Cisco's Smart Care Networking Managed Services Defies Recession

By Jessica Davis  |  Print this article Print

Cisco's Smart Care growth is spiking, say partners and Cisco executives, three years after the networking managed service was first introduced. Now with 1,200 end customers, Cisco is looking to build out further.

Got customers who run call centers? It’s an environment where networking becomes mission critical, and when the network is down so is the business.

While plenty of managed services platforms provide the kind of proactive monitoring to reduce server downtime, it can be a real specialty to provide the same kind of proactive monitoring for networking devices at a company where networking is mission critical.

Offering that kind of service through channel partners was the idea behind Cisco’s Smart Care service, introduced three years ago as a way for small and midsize Cisco channel partners to gain an entry point into the managed services business.

And it's a message that customers seemed attuned to these days. Cisco's Smart Care service bookings have grown by 197 percent from February 2009 to February 2010. Contracts signed have grown by 93 percent over the same period.

Smart Care lets partners take the services, wrap their own additional offerings around them and resell the whole package to end customers, setting their own prices. The main downside is that the offering only works with Cisco equipment. But for Cisco partners, the service can offer the opportunity to create a real value-added offering.

That’s just what Converge Technology Group did three years ago when it first signed on as a beta channel partner to the Cisco Smart Care program. CTG had already been providing networking managed services to its customers at the time, cobbled together on its own, CTO Steve Drgon told Channel Insider.  The firm sold such services to customers with 250 to 2,500 seats and several locations across the United States.

Cisco knew about CTG’s own offering and invited the company to become part of the beta.

"Adding Smart Care allowed us to provide a much higher level of support service to clients while maintaining or reducing their costs," said Drgon, something that served the company well as the world entered an era of recession. "A lot of clients have been in lockdown mode in terms of saving costs."

By replacing some of what it offered with Cisco’s Smart Care, CTG was able to reduce its own costs of providing the service while still maintaining its own branding and wrapping additional services around the offering. Clients were pleased with having a single number to call for any type of system outage, configuration assistance, and any moves and changes.

And the system also provided proactive monitoring for issues such as security vulnerabilities.

"In unified computing we are looking at about 150 different variables that could be predictors to failure. Based on that combination, we are able to help predict failures and avoid them. It lets us take a more proactive approach," Drgon said.

CTG has seen over a 100 percent growth rate for its CTG Care private label networking managed services program between 2008 and 2009 and is expecting a 100 percent growth rate from 2009 and 2010 as well.

"Our clients in this area needed more support last year but didn’t have the money to spend on it," said Drgon.

"We have some of the highest level of certifications with Cisco, but Cisco’s services were typically only available to large systems integrators," he said. "Offering us the ability to use Smart Care to pass that level of service along to our clients has made a big difference to us."

Xceptional Networks wasn’t an early adopter of Cisco Smart Care, but CEO Chris McKewon set a mandate a year and a half ago that the company, which caters to commercial and hospitality customers, would focus more on recurring revenue and managed services to even out its spiky revenue flow.

"Being a project business your revenue comes and goes," he said. "We were looking for avenues to smooth that out and have more dependable, predictable revenue streams."

Xceptional has performed network assessments for about 30 or 40 of its customers, and about 10 so far have signed on for Smart Care. Other customers have stuck with SmartNet, Cisco’s hardware maintenance. But interest is growing.

"In general, customers are much more interested today in managed services than they were two or three years ago," McKewon said.  It allows them to spread their costs out rather then spend their budget all at once.

Cisco’s Smart Care program puts a Cisco-owned appliance on the customer site to provide the assessment, discovery, security, management and monitoring services. The device sends that information back to a Cisco-hosted back end that the partner then monitors via a Web interface, according to Jim McDonnell, director of technical support for Cisco Services.

McDonnell told Channel Insider that Cisco counts about 1,200 end customers of the Smart Care program and about 150 active channel partners offering the service. The company is looking to expand to partners who are both a little smaller and a little larger than the typical partner who is offering the service today.

McDonnell said the program has seen a spike in uptake over the past few quarters as Cisco has worked harder to spread the word. Partner growth has spiked by 74 percent in Cisco's first half of fiscal 2010.

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