Goodwin: Cisco Needs $20 Billion in New Channel Business

Cisco Systems channel chief Keith Goodwin has high growth targets for Cisco's channel business, and he's looking to the company's existing partners to scale up to hit them.

In order for Cisco to meet the growth goals laid out by Chairman and CEO John Chambers, the San Jose, Calif.-based company needs its channel partners to contribute upwards of $20 billion in new business over the next several years, said Goodwin, senior vice president of worldwide channels, during a keynote address at the Cisco Partner Summit Wednesday in Honolulu.

"John Chambers has set expectations for us to grow 12 percent to 17 percent as a company over the next three to five years. When I run the numbers on that, it means that over the next three years, I need to build $15 billion to $20 billion of new partner capacity," Goodwin said. "There are two ways to we could do that. We could recruit thousands of new partners, but that's not our strategy. Our strategy is to build it through each and every one of you in this room by continuing to invest in you."

Goodwin pointed to collaboration -- between Cisco and its partners and between partners with each other -- as the means for scaling up to meet the growth targets.

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To support that, the vendor at the conference launched Cisco Partner Exchange, a virtual environment where Cisco's 8,500 certified partners can create "booths" to share information about themselves and their skill sets, and then find solution providers with complementary skill sets to partner with.

"It's where you can find other partners and be found," said Andrew Sage, senior director of worldwide marketing at Cisco.

NEXT: Partnership Pains

One reason Cisco is going to such lengths to encourage teaming between solution providers is because it recognizes that, for many partners, collaborating with a company that could be a competitor is not an alluring option.

HEIT, a Cisco silver partner that specializes in solutions for banks and credit unions, is one such partner. "I've tried it. Three out of four times, it hasn't worked," said Daniel Holt, CEO of the Fort Collins, Colo., company, on his experience teaming with other channel partners.

Culture clash has been the primary reason such partnerships have failed for HEIT, he said. "You come to the table with a solution and there's one salesman that's a car salesman and one that's a solutions salesman. Then there are questions about who closes the deal, who gets the upsale. It's a challenge."

Still, other channel partners, such as the 28 solution provider members of the 1NService partner network, are able to close their skills gaps and expand their geographic reach by working together, said Paul Cronin, CEO of 1NService and vice president of Atrion Networking, a Cisco Gold partner in Warwick, RI.

Goodwin pointed to the results of a recent study conducted by Cisco as evidence that partners benefit by working with each other. Solution providers said 31 percent of their revenue comes from partnering, according to a survey of 473 worldwide channel partners. Among partners who collaborate with other solution providers, 78 percent said they win larger projects as a result, while 75 percent said it has enabled them to win new customers.

Goodwin exhorted channel partners to embrace and use collaborative technologies such as wikis and WebEx within their own organizations and to look for opportunities to collaborate with each other.

"We're using technology to take partner-to-partner collaboration, which is already happening today, to a new level," he said.