Cisco Implements Ban On One-Offs

The networking hardware vendor in the past has let partners sell products they are not authorized to sell on a deal-by-deal basis, a practice often called a one-off.

But in its effort to clean up channel conflict and increase profitability for its partners, Cisco late last month declared an end to the policy.

At its annual sales meeting in late August, Paul Mountford, Cisco's vice president of worldwide channels, Doug Dennerline, senior vice president of enterprise sales, and Rick Justice, senior vice president of worldwide field operations, told the entire Cisco sales force they were putting an end to one-off deals for emerging technologies, the company confirmed.

Cisco said the ban applies to IP telephony, storage and optical gear and some of its content networking hardware. The one-off situation had led to some problems with botched installations, solution providers say.

Nowhere has the problem been as prevalent as in IP telephony, they said.

With its high-stakes bet on IP telephony, Cisco originally set the bar too low for its IT telephony specialization, said John Freres, president of Meridian IT Solutions, Schaumburg, Ill.

Cisco "lobotomized the certification process and opened it up to everybody to get the product out into the market," Freres said. The result was that Cisco sales engineers spent almost half their time cleaning up bad installations, he said.

Bob Norton, vice president of Select, Westwood, Mass., concurred. "Cisco authorized nearly every company that lived and breathed in IP telephony," he said. "The product became overdistributed, but now they're trying to get a handle on that."

Bill Yassinger, director of network solutions at Forsythe Solutions, Skokie, Ill., added: "When you are pushing a new technology, every installation needs to be a quality installation. We've had to go out to customer sites and pick up the pieces of installations that weren't properly done."

Citing its emphasis on customer satisfaction, the company raised the bar last year for its IP telephony specialization, requiring more certified engineers and more experience.

As of Oct. 15, 2001, all new IP telephony technology specialization applicants were required to have six dedicated employees, including two field engineers. Specialized IP telephony partners that were authorized under the old program had until July 31 to meet the updated requirements. But the product was still being sold and installed by non-specialized partners through one-offs, solution providers say.

In fact, Cisco regularly granted one-off exceptions for solution providers

that did not have the specialization, and many projects were handled by Comstor, a distributor in Chantilly, Va.

Comstor's Pro Shop received its IP Telephony Services specialization in August from Cisco and plans to outsource its resources to solution providers, said Joe Heinzen, vice president of engineering and professional services at the distributor. "How do you enable a VAR that made an investment in a customer to participate in emerging technologies? It takes considerable investment," he said. "If the VAR has the relationship and has the good understanding of technology, why force them to miss out on the deal just because they didn't have subject matter in specific areas?" he asked.

John Wilson, president of Network Resource Technologies, Lanham, Md., said, "We use Comstor, and our [IP telephony work hinges on them. We don't have the specialization, but we have some experience with [IP telephony. Instead of passing up the opportunity, we can bring in Comstor."

But not anymore.

Maureen Data Systems, a New York-based solution provider, has partnered successfully with Comstor on a number of occasions, but it may lose a couple of IP telephony opportunities now, said Victor Kokaram, a consultant at the company. The solution provider recently lost one deal worth nearly $1 million because it was not granted a one-off by Cisco, he said.

Maureen Data Systems is not entirely sold on Cisco's new policy, but it is working toward getting the revised specialization, Kokaram said.

Instead of one-off deals, unauthorized partners with customers needing restricted technologies now will have to partner with another Cisco specialized partner to get the products, Cisco said.

And the vendor seems to be sticking to its guns on that policy, said Tom Adams, vice president of strategy at solution provider Calence, Tempe, Ariz. "We're already getting calls from other partners who want to partner with us on deals because they lost their certifications," he said.