Cisco Partner Summit, Nov 4-7, Las Vegas, was a whirlwind of interlocking, interdependent, important set of announcements to guide and assist channel partners to transform, own their competitive edge and target an elusive yet huge small and midmarket opportunity. The genesis of a transformed partner is the idea of relentless focus on Customer Lifecycle and begins with rebranding to Cisco Customer Experience (CX) Success Portfolio. Oliver Tuszik, Senior VP, Global Partner Organization is committed to developing a partner program that delivers customer success. Under the leadership of Maria Martinez, Cisco has thought through the channel enablement levers – customer content and assets, digital tools, co-marketing, co-selling and incentives at each “mile-marker” along the entire “race-track” aka, customer life-cycle.
Naturally, Cisco is expecting and forecasting many upsides for its channel partners including and not limited to 15% increase in revenue because of bigger deals and new deals, 20% increase in professional services that are fixed-price / right-sized deals and 5%-10% increase in HW pull-through. Partners who embrace the CX Lifecycle can hope to double their business in 3-5 years.
It is a very ambitious initiative. Out of the 60,000 Cisco partners, a majority may not have the skills and staffing to follow-through and pull it off. Cisco is not naïve. To some extent Cisco is relying on its distributors for enablement of the tier 2 partners. It is no doubt a touch ask and the onus will lie on the partners to make themselves heard, align and participate. But distributors can play an important role in driving tier 2 partners to develop CX practices. To make that a reality, Cisco is making investments in the foundation for partner lifecycle services. Cisco has developed a framework, or model, and is providing tools and resources to help partners monetize customer success and how to organize and operate their businesses for sustained success.
Cisco launched CX Certification and Specialization to help partners develop the talent needed to support customer success and to help them differentiate their business. Cisco is providing role-based training so that partners can ingrain customer success in their organization and deliver lifecycle services at every step of the customer journey.
Cisco is a partner-driven organization. Revenue through partners was 85% in 2019 as compared to only 38% in 1996. It is a major shift with a steady 6% average CAGR over the last 13 years.
Recap of announcements
Here is my recap of the announcements that I have grouped into five areas.
1. Customer success is #1 target
2. Partners remain default GTM for the entire lifecycle
3. Align Cisco internal teams
4. Want and support all partners
Requires increase SW content in portfolio, cultures and teams’ alignment, design programs to increase profitability.
1. Platform-Enabled (Programmability + DevNet)
2. New Buying Centers (Segmentation & Sales Plays)
3. Customer Success (Lifecycle & Recurring Revenue)
4. Multi-domain architecture
Reimagine customer applications, secure data, transform their infrastructure, empower teams
1. 2T growth engine -Distis to spend time, energy on tier 2 partners
2. SMB execution – scale, touch small and midsized firms
3. Simplification & scale to drive operational excellence
4. CX lifecycle - contribute to renewal strategy
Disti business ranges from 30% - 40%; 2/3rd of $20B is from VAR, Tier 2
1. Lifecycle Advantage
2. Joint engagements & digital renewals
3. Collaborative intelligence
4. Refreshed re-branded portfolio
Invest US$50m in assets and programs in last 1 year. Expectation is that partners can make up to $50K incentives on customer lifecycle
1. Marketing Velocity Program
2. Partner marketing velocity central
3. Marketing Velocity Activate
4. Portfolio Explorer
10,000 partners are using marketing velocity central and virtual demand center - moving away from leads to qualified leads
One of the big announcements of the week was a renewed focus on the SMB segment with purpose-built products supported by marketing programs.
Techaisle’s latest research forecast shows that in 2021:
- WW SMB IT spend will be US$738 B (excluding telecom services)
- WW SMB Cloud spend will be US$156 B (excluding telecom services)
- WW SMB Managed Services spend will be US$65 B (excluding telecom services)
It is too huge an opportunity for Cisco to not be a major player. Cisco therefore announced two key initiatives:
- Cisco Designed for Business: purpose-built and curated products for small businesses. For example, Meraki Go (zero touch deployment for indoor and outdoor WiFi access points, security gateway & switch), Catalyst 1000 series switch. Cisco’s collaboration solutions WebEx and newly announced WebEx Desk Pro built for all businesses of any size is suitable for small businesses also. I am delighted that Cisco has formalized and is operationalizing its stake in the market. Cisco Deigned for Business is not only a concerted effort to appeal to the small business segment but also an announcement to its smaller resellers and distributors its seriousness in addressing the needs of small businesses by offering purpose-built product solutions. However, I caution Cisco not to be completely swept away in its “race track” customer lifecycle journey with respect to small businesses. Cisco will derive better benefits by connecting its Designed for Business with SMB business outcomes.
- Ignite the Midmarket: with upfront margin and good discounts, bonus for sales growth, simplified deal registration, deal protection, sales playbooks that provide value propositions, multi domain reference architectures, CX customer journeys and integrated industry use cases with step by step process
- Cisco has the right strategy to enable, empower and transform its channel partners
- Cisco’s focus on customer lifecycle along with its partners can accelerate their customer’s path to success at every stage of the lifecycle to deliver their business outcomes faster
- Small businesses, specifically midsized firms are the battleground for the next decade and Cisco has announced its intent at the right time supported by an effective plan and program
- Two problem areas have been overlooked – time and resource allocation by Cisco partners and vendor partnerships as compared to overall channel partner community