perception is that HP's ultimate objective is to drive commoditization because that plays to the only proposition they have for the customers, which is not good for our partners.
Are partners actively seeking your advice and Jim's on how best to engage in those competitive situations with HP and Juniper? Are you looking for them to be more aggressive?
I've been pushing our partners around an aggressive response to any of our competitors, and particularly HP, for the last few years. So I tell them the same thing I told you. When we're really focused on how our customers achieve their business objectives, we have less competitive pressure than we would otherwise.
As it relates to Juniper, I think Juniper has classically been more of a service provider infrastructure player, and while they've made attempts over the last probably 10 years to move into the enterprise, and had some success, they've not had great success in penetrating our enterprise customer base nor our partner community. We don't see them as a major channel competitor, to date.
How do you view Huawei? They're going live with a U.S. partner program, and they've had their reasons for not making gains here, but they're not a startup, they're a $28 billion networking vendor. John Chambers and others have called them out publicly as a major competitor [to Cisco].
Well, as a company we clearly see them as a long-term competitor as John has stated. Primarily we've seen them with strength in emerging markets and particularly in the service provider space. They have a limited presence in North America and we haven't seen them much to date. At this point they do not have a strong channel presence. So we'll see how it plays out, but obviously we're watching them closely.
Do you view them as competing on a price discussion, as you do HP?
I think Huawei comes at the market from different perspectives. I think in some cases they come at it from a price perspective, in some cases in differentiated business models and in some cases with an attempt at differentiated technology. But again, we haven't seen them that much so we'll see how they approach this market.
Next: A More Outwardly Aggressive Cisco
Overall with regard to the competitive piece, Cisco has been a lot more explicitly aggressive lately, particularly against HP and Juniper. A lot of your executives have made public reference to Cisco getting more aggressive, and dishing back a lot of the competitive rhetoric we saw from both [HP and Juniper]. Why does that help you? Cisco's been traditionally less prone to attacking competitors in the public space, and taking more of a high road.
Well, I think that when I view what our competitors have said about Cisco for the last few years, I think our employees, our team and our partner community have been frustrated with the commentary and some of the public attacks we've taken. So we're trying to be balanced but crank up the competitive spirit of the business with our employees and our partner community.
Frankly, we want to engage our customers and partners to help them fully understand what we believe is the reality of what our solutions can do for customers through our partners, as opposed to what our competition would tell them. That's why we want to be a little more public with our position on certain issues.
So it's definitely a strategy to be more public with Cisco's position there than in previous years?
Well, I think that's fairly obvious.
What I've heard from partners especially since a lot of that started is that it gives them the air cover they need in these competitive situations. But I hear other partners say that Cisco is giving away the competitive high road it's always had and that you're also acknowledging the stepped-up threat from HP and Juniper, competitively speaking. Can you respond to that?
I think that as we all get a little bit more vocal, we'll find what balance we need, because we want to ensure that our customers and partners understand our position on many of these issues being raised by our competition. We'll find the balance over time, and much like our partners, we have some employees who really love it and some who are…it's new, so people are trying to get used to it. We'll focus on the issues and focus on our partners and customers [so that they] understand our position on these issues.
Do you anticipate any further additions or subtractions to your team? Are all the theater heads in your organization in place at this point?
Yeah, our organization is well defined. And our leadership team is in place and right now it's all about executive and working more closely with our customers.