Cisco says collaboration is a $42 billion market opportunity for Cisco channel partners -- a figure that doubles and in some cases triples when services are taken into account.
That opportunity is in everything from upgrading core networks to supporting the demands placed on them by mobility, video and virtual desktop infrastructure, to network optimization, consulting and application integration. And if there's one message Cisco has tried to bring to partners, even in a year of major corporate changes at the networking titan, it's that Cisco's collaboration story is the one to beat.
"This is the partner investment opportunity of the decade," said Richard McLeod, senior director, collaboration sales in Cisco's Worldwide Partner Organization (WWPO).
Cisco's overall collaboration strategy -- in other words, how it will go to market with partners to attack what McLeod said is expected to be an $8 billion contributor to Cisco's revenue pie -- is organized around four tenets: mobile, social, visual and virtual. Cisco's approach is to attack each of those transitions with products that, while not the cheapest offerings by category, instead form an architecture around which partners can make money and increase their profitability behind value-adds such as application development and services.
"We still have all of those old PBXes that need to become collaboration solutions," McLeod said. "The installed base is needing a refresh once again, and we're looking at opportunities now for even the installed base of video that was standard definition video."
With PC shipments expected to continue to decline over the next few years, the days of what McLeod described as a "monolithic stack of Win-Tel solutions" are going away, he said. More than 70 percent of workers will be totally mobile over the next two years, he said, and trends like that create a need for collaboration tools that can be deployed at any time on any device from anywhere.
"To have your work follow you and your capabilities follow you is phenomenal," he said.
Cisco has spent much of the year broadening and updating its collaboration portfolio even in the midst of a broader corporate restructuring that saw the company cut headcount, pull back spending in some product areas and eliminate others entirely.
Several of its big collaboration announcements were made in October, when it launched version 2.5 of its Virtualization Experience Infrastructure (VXI) for virtual desktop deployments, launched a version of its video Show and Share software for iPad and iPhone, and debuted Cisco Callway, a subscription-based telepresence service for SMB customers.
Most recently, Cisco made updates to two of its most popular collaboration applications, WebEx and Jabber, framing a theme of moving beyond the era of PC-based collaboration during the Cisco Collaboration Summit in Miami this month.
Behind every big launch, Cisco has looked to align its motives with analyst data about collaboration-centric trends and customer adoption rates, such as the oft-cited statistic that more than 250,000 corporate desktops will be virtualized by 2014, McLeod said.
"That drives costs out of the business," McLeod said. "But it also makes the management of everything so much more smooth and [allows you] to build a new level of security onto things. The actual data is not on the device itself, it's held back at the data center, in the cloud."
NEXT: How Cisco Will Motivate Partners Behind Collaboration
Several updates to Cisco's collaboration strategy go beyond product launches; as of this year, for example, all of Cisco's endpoint products are video-enabled. Still others are programmatic; Cisco's Collaboration Breakaway program -- in which Cisco salespeople and Cisco partner salespeople are incentivized to displace competitive collaboration and unified communications systems -- has been a hit for Cisco since its Aug. 2010 debut.
In November, Cisco updated Breakaway, which already covers the rest of the collaboration portfolio, to include the Cius tablet, with Cisco offering 10 Cius devices for the price of five and a net discount of 83 percent on those devices when ordered with a minimum of 100 Cisco IP phones in a customer deployment.
Bank on more updates and expanded capabilities for Cisco collaboration tools such as Quad, Cisco's social media-flavored collaboration platform which it recently began offering a hosted service, hosted telepresence and also Social Miner, a heavily touted Cisco software tool that allows customers to track social networking interactions as a form of business intelligence.
Partners should also expect new channel specialization programs in the new year related to collaboration and video, McLeod said.
Make no mistake, McLeod said: the time is now for partners to invest with Cisco behind its collaboration vision, or risk being left behind.
"I'd correlate it to the days of 2002 to 2005 around IP telephony," he said. "Those early adopters from a partner perspective saw massive growth because they jumped on it. The sooner partners jump on it, the better they're going to be to capitalize on growth. In the next two to three years, if you haven't made the transition, you'll struggle to catch up."
Cisco's top solution providers are investing behind Cisco's collaboration vision with the thought that because trends such as mobility and desktop virtualization are line-of-business conversations as much as they are IT sales conversations, customers are more willing to invest in architecture than point UC or collaboration products.
"Collaboration is a platform, not an activity. It's about getting info to people, and I think Cisco's message is starting to get to that level," said Steve Reese, vice president, collaboration and secured architectures at INX, a Dallas-based Cisco Gold partner currently being acquired by another VAR500 power, Presidio Networked Solutions.
One of Cisco's biggest strengths, Reese said, is that it builds on its heritage as a network plumber to attack the collaboration problem as being of a piece with the business transformations brought on by data center upgrades, mobility and applications.
"We've spent many years, a lot of money and a lot of energy selling UC as a Level 1-through-Level 3 enabler," Reese said. "But it's time we start delivering Layer 4 through Layer 7 value. Basic features like IM and presence and single-number reach are now basic, but the true ability to create a communications platform that traverses through everything you're doing is something I think Cisco recognizes."
There's no question that collaboration and UC need to solve broader problems than they did even a few years ago, said other solution providers.
"Windows-based desktops are no longer the focal point of the workday," said Jason Parry, practice director, unified communications, at Force 3, a Crofton, Md.-based solution provider and Cisco Gold partner. "But a lot of customers are still stuck in how they do this, and how do they take it to the next level and move it into this collaborative environment that Cisco talks about."
Force 3's collaboration sales have grown 60 percent year-over-year, Parry said. While there are customers who'd favor buying less costly point products than making bigger investments in Cisco architecture, he said a lot of the budget discussions he has with customers do focus on line-of-business problems and how to move unified communications products past the "core requirements" of IP telephony and basic collaboration applications like presence.
"They're looking for a strategic approach," Parry said. "While there are definitely some that favor cheaper products, others are looking at how to take their UC [tools] out of silos to more of an architecture."
NEXT: The Next-Gen Cisco Collaboration Partner
INX's Reese agrees with McLeod's assertion that the differentiated partners that can sell the architecture are not only the ones that will thrive, but the ones that will survive with Cisco and in the channel.
The solution provider model of tomorrow will separate VARs from next-generation solution integrators, Reese said. Companies like INX -- whose VocalMash business unit integrates business applications with customers' Cisco-based voice and communication networks -- will form the vanguard of those integrators.
"VARs are dead -- they just don't know it yet," Reese said. "If I'm selling IT to IT and IT no longer has budgets and you have managers who want a compute platform that can live in a cloud and they pay per consumption, what are you really doing? I think you're going to see the whole new concept of solution integrator partner come forward."
Those software integration-savvy, integration-centric partners, Reese contends, will be a lot more attractive to Cisco than the hardware- and maintenance-focused resellers will.
"It's not just, do you have a CCIE or a router guy and a voice guy and if you have those guys, you can do this," he said. "The collision is happening between the data center and the whole collaboration experience and the right guys aren't just the traditional Cisco partners anymore."
Cisco's challenge is to adequately enable those partners with differentiated channel programs and incentives, Reese said -- in other words, reward partners that can build something like a VocalMash on their own, have line-of-business discussions with customers, and wrap services around those integration sales to fatten their margins.
Partners who have that should be rewarded differently than partners who achieve Cisco's highest partnership tiers and discount levels based on hardware volume sales and other "traditional" means of partner compensation, Reese said.
The perception that Cisco products don't integrate well with other vendors' products is legitimate, Reese acknowledged. But he agreed with Force 3's Parry that Cisco's holistic approach is more in line with many customers' spending priorities.
"What's made Cisco continually successful in this space is that they have never neglected any layer of the stack to execute on their strategy," he said. "John Chambers came out and said, we can't lose focus on the core, because without a solid core, the rest of the stuff doesn't work. That's what makes Cisco more attractive that other players out there."
NEXT: Is Cisco's Cius Struggling?
Of all the products Cisco counts as critical to its collaboration strategy, it's Cius, Cisco's Android-based tablet, that remains the biggest question mark.
Following initial partner excitement around its June 2010 debut, Cisco delayed getting Cius in the hands of partners until the spring of this year. , faces an uphill battle driving acceptance of Cius among enterprise users, even with what Cisco describes as differentiated security, collaboration, application management and other enterprise-grade features.
But partners are less certain.
"I've been on the fence about Cius for a long time," said INX's Reese. "I think if you really peel back what Cisco is saying about Cius, it's that it's the device that iconifies that post-PC era for Cisco today -- you have something tangible to point to that Cisco can say, 'That's our vehicle.' Cisco is doing the right thing by positioning it as a vehicle to get people to think differently about how they're communicating rather than boiling the ocean in tablets."
Force 3's Parry said customers have shown interest in Cius, but he's had to quickly identify customers that are interested in purchasing tablets versus those who want to listen to the story of Cius as the enterprise-grade endpoint to a Cisco collaboration architecture. The former category of customer, he explained, is a discussion that revolves around Apple's mighty iPad, and looks at Cius as an also-ran tablet instead of a piece of the collaboration solution.
"We don't pitch Cius as a tablet," Parry said. "Customers will listen to the pitch and the security and the experience of [features] like VDI are different than what you get on the consumer device."
But that conversation is lost on customers that just want tablets, Parry added, and aid in how quickly the iPad seems to be catching on with business and commercial users.
Cisco itself is approaching the tablet question pragmatically, McLeod said.
"We don't think everyone's going to buy a Cius tomorrow," Cisco's McLeod said. "But if we get 10 percent of what's projected for growth in Android tablet devices, that's easily a million devices for us here in a couple of years. So we'll take our small share and focus on those rich collaboration opportunities."