Cisco Execs Outline New Partner Incentives

On Tuesday, a lineup of Cisco executives celebrated their partner accomplishments over the past year and unveiled some new incentives designed to enable resellers to realize new profitability opportunities.

The presentations took place at Cisco's Partner Summit 2005, held in Vancouver, British Columbia, a location that presented its own unique set of hurdles. The Vancouver Convention and Exhibition Center is situated both on the water and next to a rail yard, and its main presentation hall is a cement-floored echo chamber. So the presenters were forced to deal with rafts of not-so-white noise, including buzzing sea planes, arriving and departing trains and even the rattling of bottles as the food service staff set up for lunch one curtained-off room over.

They made do. Cisco senior vice president of worldwide channels Paul Mountford lauded the attendees for their performance during the past year, noting that its VIP partners had increased 73 percent year-over-year, allowing the company to issue 140 percent more monetary rewards than it did in 2003.

He said there's more room to grow for partners, noting that there currently is about $40 billion worth of networking and security units that are, or soon will be, ready for upgrades or replacement. "You partners own a lot of that base," Mountford says.

He says next week the company will launch a Trade-In Accelerator Promotion that will enable partners to get a rebate worth 15 percent of a device's trade-in value when they upgrade a customer. The company also is enhancing its credit programs, earmarking $250 million for "credit-worthy partners who are growing rapidly in emerging markets," Mountford says. Another $500 million will be set aside for new 30-to-90-day inventory financing programs.(In separate announcements on Monday, Cisco said it is changing its Learning Credits program to enable customers to prepay for training at the same time they purchase Cisco products and services, and it also is adding a Solutions Incentive Program (SIP) that supports collaboration between networking partners and application developers to provide greater customer value. SIP requires partners to prequalify, which then enables them to register opportunities and receive incremental benefits and compensation for closing solution-based deals.)

Karl Meulema, the company's vice president of services, marketing and channels/customer advocacy, says the rise of services--as exemplified by Cisco's acquisition of NetSolv last year--is another way for the channel to realize profits.

"The NetSolv acquisition gives us a base of tools for partners to build services around," he says. "Or they can sell the NetSolv services themselves, or take their own tools and deliver services off them."

Meulema says the company will help partners with demand-creation programs for the new services. "Support services will be an $800 million opportunity over the next four years," he says. "Demand creation and renewal around our uncovered base will be crucial for us in the coming months." This will include an increase in support for SMB clients with fewer than 250 employees. "This should give us access to customers that until now weren't buying," Meulema says.

CTO Charlie Giancarlo concluded the morning session by outlining the company's vision for real-time computing. Much of his presentation included elements that most of the audience has heard before, but he did highlight some upcoming technologies--such as intelligent process switches and intelligent SAN switches--that should provide partners and customers alike with advanced real-time capabilities."These aren't just specialized applications you can plug in and make work; it's about managing business processes," Giancarlo says. "It's virtualizing them so they work the same way, regardless of they're being accessed, which is really exciting."