Cisco's revamped partner program officially launched Monday with a system designed to push resellers into professional and managed services, cross-portfolio sales and deep specialization. Partners say the vendor's gradual rollout minimized disruption.
The program uses a points-based system to incentivize partners to expand services across the customer lifecycle beyond resale. New habits are emerging among partners as they look to maximize rebates and profits and ultimately provide a better customer experience.
Partners have added professional or managed services or both, and partner participation in Cisco technical enablement training has grown exponentially.
“I think all of the partners understand clearly what Cisco is expecting, and they've demonstrated that almost unilaterally. We continue to see that hockey stick sort of movement,” Ken Seitz, Cisco Global Senior Director of Partner Managed Services, told Channel Dive.
Cisco’s efforts to spur partner evolution are a long time in the making. Partners first got a look at their Cisco Partner Value Index in August to learn if they pre-qualified for the preferred tier. That gave the others time to catch up.
In an age when IT vendors caused mass upheaval with program revamps, Cisco made a point of being gradual and deliberate.
“We've spent the last six months with partners already seeing how they're doing in their Partner Value Index in different portfolios, getting used to the Partner Experience Platform and seeing also the metrics on how they would be measured and ultimately paid on in the new incentives,” Elisabeth De Dobbeleer, SVP, Cisco Partner Program, told Channel Dive.
Omdia Senior Research Director Rachel Brindley said partner feedback to the program has trended positive. Cisco’s preparatory efforts were a best case scenario, said Brian Ortbals, SVP of Global Solutions and Architecture at WWT. The value-added reseller and system integrator has been adjusting to the program for the better part of 18 months and has been giving Cisco pointers along the way.
“In many cases we get handed a new program, and then there's the collateral damage and feedback after the fact,” Ortbals said. “I sit on a lot of partner advisory boards where it's like, 'What were you thinking? Why didn't you call us and ask us before you did this?'
Cisco’s program revamp is one of the most significant in the last decade, and it’s one other vendors are watching closely, said Steven Heinsius, VP, Product Management and Marketing EMEA for Comstor at Westcon-Comstor.
“As so often before, Cisco is leading. They were the first to introduce subscription models for products that were historically perpetual, and many competitors openly questioned that decision. Yet today, the entire market has followed,” Heinsius told Channel Dive in an email.
What changed on Monday
Cisco’s De Dobbeleer said the biggest change partners will notice is operational.
Quoting and ordering will feel different as Cisco’s programmatic discounting for its new two-tier setup goes into effect, but those rebates and discounts were visible to partners since August, she said.
Nevertheless, moving from three tiers to two tiers was a psychological adjustment for WWT’s Ortbals and his team.
“You just kind of felt like it would always be there, so now it's a new world,” said Ortbals, whose company has been a Cisco gold partner since 2002. “I think it's an adjustment for customers recognizing that when they release an RFP, they're not seeking Cisco gold partners anymore.”
In addition, Cisco will start a quarterly rebate payment cadence in June. Cisco had previously paid partners twice a year, except for quarterly service-related rebates.
“From a cash flow perspective, that's quite attractive to the partners. And for us, it's consistent, and it's one example of simplification, because it's the result of collapsing multiple incentives into one framework,” De Dobbeleer said.
Quarterly payments improve WWT’s financial forecasting and budgeting.
“Payment gets more closely tied to when the business happens, as opposed to not seeing a check until October if you happen to do a deal tomorrow,” Ortbals said.
Key evolutions
Cisco partners are evolving in their technology portfolios and their services.
The program rewards partners for adding project-based professional services, managed services or both. Doing both is great, and the largest partners will likely do so, Cisco’s Seitz said. But it’s important to do at least one.
“What's critical for us is that you're not just selling something and walking away from it,” he said.
A separate Partner Value Index is coming for distributors, who typically do not directly deal with the end user. Despite their distance from the customer, distis are tackling ways to get into services. Seitz said some are focused on training partners to develop a services practice, and others are spinning up service practices that partners can white-label as their own.
Comstor does both.
“We help partners become managed service providers themselves, or they can leverage our white‑label Managed SOC, built and certified on Cisco XDR,” Heinsius said.
De Dobbeleer said distributors have probably been the most enthusiastic of all partners toward Cisco 360.
“They see it as a way to drive stickiness with their own resellers,” she said.
