Cisco Mounting White-Label Meraki Offensive Aimed At Driving Recurring Revenues

Cisco is mounting an unprecedented white-label, service-driven initiative through Meraki aimed at providing channel partners with new and unique ways to drive recurring revenues to make managed services 20 percent of Cisco's $1 billion in annual Meraki sales.

The San Jose, Calif.-based networking giant says it has opened up APIs, and licensing models and improved its Meraki MSP Dashboard with the goal of making networking simpler to install, deploy and manage for both partners and customers.

"One of the top priorities is how we can take partners selling traditional services, installation services, and how we can enable to them to sell more value-added services using our APIs -- that's a big push for us," said Ghazal Asif, director of global channel sales for Cisco Meraki, in an interview with CRN.

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"Before, we had exposed one or two APIs specifically for service providers, but now we want to make our platform open, programmable and extensible and the partners and service providers really like this idea of being able to build additional applications on top of the platform," she said.

Meraki managed services currently make up less than 10 percent of annual revenues for the product, but Cisco aims to move that needle to 20 percent, said Asif.

There's been over 10,000 global integrations using Meraki APIs and Cisco has already built a 600-person developer community around the cloud-managed Meraki portfolio which includes switches, security appliances, phones, wireless LAN, security cameras and mobility management.

"Meraki gave us the ability to go full-stack with our customers," said Manak Ahluwalia, President and CEO of Aqueduct Technologies, a Cisco Gold partner named in CRN's 2016 MSP 500 Elite 150 list. "Meraki enabled us to go develop the multi-tenant environment in the cloud to support these customers, deploy these technologies, have a shared view with them and we have the ability now to actually provide a much greater value."

Aqueduct's Cisco Meraki business grew 50 percent in 2016 capturing upwards of $7 million in revenues for the Waltham, Mass.-based solution provider. Ahluwalia projects that white-labeled Meraki solutions will represent 20 percent of the company's overall recurring revenue sales over the next year or two.

Aqueduct's Meraki-as-a-Service offering, which is sold under the Aqueduct brand, currently manages some 250 devices for 10 customers, providing services around networking, security and end-user help desk along with consulting work.

World Wide Technology, a $7.5 billion solution provider and top Cisco partner, manages tens-of-thousands of devices with Meraki that include many Fortune 500 companies, according to Robert Elfanbaum, general manager and vice president of WWT's Asynchrony Labs.

WWT has been creating custom APIs and mobile solutions on Meraki, which has redefined the solution providers longtime go-to-market strategy with Cisco to better incorporate APIs.

"In WWT's business, our go-to-market is now not selling Cisco, but it's selling what the Cisco stuff can then enable through the applications that ride on it," said Elfanbaum.

"We just started a project with a large national retailer that's trying to take the provisioning API for Meraki and allow devices to almost self-identify and self-authenticate against their infrastructure," said WWT's Elfanbaum. He added that WWT is "creating scripts to allow devices to automatically connect to the network, based on criteria that [it] can implement through [Meraki's] API."

Jamie Aiello, vice president of services for Annese & Associates, a Clifton Park N.Y.-based Cisco partner, ranked No. 243 on CRN's Solution Provider 500 list, has built a Network-as-a-Service practice with Meraki which grew 30 percent in 2016.

"We're running on average about 45 percent to 50 percent profit on these [Meraki] deals from an operating perspective. That's [includes] cost, support, everything and these aren't small deals," said Aiello, adding that the company is anticipating Cisco Meraki revenues to increase 60 percent in 2017.

With Meraki, Annese built a cloud-managed architecture that provides centralized visibility and control across any number of distributed locations to simplify enterprise networks by managing wireless, switching, security and mobile devices.

Annese has several colleges and universities as Meraki customers, and it provides them with hardware and managed services, site surveys, consulting and operates a help desk for customers as well.

In 2013, Cisco built the Meraki MSP Dashboard, a portal that allows partners to support multiple customers and easily add new capabilities. The portal provides unified management of mobile devices, Macs, PCs and the network from a centralized dashboard. More recently, though, Cisco has opened up the Meraki MSP Dashboard API, making it easier to use and integrate with other web and networking applications. Also, Cisco made it possible for MSPs to customize aspects of their MSP Dashboard for their users and customers.

"You go into the Meraki portal and say, 'I'd like to add on this type of capability' and they already have it defined and built the APIs – it's more of a plug and play with us as opposed to custom development, that's fueling a lot more of the ability for us to leverage the technology," said Aqueduct's Ahluwalia. "So it's easy for us to take it to our customers almost immediately. I don’t even need to send an engineer there to set it up. I just have the customer plug it in; we'll get on a WebEx to show them how to set up, they get it, they play around with it – done … Our customer loyalty and satisfaction is through the roof."

Meraki has 1,900 partners using its custom branding feature globally, according to Cisco, with 10,500 solution providers selling Meraki, which now has an installed base of 160,000 customers.

Channel partners are building custom solutions around location analytics, proximity-based applications, provisioning, asset tracking, custom splash pages and Meraki call desk services.

"Some partners are not white-labeling and themselves providing a managed service, and some are white-labeling," said Cisco's Asif.

There are currently 50 third-party certified applications being used with Meraki; Cisco expects that number to double within the next six months. Vendors running applications on Meraki include location-based services specialist July Systems; Zenreach, a marketing platform startup; and Purple WiFi, a network software and location services provider.

"We've developed some resources so that technology partners can very quickly start to build on the Meraki platform," said Pablo Estrada, director of marketing for Cisco's Cloud Networking Group.

Cisco said Meraki partners can move licenses from one customer to another. The partner owns the title with the ability to transfer the licenses between customer networks.

"The partner holds the title, which means that if they're holding the license, they're also holding the hardware itself if that's the model that they want," said Cisco's Asif. "At no point, is Cisco as the service provider saying, 'This is our license.'"

Although Meraki was considered more of an SMB play a year or two ago, there is now a strong demand from enterprises, according to WWT's Elfanbaum.

"I'm finding there's a lot of interest and demand on multi-branch and multi-locations [in] very large organizations, which is different than a couple of years ago," said Elfanbaum. "The demand for [Meraki] in the Fortune 500 for the right use cases is definitely increasing rapidly."

Elfanbaum said Meraki had had a "significant impact" in WWT's growing profits in 2016. "There's clearly opportunities to innovate around the marriage between the network and the applications that ride on it," he said.

Partners say they're planning to convert Cisco's traditional networking customers to Meraki when refresh opportunities arise.

"When you look at [Cisco] ISE and wireless LAN controllers and Prime and then the route-switch of that, it's not easy to implement, and it's not easy to maintain and for many it's overkill – your killing a fly with a sledgehammer," said Aqueduct's Ahluwalia.

"Meraki fits for a lot of people, and you get that enterprise networking-class service in a very simple management structure, and format and that's the key. It's absolutely something that makes networking far easier … It's absolutely a game-changer."