Cisco Unveils New Initiatives And Charts Progress

In that time, Mountford, a senior vice president at the company, has made a number of changes. He has assembled a new worldwide team, tackled product dumping by telcos and helped transition the company's partner program from a volume-based model to a value-based one.

More than anything, though, Mountford and his team have worked to improve partner profitability. On that front, there's progress to report. Research conducted by the company reveals that partner profitability has improved worldwide by an average of 12 percent, thanks to the improving economy, the elimination of scores of low-ball, volume resellers, the introduction of the Value Incentive Program (VIP) and some detailed research on the return on invested capital (ROIC) partners get from their engagements with Cisco.

In an interview this week at the Partner Summit, Mountford took a moment to reflect about his stint in channels.

"The first year, you sort of spend your time just getting to know the job and what the expectations and conditions are," he said. "Then, in the second year, you make the changes that are needed based on your knowledge and input from your team.

The third year? Again, in what is often the final phase of a stint at many companies, you're supposed to reap the rewards of what you have sown, Mountford said.

He and the team, however, aren't changing their approach to how they have approached the job since Day 1. In addition to announcing new enhancements to the VIP program that will essentially double the rebate partners receive for selling IP Communications products, the company this week unveiled new several new initiatives, program adjuncts and enhancements. They include:

• A new plan to evolve the current technical specializations that partners pursue and augment them with more solutions-focused specializations.
• A new voice services model to help partners build successful businesses around voice technology.
• A new,global specialization badge that will be awarded to large companies with true abilities to serve enterprise customers' needs across multiple geographies. Already, IBM, Dimension Data and others have achieved this new status.
• A new $30 million investment initiative called Project Disti to overhaul IT systems and help build systems that can better predict how much inventory Cisco should maintain in the channel.
• A new bundling and marketing initiative with Microsoft to penetrate SMB customers.
• A new effort to help these same end-user customers buy more efficiently from direct-marketing resellers overseas.
• A new deal registration and reward program called the Opportunity Incentive Program (OIP) that will pay partners rebates from generating new business with new accounts and/or advanced technology products.
• A new initiative called the Solution Technology Integrator program (STI) that promises to hook up third-party OEMs building solutions around core Cisco products with resellers.
• Amid all that, issues remain. Partners are wrestling with Cisco's inability to develop an accurate forecast for its pipeline of products. "It's an issue," conceded Ingram Micro president and COO Michael Grainger, "but I think that the new investments Cisco is making in systems and procedures will have a positive impact."
• And, of course, many are still concerned about profitability. While the issue is not the dominant theme at this year's event, it nonetheless permeated nearly every conversation.
• Mountford and his team, however, are encouraged that partners are again looking at growing their top lines as much as their bottom lines. During a roundtable luncheon with Gold Partners hosted by Chambers, partners asked questions focused more on what steps, if any, Cisco would take now that Juniper Networks has moved to acquire NetScreen Technologies than what else Cisco could do to address profitability.
• That's not to say tactical issues don't exist. They do -- and in spades. Scores of partners, for example, have asked when Cisco will expand the VIP program to include wireless, storage and other technologies. Edison Peres, vice president of advanced technologies within Cisco's channel group, hinted this week that he expects the company will use the VIP vehicle to extend to additional technologies, though provided no specifics. But he was more forthcoming about the new voice services business model that is currently in pilot mode and expected to be rolled out in next six months. After some review of current programs, Peres has concluded that the current SmartNet solution does work as customers need. The new initiative will essentially give partners a chance to offer co-branded services in conjunction with Cisco and, more important, help them create recurring revenue streams.
• "It's a big deal, and I hope you'll have the opportunity to take advantage of it," he said on Thursday. Peres also explained Cisco's rationale for evolving specializations. Today, to be Gold partner, for example, partners have to develop broad technological expertise in areas such as wireless, IP communications, etc. Partners get points for achieving proficiency there and for hitting other goals in areas such as customer satisfaction. Now the company wants to roll out horizontal, solutions-based specializations that could help smaller or more focused solution provider reach a higher lever of status within Cisco's partner program.
• "We're tying to give you more options to make the call on what makes sense to you," Peres said.
• Afterward, IDC channel analyst Ken Presti said the approach, tone and focus the company has taken this week has helped it improve ties to its best allies.
• "Not a bad effort," he summed. "Not bad at all."