Cisco is revamping its approach to enabling partner services revenue with the launch Tuesday of Cisco Services Partner program at the 2012 Cisco Partner Summit in San Diego.
The rollout follows a pilot with 2,500 partners across the United States and Canada. More than 4,000 partners currently are participating in the United States, Canada, Asia Pacific and Israel. It will roll out to other regions over the next 12-18 months, beginning in May 2012. Significantly, the overhaul consolidates 47 programs into a single, global program.
Nick Earle, senior vice president of worldwide services for Cisco, explains that “smart” services are software-based, discover the customer’s network, analyses the information and correlates with other Cisco information and turns it into an actionable insight.
The new program offers three options for partners to offer Cisco’s smart services, including two existing models: one, reselling Cisco-branded services and, two, buying smart components and packaging them under their own brand. The third option, Partner Support Service, is new and allows partners to buy he buying the smart components and using API access to embed their software around the Cisco smart services and then to use “smart bonding” (seamless online access to Cisco) to support the customer and, ultimately, deliver their own smart services.
In each of these cases compensation is aligned with partner investment/engagement in the services business.
In the initial U.S./Canada pilot partners experienced 15 percent increase in the portion of their bookings eligible for rebates and a three-fold increase in the number of partners earning rebates compared to the previous program.
“Smart services and the Cisco Partner Services Program really drive the next generation of your value to your customers and your economic model,” Earle said, noting that partners selling it are growing both their top line due to new services and bottom line due to automation/lower cost.
The new program aligns with the new “Return on Cisco” approach that is designed to drive greater valuations for Cisco’s partners. Earle said services, more than anything else, can do that. He claimed services now account for up to 50 percent of the average Cisco channel partners’ business, up from 20 percent five years ago. Moreover, he added, services are 70 percent of profitability, compared to 40 percent five years ago.
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