CRN Exclusive: Cisco Global Sales Leader On Becoming 'Fully Automated,' Tetration And Where Partners Need To Add Software Capabilities

Cisco's Sales Future

Channel partners looking to skate to where the puck is going need to pay close attention to Cisco's global sales leader Chris Dedicoat, who says adding software capabilities, enhancing automation and security is the wave of the future for the networking giant.

Dedicoat is executive vice president of worldwide sales and field operations at Cisco and has held various global executive roles inside the company for more than 20 years. In an interview with CRN at Cisco Partner Summit 2016, Dedicoat explains Cisco's channel sales strategy around software, service providers, driving simplicity, its new Customer Success team and the capabilities partners will need to build up to grow alongside San Jose, Calif.-based Cisco.

Can you point to one area you feel is going to be the most impactful as far as growing sales for the largest number of solution providers?

I would say that security is the No. 1 consideration from our customers, and rightly so. As they look to orient their company more to digital work streams, they need to really put focus on the security of their intellectual property and how they protect for the future.

That has the greatest short-, medium- and long-term [opportunity for partners] and is the most important from an end-user and customer perspective.

You said partners need to enhance their software capabilities over time. Can you talk about that and what you need to see?

The industry without question is migrating toward, 'How do you provide demonstrable value in the business outcome for my business?' As a consequence of that, our partners need to look at which of the industries that they're going to try to add the most value in. They may participate in many, but they need to carefully think about what are the verticals they're going to add the most value in, and elements of that value will be delivered through software.

[Partners] have to build that software capability, and that's the same for a customer, but they have to build a software capability in the verticals [where] they believe they can provide the most success -- and that's really based upon elements of their history and their willingness to have an investment profile. Some industries are going to be expensive to go into.

What is an industry you see partners having financial difficulties entering?

The manufacturing industry, for example, will be because [the Internet of Things] will be led from the manufacturing world -- that's a difficult one for many companies to get into. We need to help some of our partners get into that marketplace.

So you want to see channel partners adding more development capabilities and creating software that's specific for verticals?

Yes. Some of the partners that are doing that very well are having tremendous success and we're collectively being able to deliver against real business outcomes into the marketplace as a consequence of their value-add around application development.

Why do you feel that's something that needs to happen in the channel?

The channel is very well positioned from the heritage of understanding technology and being able to position that technology as a business outcome in a specific vertical, where for us, we could not be experts across all those verticals. It would take us too long, and candidly, I think we'd struggle to do it.

So we may provide some specific capabilities in areas, for example, service providers because we have to provide software value on top of the network in the service provider space.

Can you name one specific vertical that Cisco is focusing its software capabilities around that partners should be looking into?

We will probably do more in the manufacturing space because that's one of the biggest verticals that use the Jasper [Technologies] platform that we acquired, and we'll need to do more in the whole industrial Ethernet move. We need to do more ourselves in that industrial Ethernet space because the large manufacturers require us to.

Some of the people that participate in manufacturing, particularly the robot manufacturers, they want us to do something directly with them, which is why we've worked with companies like Fanuc to build software capability on top of our network that allows the robots to interact with the IP networks, which is not what they did historically. There's some verticals which we need to build some capability ourselves, but in software capability, we feel that our partners are very well positioned.

As you move more toward becoming a software-centric company, do you see Cisco adding different types of voucher programs to incent channel partners?

If you're going to ask a partner to go into a new area, you've got to help them in that area. You've got to help them go into that area and carry that responsibility for a period of time and by doing it with a voucher system gives them that incentive initially to go and invest and it allows us to participate in the investment and not put all the burden onto our partners. If we would want to do that in another area, the voucher system -- which is relatively new for us -- seems to work. It's been very successful.

We're always trying to do new things, different things.

What makes Cisco's Tetration analytics platform such a differentiator in the data center?

When you look at a data center inside a large enterprise, the difference between that data center and a cloud-native data center is that the cloud-native data center runs a relatively small number of applications. In the enterprise world, they run hundreds of applications and the complexity in those enterprise data centers around how you create virtual machine structures means that it takes a huge amount of time through consultants to understand what's actually going on in the data center – what's the source, what's the data path, what's the destination. What Tetration does is allows you to understand data flows and allows you to do that through a piece of technology.

How would partners deliver services around Cisco's Tetration ?

It allows you to insert sensors around the data center and build a picture of where the data flows are, what applications are relying on what resources, and for a partner that's a huge value-add if it can do that through technology because not all of them could do it through having a rich set of consulting resources.

It's an opportunity for partners to deliver it as a product but also to deliver Tetration as a service, and that's really why we're trying to deliver elements of it as a product, but also to be able to deliver it through a cloud-based delivery model.

Are a lot of partners working with Tetration now?

It's increasing. I wouldn't say it's a lot at this moment in time because there's a fair amount of investment and understanding that they need to put into it. So like always when we introduce a new product, we're spending time with partners we believe that can have the greatest short-term success because they actually have [the confidence] that we can train [them] in the short term.

Can you talk about hiring Roland Acra to lead Cisco's data center charge?

He's an incredibly bright mind. I call him an engineer's engineer – he's a true engineer. Engineers like working for engineers. As a consequence of that, he's going to bring a lot of value from both his time at Cisco, but also his time at startup companies. He brings that agility around how you develop technology and he has an expansive mind. He has a great consultant mind because of his history as well. He brings a lot to the company and that will help us in our need to constantly innovate and innovate faster. His knowledge of the cloud world and the data center fits closely together.

Do you think channel partners will see pretty tangible benefits of his presence?

I do. They'll see the innovation be delivered pretty quickly.

Cisco went from 70 monetization models down to seven. How did you do that process?

As we have grown, partly through acquisition, there's different monetization models that you inherit when you acquire companies. What we've tried to do more recently is to say, 'Going forward, if we're going to simplify our business, if we're going to make it easy for partners and easy for customers, we can't continue with 70 monetization models. We need to choose a set of monetization models that we believe that we automate and we believe that we can deliver the most value through.'

Broadly, what do these seven monetization models look like?

At one end, it is the provision of technology with standard 30-day terms of payment, which is one of the business models we've had.

The other end of the model is to be able to provide services, SaaS-based offers from our cloud like OpenDNS, which is a [monthly recurring revenue] or [annual recurring revenue] monetization model to our customers.

Then in between those, there's variance of it. But that's the sort of scope that we're trying to do and behind all of it we want to be able to fully automate so that our interaction with the channel is as digital and as automated as possible.

Automation has been a key theme throughout Partner Summit. How can a channel partner monetize automation as something they're talking about to their customers?

One of the discussion points is always around the provision of outsourcing or managed services. The principle of outsourcing was always, you've sold at the price and then you recovered margin over a period of time. The market has moved on significantly from that point. Now the providers of managed services or elements of out-tasking and outsourcing, the way that you provide the value is through the automation of process. For many of our partners, it allows them to deliver a richer set of services, which they can be profitable in. The automation through technology, rather than just doing that through people, has forged them the ability to do that quicker and more effectively.

How will monetizing automation help Cisco?

For us as a manufacturer, making our products easier to consume, provision, manage and orchestrate is vital for success in the future because your customers will always now evaluate you through what the total cost of ownership is, and a major element of the total cost of ownership is the cost of people and the cost of running it.

We need to make sure that we're able to automate every single piece of technology we sell and we need to arm the partner with that capability to deliver a service to their customer that leverages that automation.

Automation could take some of the mystery out of things partners used to do themselves, places where they used to make margin. Is there concern among the channel?

I would say two years ago, maybe there was. Now there's an inevitability that that's where the market is going. The advent of cloud and what cloud provides to the customer means that everyone understands that's the way the market is going. The partners recognize that's what they must do and that's how they build their future success and future profitability.

Can you talk about what Cisco's team of 3,000 Customer Success employees do and how the channel will see evidence of that?

One of the first things that I did in my role was to look at not just the product business, but the services business and say, 'How could we better deliver services and products collectively to our customers and partners?' I took a decision which at the time maybe people questioned, which was I wanted to put that in the Partner Organization because I felt that the biggest interaction that we have every single day – because 90 percent of our business going through partners – is not directly with the customers, it's actually through our partners, which is why I asked Wendy Bahr to take over the overall responsibility for Customer Success. Then we brought Scott Brown [senior vice president of Cisco's global virtual sales and Customer Success] in because he has a wealth of knowledge, not just from the U.S., but around the globe and has worked extensively with partners.

How is this Customer Success team going to help partners increase their Cisco revenue?

The first thing we wanted [Brown] to do was to get better attach rates and better renewal rates with services. If you can build that muscle, then it's easier to build the muscle around how you do that with software and then with SaaS-based models for the future. We've been consolidating groups of people into Scott's group and built up a sizable model.

This whole concept of improving attach and renewals rates is something Cisco has been tackling for a while. Why is it so hard to get channel partners to do that?

We've done a much better job over the last year or 18 months. We've focused on the data. The data that we had and the way the data was spread across disparate systems meant it was incredibly labor-intensive to collect the data.

We've done a huge amount of work of data threading across all of the different data sources in the company. By doing that data threading, the value that we can provide to an agent – whether it's one of Cisco's agents or one of the partner's agents – has increased significantly. Through that, we're in a much better position to help our partners attach at higher rates and renew at higher rates. That's going to be really important for us and them in a more software-oriented world.

Historically, there's been challenges where the service provider channel and the partner channel had conflicts. How does that play out in the cloud era?

The service providers that we go to market with, they recognize and respect our channel program … the successful service provider partners we have know our channel programs. They'll know what we'll do and what we won't do. We've been very good in holding the line around channel programs so that we provide a competitive environment.

In terms of the major service providers, clearly their world is changing dramatically. Some of the decisions that we have taken recently where we would consider the fragmentation of our technology – so we'll provide software without the hardware – we believe we'll need to do that in a virtualized world and the service providers will always want to virtualize their services as much as they can in the future. Time will tell whether that is as successful as people believe in this moment in time.

What do you mean that 'time will tell' if those virtualized services for service providers will be successful?

The reason I say that is because as the speed of networking increases, just doing it in software is not easy. You also need to think of the silicon element of it, particularly as you want to spit out higher and higher and higher access speed.

The world is moving so fast and software alone is not the answer. Silicon will play a part as will hardware. It may be that it's elements of white-box hardware, but we need to make sure as a company that we're able to provide innovation.

We've talked to partners who have grown their Cisco security business 200 percent or more -- are those the kind of numbers your seeing from other partners?

Our proposition is, how do we help our partners build franchises that deliver growth and profitability? The services element of that marketplace is so much bigger than the product piece. For partners, they can build a very services-rich business and can build a consultancy-rich business and it gives them the opportunity to deliver cloud-based security as well as premise-based security.

Those [partners] that have really pushed heavily in that and not just try to do what the security business has done historically – which is very fragmented, trying to glue different products and solutions together – those ones that have really resonated around the portfolio have done incredibly well.

Why will Cisco win the security market this time around?

If you look back in the opportunity that we had in security the first time around – self-defending networks was what we say. Rowan [Trollope] was right. Rowan worked for Symantec at the time and he said, 'The industry was concerned. Because if we got it right it was a major issue.' This time we're going to get it right – I fundamentally believe that. It's a case of making sure you can constantly innovate and as a technology company, it's the heart and soul of your company.