Extreme Sets Sights On Cisco Partners

At the same time, Extreme also is adding a number of large national resellers to its flock, some of which solution providers say are the very cause of Cisco's channel problems.

>> Extreme's new program awards discounts based on sales volume and certifications.

Extreme's program, slated to launch this Monday, creates three classes of Extreme partners, awarding different discount levels based on sales volume and certifications, said John Spiliotis, vice president, Americas sales at Extreme. But the enterprise networking hardware vendor said it plans to avoid pricing conflicts between national resellers and regional solution providers by setting different standards.

To achieve the same discount level as a local solution provider in a particular region, a national provider would need certified engineers and salespeople located in that region and would have to achieve significantly higher sales volume targets,usually three to four times higher than the regional provider, Spiliotis said.

Tim Jaeger, vice president of sales at Apparatus, a Denver-based network solution provider, said he is "very happy" with Extreme's new program. "Extreme has leveled the playing field," Jaeger said. "By making sure that product fulfillment houses get the lowest discount level, it keeps them from becoming vultures."

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Dell Computer, SBC Communications and Broadwing Technical Solutions have signed on as national providers under the new program.

Spiliotis, a veteran of Cisco's channel group who joined Extreme late last year, said the different requirements for national and regional partners will prevent the same price wars and deep discounting that is occurring in the Cisco channel. Cisco partners have long complained that telecom carriers such as WorldCom, SBC and Qwest Communications International sell Cisco hardware at or below cost to reel in service and transmission fees.

Jaeger said he isn't concerned that Dell is selling Extreme gear, since the direct marketer simply resells product without providing any design or installation work. SBC, on the other hand, is a concern, he said. "Companies such as SBC and Qwest have been very aggressive discounting Cisco, so I am concerned about them selling Extreme," he said. "But Extreme is aware of the problem up-front and trying to be proactive. Cisco is being reactive because their situation is already out of control."

Apparatus sells Cisco and Extreme products but now leads with Extreme, Jaeger said. Extreme provides extensive sales support, and its margins are usually three to four times higher than on Cisco product, he added.