Cisco Cancels Compute Promotions, Deal Registration Discounts In Wake Of Rising Memory Prices

‘This is hard,’ says Cisco Senior Vice President of Global Partner Sales Tim Coogan in a letter to partners. ‘We’re navigating unprecedented market volatility together.’

Cisco Systems is canceling compute promotions and discount incentives including deal registration effective immediately in the wake of rising memory prices, said Cisco Senior Vice President of Global Partner Sales Tim Coogan in a letter obtained by CRN sent to channel partners.

Furthermore, Coogan said in the letter that effective immediately all “previously approved compute quotes for which we have not received an order will be reopened and subject to repricing.”

Cisco also said it will announce list price changes Feb. 21 that will go into effect March 7 on compute and other product lines with memory components and services.

“This is hard,” said Coogan in the letter to partners. “We’re navigating unprecedented market volatility together. I’m committed to getting the information and support you need as quickly as we can provide it. Thank you for your continued partnership.”

CRN reached out to Cisco for comment after obtaining the letter.

Cisco responded with this comment from Coogan in an email to CRN: “We’re working to adapt quickly to this rapidly changing situation and deliver the innovation and reliability our partners and our mutual customers expect from Cisco. We’re committed to transparency and providing tools to help partners manage these changes with our mutual customers. And we’re actively listening to partner feedback as this evolves.”

In the letter, Coogan also reiterated to partners that effective immediately all price quotes and sales order acknowledgements now include compute cancellation rights and price adjustments, which were announced last week.

In addition, as previously disclosed, Coogan said Cisco plans to “change the quote price protection period and will work with partners and distributors to operationalize” those changes with additional details to come when available.

“As we previously shared, the global IT sector continues to face significant supply constraints and escalating costs, particularly within the memory semiconductor market, driven by the rapid expansion of AI demand,” said Coogan in the letter.

C.R. Howdyshell, CEO of Independence, Ohio-based Advizex, No. 129 on the 2025 CRN Solution Provider 500, said the new Cisco compute policies including eliminating deal registration and promotions add to the chaos that partners are experiencing in the wake of rising memory prices.

“This is going to have a big impact on us because the majority of the business we do with Cisco is compute,” he said. “From a customer perspective, there is zero predictability on [Cisco] compute pricing and there is also going to be lack of confidence in the field because there is no deal registration. I know this is a challenge for all OEMs, but customers are not going to respond well to an environment where there is zero predictability and pricing can change instantly. Customers are going to start looking at other options.”

Howdyshell said the compute pricing terrain is out of control for customers with one order waiting for approval going up several hundred thousand dollars in just one day.

The CEO of a top Cisco partner, who did not want to be identified, told CRN that Cisco no longer providing compute promotions or deal registration discounts is part and parcel of the volatile supply and demand environment. “Why would I give you a lower price if I can find a customer who will pay a higher price?” said the CEO. “When you are supply constrained the demand is much higher than supply. This is supply demand economics.”

The CEO said that he is glad the changes do not affect Cisco’s bread-and-butter networking and security businesses. “The Cisco competitors have a much bigger share of that compute market,” he said. “It is not trivial obviously. This is no different than what the server vendors have been dealing with [with] GPUs. There is more demand for GPUs than there is supply. What happened with GPUs with servers is now happening to both memory and storage.”

The CEO said the procurement process for servers has become an operational nightmare for solution providers. “We have to manage our way through this whole process,” he said. “We give customers a price. We don’t know how long that price will hold. The customer gives us a purchase order. We then generate the purchase order with our vendor. They then tell us yes and then we sit and wait until delivery. It’s good to be in the software business where this is a nonissue.”

Harry Zarek, president and CEO of Compugen, a Richmond Hill Ontario-based solution provider, said the current memory crisis is no different than what the channel went through during the pandemic. “It’s not the end of the world, and we are not all going out of business,” he said. “It’s not as though there is zero production and zero delivery. If the OEMs don’t ship any product, they don’t generate any revenue. Economically, it is not going to get to zero. We have been through this before. We are going to get through this.”