10 Key Cisco Channel Events From The Past Year

Since Last We Met

Cisco is a definitely leaner, definitely meaner organization since the last Cisco Partner Summit in March 2011, what with a big corporate slim-down as part of its overall restructuring and a declared strategy to call the competition -- HP, Juniper, Huawei, you name it -- out on the carpet when necessary.

As Cisco partners prepare to gather in San Diego for 2012 Partner Summit, here's a look back at 10 key events in the Cisco channel that kept partners buzzing over the past 12 or so months.

March 2011: Stake In The Cloud

The past year will be remembered for a lot of things Cisco-related -- some Cisco would surely like to forget -- but it was the year when the vendor's cloud strategy really came into view. At the 2011 Partner Summit in New Orleans, Cisco debuted its Cloud Partner program, organizing Cisco solution providers into cloud builders, cloud providers and cloud services resellers. Later that year, in December, Cisco rolled out a cloud framework called CloudVerse as a way to organize how Cisco's unified data center, intelligent network and cloud applications come together to provide cloud architecture for customers making the transition.

April 2011: Good-Bye, Flip

The Flip videocamera certainly wasn't the only key piece of Cisco's consumer-focused strategy, but it has come to symbolize a Cisco that had lost its way -- taken its eye off the enterprise networking ball, some partners would call it -- chasing consumer and other adjacent pursuits that didn't quite fit its culture nor paid handsome returns.

Cisco last April said it would kill off the Flip camera it had acquired with Pure Digital in 2009, and since then, more consumer-leaning products also have bitten the dust. The quietest kill-off of all was Umi, the much-hyped personal Telepresence unit that Cisco ceased selling in early December.

April 2011: Chambers' Call To Action

In retrospect, it was one of the most dramatic moments in Cisco's recent history: Chairman and CEO John Chambers penned a nearly 1,500-word memo indicating that Cisco had disappointed investors, confused its employees and lost credibility in the market. It also was the moment when Cisco's painful, lengthy restructuring effort began in earnest. Chambers promised a "number of targeted moves in the coming weeks" to right the ship, and nearly 12 months later, Cisco is thousands of employees lighter, less focused on "adjacencies" and more focused on core market priorities. It also has won over skeptical solution providers worried that Cisco had gotten terminally distracted with too many priorities and too much time mired in bureaucracy.

July 2011: Catalyst For Competition

Cisco finished off a portfolio-wide refresh of its Catalyst switch lines last July with an update to its top seller, the Catalyst 6500. The release of the new Catalyst, which occurred during Cisco Live in Las Vegas, set off a back-and-forth competitive volley between Cisco and HP, one that had each vendor questioning each other's technology claims. It was one more sign that just because both Cisco and HP were having challenging years -- HP was a few months away from booting CEO Leo Apotheker and Cisco had just entered restructuring -- the competitive fire that's existed between the two titans for several years refuses to die down.

September 2011: Kick HP When It's Down

Just because Cisco was restructuring didn't mean it couldn't get aggressive and, if anything, Cisco was more outwardly competitive in 2011 than at any other time in its recent history. Chief among its moves was an internal memo from Cisco global sales boss Rob Lloyd urging Cisco salespeople to take advantage of a significantly weakened HP -- saying that HP's then-plans to spin off its PC business could result in "lower gross profits, price increases" and a weakened HP brand. Lloyd, who in a recent interview with CRN continued to portray HP as making life difficult for partners, said at the time that HP was "struggling to provide a clear direction and strategy, leaving employees, customers, financial markets, industry influencers and their channel thoroughly confused."

September 2011: Partner-Led Powers Up

Give Cisco credit for one thing: It said the channel would see more, not fewer, resources even with the ongoing corporate restructuring and in September 2011 it put its money where its mouth is, pledging $75 million in new resources for partners during its fiscal 2012. The crux of the investment was a new strategy called partner-led, in which Cisco is theoretically driving more sales to SMB and midmarket customers through partners, with them taking the lead on everything from capturing deals to the post-sale logistics. It's a substantial focus for Cisco, which does more than $7 billion in SMB and midmarket sales.

Andrew Sage, well-known to partners for his previous role running small-business channels in Cisco's WWPO, is now leading the effort as vice president, worldwide partner-led. Sage and other executives have hinted to CRN that Cisco will be making more announcements related to partner-led at Partner Summit. Many of Cisco's big announcements throughout the year, from the SMB networking products it debuted this week to the hosted video offering, Callway, it launched in September, address this segment.

October 2011: Ship-Jumping Continues

Turnover is a realistic -- and in many cases, needed -- part of any big restructuring effort, but Cisco has seen a particularly sizable exodus of major executive talent in the past year, not all of it related to early retirement offers.

One of the biggest names was 19-year veteran Manny Rivelo, former senior vice president, engineering operations and systems, who left for a top security and strategy post at F5 Networks in October. Rivelo was hardly the only marquee name, however. Cisco has lost more than 30 key executives since January 2011, and the exits have kept coming into the new year, the most recent being Laura Ipsen, former Cisco senior vice president and general manager, Connected Energy Networks.

December 2011: Rules of Engagement

One area for which Cisco has been consistently applauded by partners is its services strategy, which partners agree is both lucrative as far as channel-oriented services programs go and a decidedly different approach to the market than that of HP, IBM, Dell and other large Cisco competitors. Services now account for more than 50 percent of Cisco partner revenue, and services overall are a roughly $10 billion contributor to Cisco's $43 billion top line.

In December, Cisco made available to channel partners a Rules of Engagement document that outlined, in meticulous detail, everything from how Cisco compensates its sales reps specific to services and how it qualifies Cisco partners for services opportunities to the formal escalation process for partners with field conflict. More news on Cisco's services strategy is expected in San Diego.

February 2012: Presidio Expands

In one of the biggest channel M&A deals in recent memory with direct bearing on the Cisco channel, Presidio acquired BlueWater Communications Group and named former BlueWater boss Bob Cagnazzi its new CEO, only a few months after buying another Cisco Gold powerhouse, INX. The real news, however, is that the Presidio-BlueWater blockbuster was one of several big deals, suggesting such consolidation is just getting started.

Jim Sherriff, Cisco's U.S. and Canada channel chief, described the consolidation as "natural" in a January interview. "I think you're going to see a natural evolution and segmentation of the VAR community," he said. "Right now is a great time to be a Cisco reseller, and a consequence of that is there is a lot of equity coming into the space and valuations are high. That'll create more transactions because of how positive the environment is. So I do think you'll have more mega-players than we have today. But you'll also have more deep specialists that are distinctive around one or two things they do better than anyone else.

March 2012: NDS For $5 Billion

John Chambers said during Cisco's February earnings call that Cisco would once again pick up its traditional pace of frequent acquisitions and, along with a few smaller, tuck-in-style buys throughout the past few months, came a whopper: $5 billion in a planned gobble-up of U.K.-based NDS Group.

If all goes well -- and NDS doesn't have the most sparkling reputation in the world, it must be said -- it'll mark Cisco's largest acquisition by revenue size since it bought Scientific Atlanta in 2005 for $6.9 billion. Cisco the hunter has returned in a big way, it seems.

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