Partner Summit Awaits: 10 Big Questions For Cisco4:00 PM EST Tue. Apr. 10, 2012
Cisco is always a magnet for tech industry discussion but at this year's Partner Summit, which kicks off April 16 in San Diego, there are a number of topics that should be top-of-mind for Cisco's thousands of solution provider, MSP and integrator partners. From Cisco's small-business investment to its competition with Huawei and questions of software-defined networking, here's a look at some of the major talking points.
Cisco promised to remove $1 billion in operating expenses over the past year as part of its corporate restructuring. When word of that cut first came nearly a year ago, many partners feared that Cisco's traditionally healthy channel investments would suffer.
Not the case. Cisco invested new money in the channel in the form of a program called partner-led, which is seeing about $75 million in new Cisco channel resources related to incentive programs, a partner relationship management system, and various marketing, sales, training and engineering resources. Headed by former Cisco small-business channel ace Andrew Sage, now vice president worldwide partner-led, the strategy theoretically promises more Cisco business to SMB and midmarket customers with Cisco partners driving the bus.
Cisco also has continued with product and service launches for SMB -- its OnPlus managed services offering has been well-received -- and more details specific to partner-led are expected at this year's Partner Summit.
Flash back to 2009 and Cisco's Partner Summit in Boston, and HP was mentioned so much by Cisco during the show that you'd think it was an advertiser. "We are competing with HP. Period. End. It is competition," said then-North America channel chief Wendy Bahr in that conference's most memorable turn of phrase.
Fast forward to 2012, and Cisco hasn't lost an ounce of competitive aggression for HP. But it also seems to have a new nemesis: Huawei.
Cisco CEO John Chambers has painted Huawei as Cisco's most formidable long-term competitor and at a recent event slammed Huawei as not always "playing by the rules" when it comes to intellectual property protection. With Huawei hard-charging at Cisco's territory -- it kicked off a major enterprise networking push in North America last year -- expect Cisco-Huawei to be the next great enterprise networking industry rivalry.
VCE is among the channel's most fascinating experiments: a joint venture of networking, storage and virtualization powers -- Cisco and EMC, with buy-in from VMware and Intel -- committed to the rapid creation of very tightly integrated data center stacks that are sold to customers, often as the basis for private clouds. Starting out, VCE suffered from deal-registration headaches, sales conflicts and more. But there have been been signs of a turnaround, even though, according to available financial data from Cisco and EMC, VCE is still being operated at a substantial loss. Analysis pegs Cisco's share of that loss at about $165 million cumulatively -- not an enormous amount but not quite small potatoes, either.
Rob Lloyd, Cisco's executive vice president, worldwide operations, told CRN in a recent interview that VCE is a success. But behind the scenes, Cisco sales executives and several partners continue to grumble about the challenge of VCE-related deals, especially when Cisco has seen success with its Unified Computing System in other contexts. Overall, VCE continues to bear watching.
It's no secret that in the past three years Cisco has lost some pretty well-known executive-level talent, from channel chiefs such as Luanne Tierney, who jumped ship to Juniper, to longtime technology practice leaders like Manny Rivelo and Ian Pennell, both of whom measured their Cisco tenures in decades. The ongoing Cisco exodus hasn't slowed all that much in the new year, either; Laura Ipsen, former senior vice president and general manager, Connected Energy Networks, bolted Cisco for Microsoft in February.
Still, turnover is a natural occurrence at big technology companies, and when pressed about the issue recently at a Wall Street Journal conference, Cisco CEO John Chambers was nonchalant. "We've lost very few people that it wasn't time for them to move on," he said.
Cisco's channel incentive programs, from VIP to OIP, are highly regarded by partners for how they can add substantial margin to Cisco deals -- even if, from an execution perspective, they can be an administrative headache. Having recognized the importance of these programs, Cisco two years ago inaugurated a new one, the Teaming Incentive Program, designed to reward partners for the work they did earlier in the sales cycle. TIP stumbled out of the gate, however, with many complaining it was too challenging to align resources with Cisco's field sales team in a way that would help them recognize TIP rewards.
Jim Sherriff, senior vice president, U.S. and Canada Partner Organization, told CRN in a recent interview that many of TIP's loose ends are now tied up. "We hit the knee of the curve about 90 days ago," Sherriff said in January, "and it has really taken off, with our partner community truly understanding it, and how it's different from OIP. The biggest challenge was getting our own sales force to understand TIP, and we've started to see the change in that direction."
Amanda Jobbins took over as Cisco's vice president, global partner marketing, last summer, stepping into a role that was broader than that of her predecessor, tasked with continuing Cisco's highly regarded WWPO marketing programs and aligning Cisco's partner marketing resources with those of its corporate initiatives. Jobbins, to her credit, roared out of the gate, promising solution providers that they'd see everything from tailored cloud marketing programs to fresh funding, high-touch assistance with social media and access to integrated campaign consultants to assist their marketing efforts.
Solution providers that attended Cisco's recent Partner Velocity event in Las Vegas spoke highly of Jobbins and were encouraged by the programs, but told CRN they're also always wary of too much talk, too little action. A year from know, we'll know if Cisco delivered on Jobbins' promise.
Cisco has been fairly quiet on the security front, although behind the scenes much appears to be happening. Among the most interesting recent moves was the creation of a senior vice president-level position for running Cisco's security engineering functions and the hiring of Chris Young, who, following highly regarded stints at VMware and RSA, now heads up Cisco's consolidated security businesses.
Young's hire, however, doesn't address the question of Cisco's next move. In its most recent Magic Quadrant for Enterprise Network Firewalls, researcher Gartner took a stab at it: "The ASA line is becoming somewhat dated, although Gartner expects Cisco to ship new models and software in 2012," the report stated. "Cisco has continued to consolidate its security products into a single business unit, and Gartner believes Cisco has had a significant effort under way to develop a [Next Generation FIrewall] product (and accompanying appliances) as a successor to the ASA firewall."
One by one, challengers to Apple's mighty iPad have been released and, almost just as quickly, they've been crushed, especially as the iPad enters its third version and continues to make inroads with enterprise customers. While Cisco's Cius, the Android-based tablet that finally hit general availability for Cisco partners last July, hasn't met the same fate as, say, HP's crashed-and-burned TouchPad, there's little indication among partners that it's caught on with business users. Is Cisco worried?
"We don't think everyone's going to buy a Cius tomorrow," said Richard McLeod, senior director, collaboration sales in Cisco's WWPO, in a December interview with CRN. "But if we get 10 percent of what's projected for growth in the Android tablet devices, that's easily a million devices for us here in a couple of years."
It remains to be seen whether Cisco keeps plowing resources into Cius or focuses on optimizing Cisco UC and other networking applications for the iPad, as so many of its competitors have done.
John Chambers has been CEO of Cisco since January 1995 -- a 17-year reign matched by very few of his Silicon Valley peers -- so the questions of succession at Cisco are a perennial head-scratcher. Industry speculation held that Cisco's challenging 2010 and 2011 would spell the end for Chambers, but Cisco's lengthy restructuring and consequent bounceback have a lot of those same pundits just about ready to call it a turnaround. Sources familiar with Cisco's palace intrigue tell CRN and industry watchers that Chambers has shown little interest in abdicating the throne, even though at the 2010 Cisco Partner Summit, he said five more years.
No one particular potential successor has emerged, although many solution providers are strong supporters of Rob Lloyd, Cisco's executive vice president, worldwide operations, who is a fierce channel advocate and is often short-listed as an internal candidate to follow Chambers.
The notion of software-defined networking has become a hot topic of discussion, and it isn't lost on a few solution providers that the Open Networking Foundation's second major conference is also taking place the week of Cisco's Partner Summit, albeit nearly 500 miles away.
Cisco's position on SDN, a market that's drawn substantial VC interest and caused some very notable executive defections to key start-ups in Silicon Valley, is somewhat unclear. But rumors persist that Cisco is involved with an SDN startup called Insiemi that's been described as a potential "spin-in" -- that is, a start-up company in which Cisco is investing and will later acquire. Expect a few questions for Chambers about Insiemi and SDN during the conference.
Cisco Partner Summit:
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How Cisco Got Its Groove Back
Five Cisco Product Line Tweaks For SMBs
10 Key Cisco Channel Events From The Past Year
Cisco Sales Boss: Partners Don't Trust HP Or Huawei