Cisco's Wendy Bahr: HP's 3Com Buy 'Flattering'

For Cisco's Wendy Bahr, the year began with a big-ticket promotion. Nearly a year after taking over as vice president of U.S. and Canada channels and replacing Chuck Robbins, Bahr in January 2009 became senior vice president of U.S. and Canada channels -- the first woman to become Cisco's highly visible North American channel chief.

Since then she's been, well, highly visible, no less so than when at Cisco's Partner Summit in Boston in June, she threw down the gauntlet for Cisco's erupting competition with Hewlett-Packard.

"We are competing with HP. Period. End. It is competition," Bahr said at a Partner Summit keynote. Strong words, now remembered as a key sound bite for the year that Cisco and HP stepped into the ring as once-friendly, now-competitive rivals. caught up with Bahr earlier this week to talk recession, HP and the competitive climate, and get a sense of how Cisco hot topics like energy, video and the data center are going to boost Cisco's partner community in the new year. Excerpts of the conversation follow:

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It's been a busy year for the Cisco channel. Looking back, what was the most significant development this year for Cisco channel partners?

We have an awful lot of partner events, as you know, and as I listen to their feedback, I ask a very similar question about 2009. I think the Cisco brand, and our tradition of execution in difficult times, helped customers feel comfortable we would be the right place to be. 'Navigate to Accelerate' was put in place and we added a number of programs to help partners weather the storm, including extended financing terms, network assessments and trying to stimulate the pipeline so that as the economy is coming back, they'll be in good shape. I think we were good at keeping our eye focused on partner profitability and demand generation. When you get into a recession, it's easy to pull away from demand generation, but we think that we've weathered the storm with our partners quite well.

So the economy, then. And as Cisco partners come out of recession they're looking to new opportunities, including around those 30 adjacent markets we've heard a lot about from John Chambers. Which of those do you think are going to be most crucial for partners heading into 2010?

I think it's about architecture, and while that's not necessarily an adjacency [adjacent market], it means that we have virtualization, collaboration and borderless networks that are not separate architectures but integrated with one another. This is a key idea and concept and this is what differentiates Cisco from the competition. We have unified computing, for example, with the UCS [Unified Computing System], which partners understand means we are changing the IT dynamic. We cut our op-ex this year but didn't in a way that would impact our customers. We tightened the purse strings on the things we could control and continued to invest as well. In terms of key adjacencies, I would highlight smart grid, physical security and sports and entertainment.

Key as in these are most important coming out of the downturn?

The market is ready, the economy has turned, and partners have had a chance to understand our philosophy. What we've been talking about forever is that the network is the platform -- the network is the enabler for all forms of collaboration. I think even our competitors recognize that, and we're making moves at a period of market transition. We're not asking anyone to look too far ahead, and it'll be interesting to see how Q2 ramps out, but every day is a little bit better, and when that starts to happen you have to put your foot on the gas pedal.

We've heard much about the coalition between Cisco and EMC and VMware, and the Vblock product set. Partners are interested, but the ones who are qualified are also curious as to how Vblocks will move through the channel given that the three of you -- Cisco, EMC, VMware -- all have different programs. Can you provide any more information?

From a partner perspective, this is a complex solution. You saw Cisco, EMC and Vmware come together in this coalition for these robust V-block infrastructures. We're obviously very excited. It's also important to understand that it's the first of many coalitions using our open- and non-proprietary UC architecture, and you'll see continued partnerships with EMC, NetApp, Oracle and Microsoft, and others.

We are cognizant that coalitions like these will require changes in channel programs. Rather than having the partner aligned with each manufacturer, we're looking at programs that would reward partners across a broad scope of manufacturers. That has happened in the past, but not on a wide scale. The partners need to have one program that benefits from each of the manufacturers. We're very sensitized to that and there will be training around it.

So partners should stay tuned for an updated channel program around V-block?

Absolutely. It will start with the members of the coalition. My hope is to look where we have commonality for a joint program, a registration program or an incentive program where all three manufacturers are making it easier for the partner. Life is getting very complex for Cisco partners, I know. This is a key opportunity set for the coalition.

Next: Bahr on Smart Grid, Video and HP-3Com

You mentioned energy and smart grid. A lot of VARs see these opportunities as the province of energy specialists -- they think, I'm not an energy expert but I keep hearing there's solution provider opportunity in smart grid. Can you explain how?

The environment around energy is right for what we do at Cisco, especially around the hundreds of unique protocols and the ability to accomplish a more efficient energy protocol. That particular vertical is prime for the channel, and it will require partners to have in-depth knowledge. But at the same time, there is opportunity for smaller and boutique partners and partner-to-partner collaboration. A small partner can get together with an industry specialist to provide core routing and switching for energy grids, for example.

So they'd be combining with energy specialists and service providers for solution sets? Building smart grid?

It may look like a solution set sometimes. Smart grid is an architecture, but they need applications, too. A group of partners could come together: an energy company, a municipality, a reseller that does traditional routing and switching, or someone like a Liebert providing power who wants a UC platform. Think of it as there's lots of work to do along the energy grid. That's been helpful in explaining to partners that there is a lot of opportunity around energy going forward.

So then if they want to capitalize on VAR opportunities for smart grid -- or for stimulus or any other of these types of modernization project -- they need to think of it with a services mentality.

Absolutely. If you're interested in smart grid, build relationships with non-competitive partners, especially those with access to community information in public sector. Connect with other partners and be open to providing services.

Similarly a lot of the partners are coming to you with questions on how they can capitalize on video opportunities. How can they do that, what opportunities are best to focus on, and will those priorities change if Cisco's planned acquisition of Tandberg doesn't pan out?

Well, they should attend our Collaboration Summit. There's so much information it's almost too overwhelming because we had so many new announcements. We're full-out in a partner enablement strategies around collaboration, video and borderless networks. Our new integrated services router G2 and all the things we have medianet-ready will help build the network for the future and build it so its video-ready. I have a 23-year-old son and a 19-year-old daughter, and both of them have an insatiable appetite for video. Our strategy is to get at that as much as possible and partners will drive that.

One of the big channel stories around Cisco this year has been the stepped-up competition with HP. You now play in areas where they were established before you got started, and vice versa. How do you assess HP's bid to acquire 3Com and are you still leading the 'compete with HP' battle cry like you did at this year's Cisco Partner Summit?

Under the leadership of John Chambers, we don't usually focus on the competition so much as our customers. But we don't dismiss the competition either. It just makes us better -- it drives our focus and our execution. In my opinion, HP's intent to acquire 3Com is quite the endorsement of the network being at the center of everything and driving all platforms of communication and collaboration. It's flattering. We pay more attention to our commitment to the channel. Obviously when something like this happens it makes for interesting times, but that doesn't change our philosophy. hears often from solution providers who partner with both HP and Cisco. Some tell us it's just healthy competition and to stop fanning the flames. Others, however, tell us they feel increasing pressure to choose sides -- and that's not only from HP, but Cisco, too. How do you respond to those partners?

Cisco has never required exclusivity. The customer chooses the architecture that's required, and it's the channel that provides the most robust services capability. We support commitment and loyalty in the channel. Obviously the noise is out there, you can't get around it. We have to stay focused on the game and in making sure we've got the best choice for customers. Partners want to know that they're armed with a portfolio of products and services that provide them greater profitability. We're trying to take a core approach to an ever-growing and complex environment.

Looking at all the recent M&A activity, from Cisco's acquisitions, to HP, and what we've seen from Dell-Perot and Xerox-ACS, is there one event that sticks out to you as particularly disruptive to the channel?

We're all in this M&A climate and we all go through the peaks and valleys of M&A. The fact that we did four alone this past month coming out of a recession shows you our vision is facing forward. I think it's always interesting when you see companies taking these steps and taking advantage of intellectual property to move their company forward. That's what Cisco's all about.

This year, for many channel partners, was about survival. What will be the themes -- what will we be talking about -- when we convene for Partner Summit in San Francisco this April?

Growth and demand. The opportunity of UCS partners, and how we're prepping these networks for video. There's unbelievable growth opportunity, and we'll be talking about how we take advantage of that growth.