Cisco Uncaged

At this week's Cisco Partner Summit, channel chief Paul Mountford will exhort partners to shake up their business models and seek out new paths to growth.

To help solution providers in this endeavor, the company is rolling out an incentive program that calls on partners to combine applications, services and Cisco technology into focused solutions. Cisco is also adding wireless technology to its deal-registration program and expanding it to include larger deals. In addition, a new service option aims to help partners continue to push Cisco products into the SMB market.

Under its new Solution Incentive Program (SIP), Cisco is asking solution providers to either partner with third-party ISVs or perform their own in-house development, positioning the resulting applications as the primary drivers of solutions delivered over a Cisco technology foundation. The program gives partners the freedom to build their own unique solutions, said Mountford, senior vice president of worldwide channels at Cisco, San Jose, Calif., during an exclusive interview with CRN.

>> 'In the past, Cisco would say, "Here's what you need to do," then go to 10 other partners in your area to do it, too. Now, when Cisco asks us to invest in the Solution Incentive Program, they're supporting us and not offering [the same solution] to everyone else." --John Freres, president, Meridian IT Solutions

"This is the first time you'll be able to register based on your own differentiation, certify it and then get more for having built it," Mountford said.

To maintain the diversity of SIP, Cisco is leaving it up to solution providers to find appropriate ISV partners rather than dictating a select group of approved vendors, Mountford said. To participate, authorized partners must present their solution to Cisco for evaluation. Once Cisco certifies it, partners can then register sales opportunities for that solution with Cisco to earn extra product discounts.

On average, horizontally focused solutions that lead with network applications for areas such as call centers will earn additional 4 percent to 5 percent discounts. Vertical market business solutions, such as electronic records and imaging applications for health-care customers, will earn approximately 8 percent, he said.

Some Cisco partners said they see the need to move beyond integration into high-level solution selling because customers are now looking to buy that way.

"You're no longer talking about networking to the network manager. You're talking about true ROI," said Tom Foley, CEO of Networked Information Systems, a solution provider in Woburn, Mass. "You need to have serious business discussions with CIOs, COOs and CEOs," he said.

Over the past two years, Networked Information Systems has worked to build up a convergence practice and then morphed it to support applications from ISVs in areas such as scheduling and time sheets for health-care and engineering/manufacturing customers. It has been an arduous process that has required a makeover of the company's sales force through extensive in-house training, he said. "The discussion is no longer just about a customer needing to buy some software and a couple of phones. It's about how to bring these applications to my phone, how can I make my people more efficient," Foley said.

Other partners are building out their own XML applications to ride on top of a converged Cisco infrastructure. Madison, Wis.-based Berbee Information Networks, for example, targets schools and hospitals with InformaCast IP Speaker, a solution that combines its own InformaCast broadcast paging software with a networked Power over Ethernet-enabled speaker. By tying the paging system into a converged IP network, customers can benefit from new functionality not available through traditional overhead paging options, said Pat Scheckel, Cisco practice director at Berbee.

"Customers can broadcast to every device at every location concurrently, whether they're all in one campus or around the world," he said.

The solution-based sales strategy SIP encourages should also create differentiation among Cisco's channel and help cut down on partner-on-partner cannibalization, said John Freres, president of Meridian IT Solutions, Schaumburg, Ill.

"In the past, Cisco would say, 'Here's what you need to do,' then go to 10 other partners in your area to do it, too. You all look the same. Now, when Cisco asks us to invest in SIP, they're supporting us and not offering [the same solution] to everyone else," he said.

Yet some Cisco partners are more hesitant to migrate toward application-driven solution sales. "I agree with the idea of customers looking for total solutions, but [with] the criteria to get the additional discount, I didn't think that's what would work for us," said Pat Grillo, president of Atrion Communications Resources, a security-focused solution provider in Branchburg, N.J.

Others worry about getting pigeonholed during Cisco's lead-generation efforts if they are pushed to focus on a small number of vertical markets. "We don't have revenue in any one vertical that exceeds 20 percent of our revenue," said Robert Keblusek, senior vice president of business development at Sentinel Technologies, Downers Grove, Ill. "If you get painted with one brush, then it's hard to show them your diversification," he said.