CRN Exclusive: Cisco Mounts Software Offensive, Putting Partners On Road To Recurring Revenue

Cisco Systems is mounting a software offensive by adding incentives for solution providers that adopt the vendor's new software integrator and life-cycle adviser roles.

More than 2,400 Cisco partners have already "transacted" a Cisco ONE software deal and the vendor has more than 8,000 Cisco ONE software customers since launching the software suites last year, according to Jason Gallo, global director of Cisco's enterprise networking and software partner go-to-market.

"And we're just over a year into that Cisco ONE offering so that's an uptick of literally zero to 2,400," said Gallo in an interview with CRN. "Cisco is going through a transformation to become more of a software-centric company -- not to become a software company, but how do we take advantage of some of the ways in which we're organized and our overall framework to include software approaches."

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The San Jose, Calif.-based networking giant is striving to enable partners to make more money with software through roles such as software integrators and life-cycle advisers that generate recurring revenue, according to Gallo. Wendy Bahr, senior vice president of Cisco's Global Partner Organization, unveiled the two new software roles on stage at Cisco Partner Summit in March.

Those adopting these roles, which became available to select partners May 2, can now apply for and earn new rewards that include performance incentives, referral incentives and dedicated sandboxes, APIs and DevOps toolkits. Enrollment for new channel partners begins Aug. 1 at the start of Cisco's fiscal year 2017.

"There's a new breed of incentives that Cisco has designed to care for -- not just the traditional sale and use -- but really for when a partner preforms adoption services and helps the customer to realize the value of what they purchased the software for," said Grace Lo, global director of business development for Cisco.

The roles provide opportunities for partners to monetize their investment in Cisco software by creating their own high-value, high-margin services and for generating recurring revenue, she said.

The life-cycle adviser role is about building capabilities and practices for adoption and expansion of software and renewals. The role ensures customers get the full value of their investments in products, services and solutions.

One solution provider who is adopting the life-cycle adviser role is Calgary, Alberta-based solution provider and Cisco Gold partner Long View Systems.

Kent MacDonald, vice president of converged infrastructure and network services at Long View Systems, said the role is "a combination of understanding the technology customers are acquiring from Cisco, but also understanding the business and the various user groups within the customer to help identify how they can adopt these feature sets and functionalities to work more effectively, communicate more effectively and be more agile in today's changing marketplace."

Partners seeking to develop a life-cycle adviser practice should hire customer success managers, invest in software asset management tools and define adoption use-case catalogs, according to Cisco's Gallo.

The software integrator role is based around programmability, integration, API management and DevOps. The integration role is critical to digitization to help organizations bridge the gap between applications and the network infrastructure.

Partners can build their own practice by hiring software integrators or by partnering with other Cisco partners that specialize in software development, Gallo said.

"[The importance] of software to the channel is massive," he said. "The type of flexibility that customers are demanding can only happen through software. So we as a company internally are rotating to benefit from some of those software-centric approaches and we feel our channel will rotate as well."