Cisco and the channel
The entire Cisco channel ecosystem is changing. There are apt to be plenty of bumps along the route to that transition, but there’s no turning back.
Over the Cisco channel for the Americas is a $20 billion organization. The Americas channel encompasses about 100,000 individuals.
Cisco reports that 2,700 partners have now sold a Cisco One license to 14,000 customers. The goal is to encourage customers to update their Cisco network and data center investments at the expense of Cisco rivals. Cisco officials said $10 billion in revenues is now attached to Cisco One licensing programs.
Cisco Digital Network Architecture (DNA) is in the process of making it possible to run large swaths of its software portfolio in the cloud or non-Cisco hardware. As part of that effort, Cisco now has more than 200 Virtual Network Function (VNF) modules available. Cisco said it now has 14,000 DNA customers, representing $49 billion in revenue.
For three years, Cisco has been pouring 25% of its U.S. channel resources into a Partner Organization tasked with aligning partners with independent software vendors (ISVs) and consulting firms. Open APIs are at the core of that effort.
Cisco claims to have generated 44,000 leads relying on digital marketing techniques. A full 57% of those leads have been converted into sales opportunities. Overall, Cisco officials said there has been a 23% increase in actual orders in the last eight months. In the future, Cisco plans to apply analytics to better identify the size of the opportunity, the share of wallet Cisco has, and the propensity a customer may have to purchase Cisco products and services.
IT security is easily the most profitable segment of the Cisco product portfolio for solution providers. Those security products also often drive network upgrades.
A new dedicated data center business unit led by Roland Acra now combines server and switches together in a way that should make it easier for partners to sell blended solutions.
A new Cisco Spark Flex licensing plan makes it simpler for organizations to acquire end-user licenses that can be applied to both the Cisco Spark collaboration services in the cloud, instances of WebEx delivered as a service or hosted by the customer, and on-premise unified communications and telephony technologies. Cisco claims to have 100 million phone endpoints currently installed.
Cisco built its business on routers. But those routers are now being replaced increasingly by software-defined wide-area networks (SD-WANs). Cisco has its own SD-WAN that it is now turning into a platform for applications such as video cameras.
After forming an alliance with Apple that integrated Apple iOS devices with Cisco wireless access points, Cisco wants partners to sell that solution.
Cisco has both a Volume Incentive Program (VIP) that rewards partners for sales volume as well as a Technology Incentive Program (TIP) that rewards partners for investing in specific product technologies by providing additional back-end rebates and discounts.
While most of Cisco’s revenues are generated as a capital expense, there is a steady shift toward multiple types of leasing programs that allow organizations to acquire IT infrastructure running on-premise as an operating expense that is similar to a cloud service.
Cisco is attempting to drive upgrades across its installed base via a Lifecycle Advisory Program that identifies opportunities to drive upgrades.
By employing microservices, containers, machine learning algorithms and artificial intelligence, Cisco aims to automate almost every aspect of IT infrastructure management inside and outside the cloud.