New Cisco Programs Protect Partners During Downturn

"The difficult part of an economic storm is you never know how long it's going to last," said Edison Peres, Cisco's senior vice president of worldwide channels, at Cisco Partner Velocity 2009 in Miami.

According to Peres, partners are facing pressure on profits and cash flow, tightening credit, changing customer priorities and customer purchasing delays. To help partners find their way through choppy economic waters, Cisco unveiled its Navigate To Accelerate initiative, a collection of programs that instructs and enables partners to focus on finance, their customer base, changing needs and the future.

First up, Cisco launched a core acceleration promotion, a program that urges partners to target the network core, a critical area that may have fallen off partner radar screens but is rife with sales opportunities. Cisco estimates that networks contain 30 percent to 50 percent obsolete equipment, or $20 billion in aging or obsolete gear. Peres added that there is currently $40 billion of Cisco gear in use that is more than five years old, offering "a great opportunity to upgrade those bases."

Under the core acceleration program, partners that perform a network assessment for their customers can receive $1,000 in rebates per assessment, encouraging partners to assess customers' networks to determine opportunities for upgrades and replacements and to sniff out gear that might be end of life or end of sale. Cisco estimates that over the next several months, partners will perform 3,000 assessments as part of the program.

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Additionally, Cisco is launching hardware rebates on routing and switching gear for partners in the U.S. that have an opportunity incentive program. For routers, partners will get a 5 percent rebate and for switches a 10 percent rebate, on top of the 7 percent to 12 percent margin partners already achieve with routing and switching hardware.

Wendy Bahr, Cisco's senior vice president of U.S. and Canada channels, said the program gives partners incentive to engage their installed base and discuss upgrades, repairs and preparation for future technologies. From there, a managed services or hosted conversation can emerge.

"The core is the foundation," she said.

Bob Olwig, vice president of corporate business development for solution provider World Wide Technology, said the core acceleration program gives partners a needed break when engaging existing customers.

"It's Cisco showing that they're trying to financially support their channel in difficult times," Olwig said. "When budgets are tightening, new customer acquisitions get more difficult. People are going to go back to their existing customers and try to sell them more. In difficult times it's easier to sell to existing customers than to acquire new ones."

Next, Cisco launched a new SMB Partner Practice Builder, targeting select partners that want to launch a unified communications (UC) practice. The new module offers content targeted toward executives, sales, technology and marketing and is a three-step, Web-based program that helps partners determine opportunities, readiness and implementation as it relates to UC in the SMB space. The program offers tools and tips to partners on how to build a profitable practice around UC and ensures they are clear with the responsibilities required to launch a solid UC practice.

According to Bahr, the new module brings the total number of Partner Practice Builder modules to 10 since the initiative launched in 2007 with a $3.5 million investment from Cisco.

"In the small business market, unified communications and collaboration is a no-brainer," Bahr said, noting that SMBs are relying more frequently on solution providers to get them up to speed with advanced communications systems.

Finally, Cisco launched a set of leasing and financing incentives through its Cisco Capital arm. The new program provides extended terms to Select partners, offering 90-day finance terms.

Another new financing initiative, dubbed "Now's The Time," lets partners offer their customers no payments and no interest for three months on all Cisco hardware, software and bundled services for deals of $30 million or less. That flagship customer financing offer is stackable with other offers, said Maryann Von Seggern, director of Cisco Capital's worldwide channel development group, and also enables partners to offer customers payment deferrals.

Cisco Capital is also launching a new training initiative to help change the conversation partners have with customers. The training, which involves a 45-minute WebEx session targeted at partner sales reps, gives insight into how to explain financing options to customers.

"It's another conversation we can have with customers," World Wide Technology's Olwig said. "It's a way for our salespeople to be more empathetic with customers."