'In Chuck We Trust': Partners Say CEO Robbins Is Firing On All Cylinders

To say channel partners are bullish about the future of Cisco Systems under the leadership of CEO Chuck Robbins is an understatement.

Even after four of Cisco's longtime top engineers abruptly departed the networking giant in June -- along with a slew of other Cisco leaders over the past year -- partners are confident in the 19-year Cisco veteran’s plans.

Partners have said an internal power struggle is under way at Cisco after Robbins reorganized the company's 25,000-member engineering unit into four new teams. Soon after the reorganization, Soni Jiandani, Mario Mazzola, Prem Jain and Luca Cafiero -- all Cisco engineering leaders who led the research and development of several Cisco "spin-ins" including Insieme in 2012 – announced their resignations effective June 17.

[Related: Chuck's Rx: Cisco's Prescription For Subscription]

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Partners applauded Robbins' decision to shake up the engineering organization as part of a hard-driving move to accelerate the software transformation at the company.

"Chuck is doing the right thing," said Harry Zarek, CEO of Compugen, one of Cisco's top partners, ranked No. 67 on the 2016 CRN Solution Provider 500 list. "Kudos to him. It's a big gutsy move. I am a strong supporter of Chuck. He has been a channel guy forever. All I can say is we support Chuck."

David Powell, vice president of TekLinks, a Birmingham, Ala.-based Cisco Gold partner ranked No. 174 on the 2016 CRN Solution Provider 500 list, said Robbins has earned the trust of the channel and reshuffling leadership positions could be a necessity if Cisco wants to successfully transform from selling network hardware to software and services.

"They've had a lot of people that have been trusted by the partner community -- like Edison [Peres] and others, leave," said Powell. "And that's OK. We understand Chuck needs to build his team and needs to get the right people around him that he feels he needs to go forward."

Partners said Robbins has made their Cisco business more profitable in 2016 and they aren't expecting revenue to slow down regardless of the leadership changes.

"It will definitely be the biggest [revenue] year for PCM, without a doubt, around Cisco," said Phil Mogavero, vice president of Advanced Technology Group network solutions and regional chief technology officer at El Segundo, Calif.-based PCM -- a $1.5 billion technology integrator that partners with Cisco, ranked No. 28 on the 2016 CRN Solution Provider 500 list. "By expanding their value-based offerings in the area of security and collaboration, it's providing PCM with greater opportunities to increase our margin and profits with Cisco."

Mogavero -- who years ago conducted sales calls alongside Robbins when the CEO was a Cisco sales executive -- said despite the executive departures, Cisco's strategy remains solid and aligns with the industry shift to the cloud.

Under Robbins' leadership, Cisco is providing the channel with more margin opportunities by building its product and services portfolio around hot markets like security and Software as a Service.

For its recent third fiscal quarter, Cisco beat Wall Street estimates through double-digit growth in its security, collaboration and services business. For the quarter, Cisco's security business increased 17 percent year over year to $482 million, collaboration increased 10 percent to $1.07 billion year over year, and services jumped 11 percent year over year to $3.13 billion.

"Chuck is accelerating innovation so there [are] more reasons to have conversations with our customers around Cisco. Whereas for a while -- as they were trying to figure out their way forward -- there was a bit of a delay or just not a lot of sense of urgency around innovation," said TekLink's Powell.

"Cisco is doing a better job in understanding how we make money," he said.

Robbins’ effort to increase innovation in areas such as cloud, security, the Internet of Things and software is driving profit for the channel, said partners. The channel today represents 85 percent of Cisco's annual revenue, according to a new report by financial services firm UBS.

New product innovation includes the launch of several IoT-focused products and the unveiling of a breakthrough analytics data center appliance: Cisco Tetration Analytics.

With Robbins at the helm, Cisco has purchased or revealed its intent to acquire 11 companies -- most of which are cloud-based vendors. On June 28, the San Jose, Calif.-based networking giant said it would buy its fourth security vendor in the past 12 months: cloud security specialist CloudLock for $293 million.

"Chuck is letting partners go after these new roles and have relevant cloud conversations with customers – that's the big thing I see with him," said Ethan Simmons, vice president, East, for Dallas-based Lumenate, a Cisco partner ranked No. 152 on the 2016 CRN Solution Provider 500 list.

"If a partner can go out and have a relevant cloud conversation with a customer that's looking for that trusted adviser role, Cisco has better enabled partners to go out and have those conversations now," said Simmons.

During Cisco's fiscal year 2016 with Robbins as CEO, the company's popular back-end rebate program, VIP (Value Incentive Program), shifted toward incentivizing partners around software, security, digital-ready networks and SaaS, according to Cisco. At Robbins' first Partner Summit as CEO, the company said it would simplify VIP to help its channel community.

In exclusive interviews with CRN, Robbins and his top leaders laid out Cisco's vision for the future in regard to how it will transition the channel into the digital age. For the first time, Cisco is creating a network software subscription model designed to change the sales motion for its channel partners based on its Digital Network Architecture and Cisco ONE software.

"There's never been a better time to bring something innovative like this to the industry, and I think the market will welcome it," said Kent MacDonald, vice president of business development at Calgary, Alberta-based Long View Systems, a Cisco Gold partner ranked No. 85 on the 2016 CRN Solution Provider 500. "From a partner lens, we're very enthused to see the creativity and innovation versus continuing to always drive something from speeds and feeds [in] a hardware scenario."

Although partners say challenges lie ahead for Robbins, such as retaining talent and implementing a more clear cloud strategy, the future looks bright for Cisco and its channel.

"We know and understand Chuck, and Chuck knows and understands the channel. That gives him the confidence to put the foot on the accelerator and partners are happy to be on that ride with him," said MacDonald. "In Chuck we trust."

STEVEN BURKE contributed to this story.