Channel Consensus: Cisco Has Turned The Corner

Cisco has emerged from a painful restructuring as a slimmer, more focused company and, based on dozens of interviews at Cisco Partner Summit last week in San Diego, solution providers see improvements in three areas in particular.

One is systems and processes -- including time to decision and deal-making mechanics such as quoting. Another is a renewed focus on five core priorities instead of 30 to 50 "adjacencies," and third is a willingness to listen to partners and invest behind the programs they've created to push Cisco products and services.

That adds up to a near-universal acknowledgment by solution providers that they feel better off with Cisco than they did a year ago.

[Related: 10 Things We Learned At Cisco Partner Summit ]

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"I think it's a little early to tell, and we'll know for sure in the next few months," said Mike Girouard, vice president of enterprise sales at TekLinks, a Birmingham, Ala.-based solution provider. "The systems and processes have gotten easier and we're seeing that now come down to the field level, where the rubber meets the road. That's what's going to matter."

Eric LeBow, CEO of Spanlink Communications, a Minneapolis-based solution provider, said he's seen deep investment by Cisco in helping Spanlink grow its video and hosted unified communications practices, the latter of which is based on Cisco's Hosted Collaboration Solution.

"The amount of attention and resources thrown at us to help develop our strategy and grow business more rapidly, I don't think a partner could ask for more," LeBow said. "The biggest difference is the number of resources assigned to my company -- financial resources in the form of MOUs [Memorandums Of Understanding] and things like that -- to help us build out our practices."

"They're listening," said Jerry McIntosh, vice president of advanced technology solutions at ePlus, a Herndon, Va.-based solution provider. "We've noticed almost none of the background noise lately: a great field focus and a team going in the right direction. They have a lot of work to do on tools, but it sounds like they've identified ways to take costs out of the business of partners doing business."

McIntosh, like several solution providers, applauded Cisco's announcement that it would eliminate or consolidate many of its existing partner audits, and that for top partners, customer satisfaction scores would be enough to preclude an audit if the partner had no action items and wasn't implementing a full practice.

Moves such as those show a dedication to being simpler, partners said, and that was appearing in channel processes such as deal registration, too.

"We're used to taking 45 minutes to an hour to getting a deal registration ready for approval, and they've adjusted some of the [tools] to get that turned around in a matter of minutes in some cases," said Jay Kirby, executive vice president at Troubadour Ltd., a Houston-based solution provider that recently merged with Dallas-based Lumenate. "We're seeing all that stuff happen much quicker, and I think there's more to come -- more on the back end that we may not see in the streets but that will help."

NEXT: The Key Moves In Cisco's Restructuring

Gary Moore, Cisco's COO, spearheaded Cisco's restructuring process after being named to his current position in February 2011. On his watch, Cisco removed $1 billion in operating expenses and completed that process a quarter earlier than anticipated.

Moore said Cisco's operations team has 29 key performance indicators, measured every quarter to chart Cisco's progress.

"[We're] focused on ease of doing business," Moore told CRN in an exclusive interview during the show. "Simplifying the portfolio. Redirecting the R&D spend. Bringing more accountability to the way we operate."

Cisco's restructuring was handled using an all-internal committee with no outside consulting, and Moore said the team kept an eye on what particular moves were going to have the most impact soonest.

"We had to keep our operating expenses in line, had to redirect the company and then, at the end of that, think about how do we build this into our DNA," he said. "Today, as a leadership team, we're much better managed, and we have much better visibility and accountability into what we're doing. The whole team is focused on driving profits faster than revenue. And we focus on innovation and the things that really do drive the network."

Moore pulled several executives from the various engineering, sales and services teams -- for example, Angel Mendez, senior vice president, Cisco Transformation, who came over from the supply chain team -- to report into him and focus on "the things in the seams," Moore said.

"What are the hand-offs we're not making right?" he explained, when it comes to how various Cisco teams align to go after customer opportunities.

In a much-publicized move, Cisco also disbanded the thicket of councils and boards that had kept executives tied up in constant, decision-slowing meetings.

"That was a major decision to make," Moore said. "It put too much of a tax on our leadership. That's the pure and simple answer. Every one of those councils and boards had meetings, had roll-ups, had finance people. They had all this work going on that wasn't customer-facing."

Moore said Cisco has generated more than 1,000 ideas of how to improve the business by surveying its employees.

"We have 70 we're going to attack," he said. "It's heavy lifting, but it's good stuff."

NEXT: Cisco Distributors Weigh In

A number of Cisco's major distributors, which are able to see first-hand any improvements in Cisco processes, said the right moves have been made.

Several distributors cited presentations made at Partner Summit by Scott Brown, vice president of distribution, worldwide channels, who walked distributor attendees through operational changes and solicited feedback.

"Scott walked us through about two hours on how they were going to simplify the business, and we see that when Cisco gets focused, it brings results," said Bob Dutkowsky, CEO of Tech Data, Clearwater, Fla. "There's less bureaucracy now and more flexibility. A few years ago, that's not something I think they could have thought through as well. And if they're more responsive, it cascades down into our world of the channel, which makes them more competitive."

"Scott came in the last year and a half and has really done it," said Andy Banks, vice president, North America, for the Comstor business of Westcon Group, Tarrytown, N.Y. "He's a real execution guy, and overall they have become a much easier company to work with, particularly in the ordering process and things like CBN [Channels Booking Neutrality, a program addressing up-front discounts on project orders for Cisco distributors]."

"The quoting is much simpler, so is the order management, pricing and the back-end programs," added Ken Bast, vice president and general manager, advanced technology, at Ingram Micro, Santa Ana, Calif. "We're still seeing some tie-up on the supply chain. I just can't tell a lot of my customers six weeks for a server, and while some resellers are willing to put up with that, not everyone is. I think they're working on it."

Recent meetings with Cisco executives have been useful because Cisco is devoting resources to understanding and solving distributor problems, not just providing a sounding board, said Peter Gambino, Ingram Micro's vice president, Cisco business unit.

"They're flying people out to spend two days looking at tools, how many steps they take and how to fix them," Gambino said. "I've seen that in the last six months -- it's been a part of partner-led, at least in my mind. There's this attitude of 'let's get closer to what's really happening.' When someone asks, 'What could I be doing better?' and you say 'X,' they might not really know what that is. They have to sit down and you have to show it to them."

The distributors agreed that Cisco was delegating more responsibility to them when working through partner programs and order logistics. That focus bodes well for Cisco improvements to continue, they said.

"This market doesn't sit still," said Tech Data's Dutkowsky. "When you're small, you can move rapidly. When you're big, you start to get slow. The dip Cisco took is a wake-up call and they had go get nimble again -- they had 40 focus areas and it's now down to five. No one can be good at 40. They'd gotten big and distracted."

NEXT: Cisco Partners Tout Technology Practices

The renewed focus by Cisco is allowing partners to spend less time worried about Cisco field engagements and more time on their Cisco investments.

"They went through a lot last year, and that could have caused a lot of disruption," said Tony Balistrieri, vice president of partner strategy at FusionStorm, a San Francisco-based solution provider. "But they're going back and getting their market share, anything they've lost. We're growing with UCS [Cisco's Unified Computing System] and we sell a lot of high-end switches, but mobility and UC are major parts of our business, too. They're coming in, giving concise messages and are a great team to work with."

"They are listening," said Pete Belyea, president of Teracai, a Syracuse, N.Y.-based solution provider. "Cisco's always listened better, I think, than any of the other manufacturers, but we have seen that greater willingness to understand our feedback."

Harry Zarek, president and CEO of Compugen, a Richmond Hill, Ontario-based solution provider, said Cisco's new Services Partner Program is a prime example of Cisco converting partner feedback into actions.

"We steered them in this direction," Zarek said, referring to partners urging Cisco to build profitability programs around its fast-expanding services businesses. "And what you see now is a real 'get on with it' attitude from Cisco in the field."

Customers also are believing in Cisco's architectural visions, solution providers agreed, as they make their bets on next-generation cloud infrastructure.

"We started down the architecture path before Cisco did and today, the data center especially, is a land grab," said Mark Melvin, CTO of ePlus. "If you win in architecture, you're going to be in the game awhile. It's hard to take an architecture out. If you're not in architecture, you're not going to get a seat at the table."