Cisco's Best-Kept Secret: Distribution Growth

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Cisco's global distributors have been tightly involved with Cisco at a strategic level as well. Comstor, for example, uses a program called Executive Relevance Selling to teach sales associates how to engage customers in architecture-led business conversations -- a program Cisco itself is now using to train its data center go-to-market team.

Other moves have been more comprehensive. Ingram Micro's relationship with Cisco in the supply chain, for example, centers on the distributor's ability to remove working capital by assembling Cisco orders in its warehouses at the last minute.

"The end result is you carry a lot less inventory in the overall supply chain," Ingram Micro's Monie said.

Monie said Ingram Micro attempted to push a similar model with other major vendors but few of them went for it. The difference between Cisco and other tier-one vendors, he said, is that Cisco will take in distributor ideas and work through them with gradual feedback vs. other vendors that assign distribution policy and manage it top-down.

"It is real money that gets saved," Monie said of the Ingram Micro-Cisco strategy. "It isn't a lot of money to some. But some [vendors] are just faster and smarter than others."

Not everything in the Brown era of Cisco distribution has gone smoothly, however. Brown took over from O'Callaghan with the supply chain wounds still relatively raw, but there were also smaller headaches, such as the distribution transition following Cisco's 2010 acquisition of Tandberg.

At the time, Cisco partners were anxiously seeking feedback as to how they'd get access to Tandberg video products. But distributors were left wondering the same, especially since Tandberg had relied on a much smaller channel of value-added distributors that were by and large not used to a high-intensity sales and marketing machine such as Cisco's.

It led to a lot of confusion over distribution of Tandberg product, Brown acknowledged, but he wouldn't have done it differently.

"If I had immediately transitioned those distributors to our traditional Cisco model, that would have done them a lot of harm," Brown said. "The models were very different. Those distributors weren't stocking distributors, and my goal was to move from an integration standpoint very carefully and very deliberately so we wouldn't lose their value."

In November 2010, Cisco confirmed Visitec Marketing Associates, KBZ Communications and TMDistributing as its specialty distributors for the Tandberg lines, and it also began transitioning the video wares to its broadline distributors. The Tandberg distribution as of 2012 has mostly smoothed out, Brown said.

"They were all frustrated because it was taking longer than they wanted it to take," Brown said. "But we quickly jumped in, fixed those issues and got it back on track. That business has been booming for us."

NEXT: Cisco Distributors Tackle The Cloud

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