CRN Exclusive: Cisco Channel Chief Bahr Talks Apple Partnership, HPE Competition, And Bringing OT Partners Into The IoT Channel Mix

Wendy Bahr On Apple, HPE, Partner Summit

Fresh off Cisco Partner Summit 2016, Cisco's channel chief, Wendy Bahr, sat down with CRN Executive Editor Jennifer Follett and Associate Editor Mark Haranas to talk about the highlights from the conference as well as competition with Hewlett Packard Enterprise and how partners should take advantage of Cisco's partnership with Apple.

Cisco Partner Summit was held in San Francisco from Nov.1 to Nov. 3 where the San Jose, Calif.-based networking giant unleashed a slew of new products and channel promotions. Bahr, senior vice president of Cisco's Global Partner Organization, also talked to CRN about bringing operational technology partners around the Internet of Things into the channel mix, crafting a new version 2.0 of its Enterprise License Agreements for software, and the importance of Cisco's Customer Success team aimed at driving channel sales.

Some partners we've talked to said HPE is more nimble now and feel that HPE is going to be much more competitive over the next year with Cisco. Is that what you're expecting?

Not really. They have shed their services business and we've competed with them for a long time in a lot of different areas, much like we compete with a lot of other competitors. We want to keep our eye on how we enable our partners to keep the maximum amount of profitability while being competitive and really change the conversation around a more end-to-end approach.

Unifying our data center products under a single leader is absolutely important and is what the partners have been asking for because when we had certain pieces of that profile with different leaders, we weren't as synergistic. Maybe we weren’t as nimble as we could have been. But now we've brought in [Data Center Unit leader] Roland Acra, a known entity, a really credible, highly qualified individual who also went out and very successfully had some outside experience.

What are benefits of hiring Acra [pictured] ?

We get the benefit of the best of both worlds. Someone who knows how Cisco works, who has a really strong reputation and someone who brings sort of that outside perspective to that portfolio. So David Geockeler [senior vice president and general manager of Cisco's Networking and Security Business] is to be applauded. It's a good decision. Our partners have been very positive about that as well, and they think it's going to help us rationalize what is a very strong offering even faster.

Can you explain what the Apple partnership means to the channel?

This is an area where I would like to do more in clarifying the value proposition. Basically, the co-creation of innovation between Apple and Cisco is absolutely providing our partners with an opportunity to go into enterprise customers, talk about the network, the customer and partner experience – particularly their employee experience on campus. So that this fast lane that we created isn't just the combination of Spark being on an Apple phone and being able to make a Spark call. When you make that call, you're using your enterprise network to complete that call.

If I'm in an enterprise and a lot of my employees, and even my customers when they visit, want to have the best possible experience with their mobile devices – they're going to want this solution.

What's a good example of how this Cisco-Apple fast lane works?

When you want to update your iOS, if you've got a whole bunch of enterprise employees and want them all to go the next version of iOS, and in the course of a few days they all push that button – it's a big download. Where they happen to be in an office, it tends to go just to the nearest API, the nearest wireless API. What we can do with the fast lane and the intelligence of what we built together is we can distribute those downloads so it's more balanced across a Wi-Fi network. The experience is a compelling reason, the security is a compelling reason, the quality and the speed are compelling reasons.

It's a great opportunity to look at a Wi-Fi upgrade. A great opportunity to look at digital transformation of the network and there's more to come – it's just scratching the surface.

With the rise of BYOD, is the proposition as strong for an enterprise to make a change to better support Apple products that they don't even own?

I think it's all about the experience. The productivity of the employee experience. The management of their network infrastructure. We're all using mobile devices as a part of our employee productivity. So whether they've bought my device or not, the more productive I can be – using Spark with a single push of the button and moving that traffic to the enterprise network -- I think it's a compelling value proposition.

Do you have partners that have had success selling it?

Actually we do. We did an early adopter program with customers and partners, and the partners who really spent the time to understand the value proposition of Cisco and Apple absolutely see it as a conversation changer and an opportunity to have a different conversation.

Are you working to bring operational technology partners into the Cisco partner mix?

We are. Julie Hens (pictured) in our global distribution team has been running a pilot for about the last nine months. OT partners often look like small distributors … and they're really interested in distributing the OT-like products, so they would be a good fit working with our broadline distributors and working with these specialized partners.

The taxonomy will get a little interesting because they're not really distributors, but that's what they call themselves. So they're really more like partners. So we are looking at that and they bring a lot of OT vertical expertise -- whether it be lighting, HVAC, sort of temperature-sensing like climate control, there's a lot of industry where keeping a product at a certain temperature is vital to its quality. So there's a whole industry around sensors and IoT technology keeping things like beer cold -- nobody wants a warm beer.

How much work will your traditional partners have to do themselves in that OT area?

It depends upon the IoT application. If it's something like an IoT switch for lighting, they've been doing switches forever [so] this should be an easy opportunity for them to begin to segue in. Will they need to learn more about the industry of lighting to be relevant in that space? I think they will, but that's what we're going to help enable them through some of our vertical content, training and enablement sessions.

What advice would you give these partners trying to create OT practices?

Partners should choose carefully. Try not to do too many of these all at once, but pick a particular vertical or something that's very prevalent in their geography and focus in on what the expansion of opportunity looks like with the product set and with the business outcome.

If you wanted to make a vertical IoT practice out of mining, then you should probably already be serving those mining customers from a carpeted IT environment so you can begin to bridge between IT and OT.

How are you handling ELAs with the partner base, because that's something that could be completely foreign to a lot of them.

It's a little bit interesting. Many of our partners, though, do have software experience. They've sold ELAs for a variety of companies whether it's or Microsoft or whomever. When we went out and started talking about this we asked, 'What do you like about it? What don't you like about it?' And they were pretty vocal with us. They don't want to be cut out of that additional value of adopt, expand and renew – that's an important piece. They want it to be fair in terms of not just letting a few big guys take down all of the landing bit and control the customer. They want us to stick with a value-oriented program, which is what we're doing.

Our challenge is we want to continue to improve the ease of doing business around signing up the process of the ELA. So we've got a tremendous amount of people at Cisco working on what we call ELA 2.0 – our next evolution of ELA.

So what's the aim of ELA 2.0?

To make it easier.

Working with our distributors to make sure we're including the massive base of two-tier partners in the ELA process and we're finding how we go about quoting ELAs, which is a slightly different take than quoting material on a bill of materials.

When will ELA 2.0 debut?

We've already launched. It's in flight now. But it's not a one and done, it's a constant refining of listening to the partners and continuing to try to make it easier.

Can you explain more about Cisco's UCS competitive promotion?

I mentioned HPE, but we have many UCS competitors and it's available for all competitive situations, not just HPE. It's basically an acknowledgment [that] when you're in a hard-fought space like the server space you need to be aggressive to win the business, and I didn’t want partners to think if they're in a competitive bout that we didn’t have a promotion that would offer them the best opportunity to win the business. It's just us being sensitive to the market, the landscape, the architecture.

So it's an up-front discount?

Yes. It's a discount. When it's competitive, you make sure you bring it to us. Don’t assume we're not going to go there, is basically the point. You've got a competitive situation, we've got a promotion we can apply. Bring us that deal and let's talk about it. It's just a promo.

Would that cut into their margin then?

I think it's a healthy balance between not giving the product away [and] making sure partners retain good margin. What partners tells us in the UCS business is they need to win that business to grow the business. So there's always a bit of pragmatism around, 'I want to make sure that I can get that sale. Get it at a good price for the customer, a good price for the partner and then be able to grow that business past there.'

So if you utilize that up front then you can't use VIP at the same time?

You can use VIP. You can't use the bonus on VIP. We'll still have VIP on UCS that's still a back-end rebate. It's just the up-front discount makes it a bit more competitive. We had heard from a few partners, 'Well, we don’t think you're going to go there in terms of the discount.' And we said, 'Bring us the deal. We fight hard.'

Is that because you hadn’t done it much in the past?

I don’t know why. Sometimes people get assumptions without maybe fully asking the question. So we wanted to be clear.

Can partners expect more voucher-type programs from Cisco as you become a software-centric company?

When we bundle software capabilities into Cisco ONE, into these DNA offers, we want to ensure that after it's sold that the partners are incented to go back in and activate – whether we're talking about APIC-EM or Lancope or OpenDNS – because that's when the actual value is released to the customer's outcome. We realize that's a bit new, so we're incenting via the vouchers, giving them time to participate in that.

What [partners] are going to find as an outcome is not just that we helped subsidize that, but that they're going to start having deeper and richer conversations.

Can you explain Cisco's Customer Success team and the impact are you seeing as far as how is that helping the channel?

Through a series of innovation in our processes and using tools like Gainsight, we've been able to help present more accurate, more timely data to the partners so that they can go after second-chance attachments. They can go after greater renewal. They can attach better the first time. We're doing all of this work and gaining all of this insight into the data so that we can help the partners meet those goals of attach and renew that are closer to industry averages.

We've created a team that's developing the tools, the intellectual property and the enablement to help our partners develop customer success practices of their own.

How will the Customer Success team help increase revenue for channel partners?

Partners have data on our customers. We have a lot of information as well. When we combine those two things and do the co-branded campaigns that go out and touch our customers, we get five times the amount of interaction. We get 20 percent increased positive results.

This is the next step to this journey. This evolution where it's not just about landing or attaching and renewing, this is about this move to Software-as-a-Service and licenses and ELAs.

How do you feel Cisco Partner Summit 2016 went?

Great. It really did. I was a little apprehensive doing two [Partner Summits] in 12 months, which is a challenge.

We had about 2,200 partners here … we also had over 7,000 people watching in virtual Partner Summit, which is a bit of a record as well. So this idea of having two in one year – some of the things that we anticipated happening didn't happen. And other things that we hadn’t anticipated happening, we were pleasantly surprised -- like the partners being able to connect the dots between what we introduced in March in San Diego and now how it's actually come to fruition. Things like the ecosystem partner connections and ACES [Accelerating Cisco Ecosystem Sales] and being able to build on DevNet and being able to get some clarity around services. [CEO] Chuck [Robbins] teased me and said, 'We should do one every quarter.' – I said, 'No. No we shouldn't.'

So what can partners expect for future Partner Summits?

We are thinking honestly of potentially expanding to include some of the less traditional partner types. We've done that already with ISVs but our ecosystem is getting quite broad and especially with IoT – we have an IoT World Forum that will be in London this year -- we're at that point now, in terms of the life cycle of IoT, that we can start talking to partners about more practical applications for OT and the IoT environment.

I promise that I'll take one week off before thinking about [Cisco Partner Summit 2017] in Dallas.