Cisco Systems To Channel Partners: Make Your Choice

The vendor this week at its annual Cisco Partner Summit will launch the next evolution of its Channel Partner Program, introducing changes that will push solution providers to make a choice between two business models: carrying a broad range of technology expertise or taking a deeper dive into given technology specializations.

At the San Diego conference, Cisco executives also plan to showcase broader plans to roll out four “offer-based” partner programs. Two will launch at the conference, including a Local Resale program, which encompasses the existing Channel Partner Program and the bulk of its specialized and certified partners, as well as a Global Resale program for large systems integrators targeting Global 1000 accounts. During its first quarter of fiscal 2007, the company plans to launch a managed services program, Cisco executives said, followed in the second quarter by the launch of a program for outsourcers. Partners will be able to participate in multiple programs if they meet the required profile.

With the Channel Partner Program changes, Cisco aims to boost channel growth, help partners differentiate themselves, meet customer satisfaction requirements and better align its channel efforts with its Intelligent Information Network strategy to build more intelligence into network infrastructure, Cisco executives said. Just as Cisco is continually adapting and changing as it drives the notion that the network will become the primary platform for delivering applications and services, so partners must evolve to meet customer demands for such solutions, said John Chambers, president and CEO of Cisco, in a recent interview with CRN.

“If this market transition truly evolves the way that I think it’s most likely to, the worst decision you could make is not to move,” Chambers said.

In selecting a future path between a broad focus or a deep technology specialization, solution providers will have to do some soul-searching, Chambers said. “This is where I think each partner has to say what they want to do and be realistic on what is their sustainable differentiation and what is not, and how much resources they’re willing to put in play to achieve that goal,” Chambers said. “But I think the takeaway here is that the real risk is in not moving.”

The channel strategy shift is recognition on Cisco’s part that some solution providers are extremely good in niche markets and the shift should help attract and retain such partners, said Ben Patz, president and CEO of Coleman Technologies, an Orlando, Fla.-based Gold partner. “This is Cisco telling specialized partners that they really can make a difference,” he said.

Broad Vs. Deep
Keith Goodwin, Cisco’s senior vice president of worldwide channels, likens the new strategy to building a home. “The key is to have a good general contractor who owns the project and makes sure everything comes together. But you also have electricians, plumbers, a finish carpenter, who are specialized in given areas,” Goodwin said. “A large enterprise customer might want both,” he said. This week’s Partner Summit is San Jose, Calif.-based Cisco’s first since Goodwin assumed the role of worldwide channel chief in August.

The Channel Partner Program transition—which Cisco executives said was hashed out through a variety of partner council meetings over the past two years and will take the next two years to implement fully—also comes in response to solution providers’ calls for the vendor to overhaul its Certified Partner Program, particularly its Silver and Gold badges, to better support them as they work to invest in solution-selling and services practices. While Cisco’s existing Premier, Silver and Gold partner badges will remain intact, the vendor is stratifying its technology specializations into three tiers: Express, Advanced and Master.

Currently, Cisco’s 2,800 worldwide certified partners pick their way through a points system to earn their certification level, a process that allows solution providers a fair degree of freedom in choosing the technology specializations they will earn to count toward their certification badge. Generally, Premier partners need at least one technology specialization, Silver two and Gold three. Now, however, Cisco is integrating multiple technology areas and expanding training requirements around life-cycle services for the new stratified specializations.