Cisco's Partner, Distribution Strategy For Tandberg Solidifies

No sooner did Cisco complete its acquisition of Tandberg last year than concerns flooded in from partners about how they would get access to Tandberg video products and who in the channel would be able to sell them.

But with the Jan. 31 deadline to map Tandberg partners into Cisco channel program having just passed, much of Cisco's partner program and distribution strategy for the Tandberg portfolio has finally taken shape. Some partner concerns remain, but for the most part, Cisco VARs and integrators are ready to applaud the networking titan for a thorough integration job.

"I can't say one bad word about the team that they gave me as far as getting through the program," said Robert Swing, CEO of IVCi, a Hauppauge, N.Y.-based solution provider. "Cisco's management team goes deep, and they guided us through the whole process."

As of January 2011, Cisco had about 1,200 total Cisco and Tandberg partners. About 600 of those partners were Tandberg-only before the acquisition and are new to the Cisco channel program with the integration.

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Scott Brown, vice president of worldwide distribution, acknowledged partner frustration that the integration had taken nine months to complete. But according to Brown, the pace was deliberate, and will help all Cisco UC partners in the long run.

"Tandberg had a very different set of selling motions than what we had traditionally done at Cisco," Brown said. "It was smart to run the two channel programs in parallel since we closed the acquisition, to allow us to go through that learning process and be careful and thoughtful."

Cisco completed its $3.3 billion acquisition of Tandberg in April 2010, a move that effectively gave Cisco the No. 1 worldwide market share in business video conferencing.

At the time, however, Cisco and Tandberg solution providers sought assurance from Cisco that it wouldn't overexpose the Tandberg product portfolio and dilute potentially lucrative video opportunities for experienced video VARs.

They also craved details, especially about how would the products be distributed and who in the Cisco channel would be qualified to carry them. At the 2010 Cisco Partner Summit in April, executives said that a combined problem was nine months away.

In a November interview with CRN, Richard McLeod, senior director of collaboration, confirmed that Cisco would continue to run Cisco's partner program and Tandberg's enVision partner program in parallel until Jan. 31.

At the same time, Cisco introduced the TelePresence Video Authorized Technology Provider (ATP) program, a new Cisco ATP with Express, Advanced and Masters specializations like other existing ATPs, and a designation called Advanced Plus, for partners that are sufficiently advanced on Cisco's UC portfolio and can make a quicker jump to the Masters level.

According to McLeod, Cisco selectively invited current Cisco video and telepresence partners and Tandberg enVision partners into the ATP first, and then began inviting select Cisco UC partners as well.

TelePresence Video ATP partners have access to Cisco incentive programs like VIP, OIP, SIP and TIP, and the ordering and partner reward mechanisms from Tandberg's enVision program are now fully integrated into Cisco's own.

Next: Cisco's Specialty Distributors Confirmed

Soon after the ATP announcement, there was news on the distribution strategy. In late November, Cisco confirmed three specialty distributors for Cisco TelePresence solutions: St. Charles, Ill.-based Visitec Marketing Associates, Doylestown, Pa.-based KBZ Communications and Fort Worth, Texas-based TMDistributing.

Each is delivering specialized programs and services, as well as specific A/V and TelePresence expertise to VAR partners. That's different, Brown explained, from how Tandberg products will move through Cisco's other distributors, including its major broadline partners like Ingram Micro and Tech Data.

According to Brown, all Tandberg products will be available on Cisco's global price list for ordering by any Cisco distributor ordering for a qualified Cisco partner. Qualified distributors will be able to stock some of the Tandberg products, as yet unconfirmed by Cisco, starting in Cisco's fiscal third quarter.

"At the end of the day, all boats will rise," Brown said. "But we will continue to preserve the specialist video distribution channel that has a whole different set of skills. We can continue to leverage both worlds, and have more partners get video specialized over time, as well as have distributors provide stocking capabilities next to specialist distributors. There's a lot of market share out there to be gained."

Worldwide, Cisco partners with about 170 distributors total. It added several and dropped several others in line with the Tandberg integration, although Cisco declined to provide additional details on all of the additions and drops.

Brown said Cisco had learned a lot from its discussions with specialty distributors and partners with deep backgrounds in A/V and video integration.

"They would start talking to us about the network, and the network, to me, means routers and switches and IP and all the things you and I know very well," he recalled. "But in their world, the network is MCUs and video endpoints and pipes and scheduling software. They have a very different lens with which they view it."

Cisco declined to provide specific sales projections on how much of Cisco's TelePresence Solutions Group business would come from Tandberg products, but a spokesman said that the company's "expectation is that it will be significant and be a major driver for growth for Cisco and the distributor and partner community."

Next: Partners Mostly Satisfied With Cisco-Tandberg Integration

IVCi was one of the first Cisco and Tandberg solution providers invited to the ATP program, Swing said. Given the breadth and depth of its video experience, the company received a Master designation.

One of the most important steps Cisco's taken, Swing said, is to keep the broader Tandberg portfolio exclusive.

"You cannot get into the ATP unless you have been extended the invitation," he said. "I think they put a lot of thought into it and they did truly listen to the channels. They know they have to keep us profitable."

Swing said that in the earliest conversations he had with Cisco executives following the acquisition, they listened closely to partner concerns about overcrowding the Tandberg channel.

"When a program is diluted down, you have problems," Swing said. "You get a lot of people who just throw the systems in there, there are IP issues, degradation, all kinds of things, and integrity issues. Cisco maintains that you have to get certified around that knowledge."

Some partners are still in wait-and-see mode with regard to Cisco's Tandberg integration.

Mark Winner, vice president of sales at SMS proTec, a Sidney, Ohio-based solution provider, said that if Cisco limits the interoperability of Tandberg products with other video endpoints and infrastructure, the appeal of those products will flounder.

"I understand what they're doing with regard to its use with their own product lines," Winner said. "But where my curiosity is is what are they going to do with other open systems? A lot of companies have different brands of video conferencing and require open systems to make things work. If I say, 'This can only talk to another Cisco-enabled unit,' well, that's not going to fly."

Cisco partners are busy carving their own paths to address the growing demand for video solutions. SMS proTec has, along with its Cisco practice, also focused on video products from upstart competitors like LifeSize Communications.

Swing and IVCi, on the other hand, are sticking with their stalwart brands, Cisco and Polycom, for video needs.

"I think today we have the major brands you need to be successful," Swing said. I haven't seen LifeSize in the market all that much since they got bought by Logitech, but we are always exploring just to see how they compare and how they integrate," he said.

Elsewhere, bigger Cisco solution providers have gone the acquisition route to up their video capabilities. National VAR ePlus, for example, acquired a Tandberg platinum partner, Interchange Technologies, in line with the formation of its Advanced Audio and Video Solutions practice.