View From The Top: Keith Goodwin Checks In

On Economic Recovery

"I think back to Partner Summit a year ago and we were really in the trough -- things were looking pretty rough from a global perspective. Partner Summit one year ago was all about what are we going to do to help partners survive, so we launched our Navigate to Accelerate initiative and talked about our stimulus package for partners. It was very much survival. But we purposely built the theme as navigate to accelerate because every downturn has an upturn."

On Driving Partner Growth in 2010

"Our secondary message to partners was: Let's prep together for the upturn. Not only can we navigate to growth but accelerate when the environment does improve. Well, we've seen that acceleration, and what we're excited about is that partners are in a totally different mindset. They're looking at taking advantage of these trends in the industry, and we're looking at how do we translate that into growth in the short term and growth together in the long term."

On The Public Ending Of HP's Cisco Reseller Agreement

"We wanted to be very clear that this is about competing with HP in the future, but it's really about ensuring there's a transparency around the fact, for our partners and customers, that we have very different visions around where the market is going. Ours is very much a network-centric vision, and HP has a different vision. I wanted to be very clear that that was the basis of what we were doing. We have different views of the role of the network. We're acknowledging that we will compete with HP going forward.



"And last, and very importantly, I wanted to get out there directly to our customer and let them know that through this change, our first priority is to ensure customer business continuity and ensure them directly and personally that we'll do whatever we can to make sure that continuity is there. We will be working closely, and working closely with HP to negotiate a new agreement that protects those existing customers."

On Channel And Media Perceptions Of Cisco vs. HP

"It's a bit of clash of the giants, and that's something that gets people's interest. Do you guys make too big a deal of it? I don't know, because you have to think about that in the context of your business. For us, competition is a great thing. We love competition. HP has clearly declared its intent to be a broad-based competitor to Cisco in the space. Competition makes us better. It's about having a very clear message that we will compete with HP, but we'll focus on the needs of our customers and align with the needs of where we see significant market inflection points. We think that's the right approach. That's what we want to stay focused on, but we recognize is certainly is a topic of interest these days."

On Cisco's And HP's Differing Views Of The Network

"We have different visions of the world and different views of the network in the significant market trends going on. We're value-focused, and we're enabling and incenting partners to deliver value with customers. It's not fulfillment-based and it's not volume-based, it's about value, about moving up the stack.



"The old days were about products and systems, and today is about solutions and architecture and the vertical knowledge to apply that. By working with our partners to focus on delivering value in those areas, we allow them to grow, and that's what's going to allow them to be differentiated. That's where we're putting our focus with the channel. I'm not sure what HP's doing, but our focus and priority is clear."

On Earning Partner Loyalty

"My philosophy is very simple: Our goal is to earn -- earn our partner loyalty and investment every day. The keyword there is earn. We're not there demanding it, we're not there focused on 'you have to be loyal,' it's about earning it. The way we're going to earn it is by sharing a compelling vision around these different markets -- these markets in transition that we think represent huge opportunities for us. Data center virtualization is clearly one of those. Our view of how data centers virtualize going forward has the network in the center. HP has a different view of that. We want to share in a compelling way with our partners and inspire them to invest in our vision."

On VARs Pushing Cisco-Only Solutions

"Our partners are, in many cases, multivendor -- OK, most cases, multivendor -- and they'll have to determine how they'll work in a multivendor environment going forward. I think many of them see a value proposition in the fact that they are multivendor. We are very supportive of that. We want to inspire them to align and invest in our vision, but at the end of the day, they make the investments that are right for them and their customers, and think the value proposition is in an integrated offering in some cases."

On Top Line And Bottom Line Growth

"One thing I heard very clearly from partners six months ago, when we started to think the economy was turning, was "Keith, we're excited about returning to growth top line but don't lose sight of the fact that we want to grow bottom line as well. So if you think about programs and initiatives that drive and accelerate top-line growth, you have to make sure you also stay focused on our profitability, our margin. As we're creating this acceleration phase, we're focused on top- and bottom-line. That's critically important to why would partners want to invest in Cisco vs. someone else. They see a compelling top-line and bottom-line opportunity for growth."

On Significant Market Transitions

"The five include collaboration, which is a significant transition, and video, which is a significant transition. Virtualization is another, and that's going to be the enabler to a lot of cloud-based services. Borderless Networks is another: That concept of any content to anyone, anywhere, anytime, is a vision that we established some time ago and we have been building with our partners. Another is clearly cloud, and, which gets to your point, the idea of everything as a service. Clearly, our partners have a vision to bring more services to market, and many of them offer support services, most offer higher-level consulting services, and many have started to offer managed services and outsourcing services."



The growth is significant also in applications-as-a-service, X-as-a-service, whatever that's going to be. I heard a great quote from a partner last week: 'The whole services thing I'm excited about, but it scares the [silent pause] out of me.' So it's a new business model associated with it. The ideal partner wants to evolve with us to embrace that trend.

On UCS As A Game Changer

"I'll go back to the days when we entered the voice world. The quotes all over were, 'What does Cisco know about voice? What does Cisco know about telephony?' And our approach -- and this example really exemplifies it -- is that it's never about competing under the existing rules of a market like that, it's about embracing the market transition and creating a new set of rules. That's what we did in voice and that's what we're doing in the data center. It's not about competing on servers, it's about our architecture to support and create the next-generation data center. At the heart of our architecture is the network."

On UCS In Volume Distribution

"We recognize that as part of that architectural play, with our goal and focus based around the value part of that with UCS, in order to have the kind of breadth of product line we need to support the data center, we also have to have servers you might typically classify as volume. So it's both a value and a volume play, but all supported by our architectural view of how they integrate. Recognizing that that's what we need to do to be effective in bringing that architecture to the customer, we have to embrace the routes to market that get us there, distribution being part of that. But distributors who you might think of as volume distributors are focused on the value components as opposed to just pure-volume focused."

On The Growth of UCS

"We have well over 400 new customers for UCS, and the partners have hugely invested in our vision. One thing I feel so good about and will be acknowledging at Partner Summit is that in an unbelievably difficult economic environment last year, partners invested in Cisco and invested in our vision of the data center, big time. I can share some of the specifics with you later, but they invested significantly and as a result, we're getting traction. We're winning deals with the C-series especially now flowing into distribution. The distributors tell us that there's lots of demand out there, and that's exciting for us."