Partners are urging Cisco to release more details about the channel strategy and potential impact on margins and unified communication as a service (UCaaS) sales after Cisco unveiled its plans today to acquire BroadSoft.
"The problem is for a UCaaS provider like me – knowing that the hosted model, that cloud model works better when it's a direct model from the OEM or vendor – is that now I'm competing with Cisco at some level," said Edward Sohn, chief architect at NexCloud, the Cloud Services Division of Ubisec Systems, a Brea, Calif.-based solution provider and Cisco partner.
Partners said BroadSoft will make Cisco's flagship Spark platform more accessible and extensible, while also expanding market share in a new customer demographic. "But the concern is, how is Cisco going to adapt this strategy and this type of service offering in a go-to-market for the channel?" said Sohn. "We are now going to have the ability to sell BroadSoft, but BroadSoft strength has been working with a handful of large telcos. Then those telcos are the ones that sell into the SMB and enterprises. We'll never going to be able to crack that egg or get into that market because that's controlled by the large tTelcos."
Cisco did not respond for comment or an interview on the matter by press time.
One top executive from a solution provider and Cisco Gold partner was worried that his investments in hosted voice offerings and Cisco Hosted Collaboration Solution (HCS) would go to waste.
"Many partners made lots of professional services building these on-premise architectures. If that goes away, what are we going to do? What is going to happen to my CCIE voice that I invested a lot of money in? What's the future for my CCIE collaboration guy … more importantly, how do we make money out of all of this and keep margins the same?" said the executive, who did not wish to be identified.
Partners said Cisco needs to explain its UCaaS strategy and how BroadSoft solutions will be combined with Cisco's new Spark Flex Plan.
Solution providers are urging the San Jose, Calif.-based networking leader not to wait until next week's Cisco Partner Summit to reveal its channel go-to-market strategy with BroadSoft.
"Now you've bought BroadSoft and expanding your offering to the SMB. You need to tell channel partners, 'You've invested in HCS or in your own multi-tenant collaboration solution -- our platform will allow you to make the same services margin and same margin on subscription, but you just don’t have to deal with the hardware and perpetual licenses.' Help partners map that out," said the Cisco Gold partner executive.
"If I have an existing customer, why would I want to go move to BroadSoft from Spark or whatever the Cisco platform is and give up my margins? They need to talk to partners doing that today and make sure the profitability and rebate programs are aligned so the existing partners who are already doing it are not impacted by this," he said.