Cisco Revamps Managed Services Program

The next generation of the MSCP was built to help VARs capture a part of the $40 billion market opportunity Cisco sees in managed services as end customers shift their focus from capital expenditures to operational expenditures. And Cisco Senior Director of Programs and Strategies Surinder Brar said that market opportunity for partners will continue to grow at a rate of 16 percent to 20 percent annually.

"The economic slowdown has helped customers move to managed services," Brar said.

Cisco offered a glimpse at the program in June at its Cisco Partner Summit in Boston. In the current program, Cisco has roughly 70 partners, though Brar said he expects many of them to migrate to the new program within the next 90 days.

Brar said the updated program lowers the barrier of entry for partners and also opens the door for more partners to join and reap the financial benefits of managed services offerings.

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The new program will feature three tiers, the highest being a master tier, followed by advanced and express tiers. Brar said the new program will allow express partners to offer managed services through a white-label agreement that lets two partners work together to deliver a managed service using one partner's network operations center (NOC). For express partners, that alleviates the need to make the significant investment in a NOC to offer managed services. Partners without a NOC must pair up with partners from either the master or advanced levels, Brar said.

In the new MSCP, Cisco also is adding a single discount based on partner level attained. That discount spans all Cisco products that the partner manages instead of offering discounts via specific service. That means a master MSCP partner receives the same discount across all products. Brar would not specify the discount structure.

The tweaked managed services program also makes the ordering process less cumbersome for partners, Brar said, by letting them order across all product categories via a single bill of materials, as opposed to having to issue bills of materials on a service-by-service basis.

Cisco partners said the new program adds not only new revenue streams with its stratification and new discount and rebate models, but the addition of the tiers differentiates partners.

"It really acknowledges the fact that there are different types of MSPs that have different capabilities and have made significant investments," said Vince Conroy, CTO of FusionStorm, a San Francisco-based solution provider.

FusionStorm is still investigating whether it will share its NOC via other partners, Conroy said.

"Creating a mechanism where partners can share resources like that is a good idea," he said.

Overall, Conroy said the new Managed Services Channel Program will gain stronger recognition among end users while also boosting the Cisco brand through the new tiered system. Additionally, the new program features a normalized discount structure that makes the program simpler and more profitable for providers, Conroy said.

"This opens up the program to a broader range of providers, which will really help the brand," he said.