Cisco Looks to Boost Profits for Resellers Serving Small Business

By Jessica Davis  |  Print this article Print

Cisco's new Partner Development Funds payouts will go to registered partners for the first time ever, and will be paid to small business partners on a quarterly basis. Cisco has also announced an updated Smart Business Communications System, a new unified threat management (UTM) device, and an easier way for partners to access Cisco account information.

Looking to improve its relationships with channel partners that serve the small business market, Cisco this week has announced a new partner profitability framework that enhances several financial benefits to better serve the needs of smaller channel partners, plus a new unified threat management device and an improved entry-level unified communications system.

The moves come as many IT vendors look to woo more small businesses, which are considered to be the fastest-growing segment of the IT market.

Cisco’s new small business partner benefits include Partner Development Funds (PDF) payouts on a quarterly basis, new rebates and zero-percent financing for partners and end-customers, Andrew Sage, vice president of worldwide sales for small business at Cisco, tells Channel Insider.

The networking giant’s products and services have typically catered to large businesses and enterprises, often served by direct sales or the very largest partners.

"We want to make sure we’ve got a profitability platform for all types of partners," says Sage. Responding to small business partner feedback, Sage says Cisco made sure the Partner Development Funds program paid out on a quarterly basis rather than a biannual basis in order to help partners with cash flow, particularly to ease the struggles so many may be having during the current economic downturn.

To participate in PDF, partners must enroll by Sept. 19 (this Saturday), and are eligible for credit on all sales starting at the beginning of August, says Sage. The funds track to the different partner types selling into the small business market, including Cisco Registered Partners, Cisco Specialized Partners, online resale partners and service providers. Payouts are based on purchases of Cisco Small Business products.

The program marks the first time Cisco is offering a rebate program for its 50,000 registered partners for selling Cisco, says Sage. The program provides 5 percent rebates on all sales of Cisco products.

A rebate program for partners with high-volume businesses—typically online resellers, service providers and direct market resellers—provides rebates of up to 5 percent.

Then specialized partners are eligible for a set of rebates from 5 percent to 10 percent. Partners who receive those rebates are those who have invested in select certification and have done training to become certified as Cisco small business specialists. Sage says these partners get the highest levels of rebates for selling solutions such as voice.

Cisco says that it is also providing new partner registration and program intelligence tools that will let partners track sales progress on a daily basis and calculate payments across multiple Cisco programs from a single location.

"Ease of use is a massive driver of the success of these programs," says Sage. "This makes it simple for partners to log onto the Website and look at the status of their payments."

Cisco also announced a new unified threat management device, the Cisco SA500, priced at $550 and with a contract cost of $69 for three years. Sage says it provides all the functionality standard with UTM devices and offers simple deployment to help small businesses protect offices, remote employees, and business and customer data.

Cisco also announced a new series of Internet telephony phones and handsets ranging from $135 to $435. The HD audio-enabled devices are priced for small businesses to take advantage of better quality sound, says Sage.

And Cisco announced an update to its Smart Business Communications System (SBCS). Release 1.6 offers support for new hardware and usability enhancements, plus some vertical applications for the health care industry.

The new version also offers a setup wizard to help partners with installation. That wizard also helps them maintain and troubleshoot the system, says Sage.  

Sage says the price point is now more attractive, too.

"We are more aggressively pricing the UC 500 base unit," says Sage, who adds that the price of an SBCS solution has come down about 25 percent from six months ago.

New service contracts are also available for partners to resell to customers.

Plus, Cisco is extending its zero-percent 36-month financing to Dec. 31.

"You take the price of the equipment and divide that by 36," says Sage. That’s the monthly payment.

Jessica Davis covers the channel for eWeek and Channel Insider. Her technology journalism career began well before anyone heard of the World Wide Web and has included stints at Infoworld, Electronic News/EDN, and the Philadelphia Business Journal. Her work has also appeared on CNN and Forbes.com. She has covered hardware, software and networking, as well as the business side of technology. She has won several journalism awards, including a national ASBPE award for best staff-written column, and was named Marketing Computers hardest working tech journalist on their inaugural list of top tech journalists. Jessica can be reached at jessica.davis@ziffdavisenterprise.com

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