Cisco Partner Growth, Channel Route To Market Has 'Never Been This High'

‘We are at all-time highs with partner penetration. The partner route to market is at more than 85 percent and it's never been this high in its history,’ according to Cisco's Nirav Sheth.

Partners are the primary way in which Cisco goes to market and despite being in the midst of great change, the company's commitment to the channel is unwavering, Cisco executives stressed to partners last week at the 2019 Cisco Partner Summit.

"We are at all-time highs with partner penetration. The partner route to market is at more than 85 percent and it's never been this high in its history," Nirav Sheth, vice president of worldwide sales and systems engineering for Cisco's Global Partner Organization. "It's important to call this out because we've been able to do this at a time when the portfolio is rapidly evolving … We're so excited and so enthusiastic about everything we are looking to do with partners."

Cisco CEO Chuck Robbins told CRN that the company's impressive partner growth and high channel penetration is being driven by Cisco's strategy of working alongside its partners as it continues to evolve into a software and subscriptions-focused firm.

"We have remained committed to doing business through our partners and our partners are bringing such value to our customers, particularly as we make this transition to software, helping our customers adopt and gain value out of the software assets they are buying," Robbins said.

[Related: Cisco Collaboration Now Includes Hardware As A Service, Tighter Integration With Microsoft Teams]

Long View Systems, a Cisco Gold partner specializing in managed IT and cloud services, has had its best year with Cisco overall and currently has the highest headcount it’s ever had. As Cisco transitions to a software-first company, the door has been opened for partners to wrap their own services around the software offerings to build a more predictable and profitable revenue stream, said Kent MacDonald, senior vice president of strategic alliances for Long View Systems.

"The attention being paid to recurring revenue, which is mostly being driven by software today, is paying dividends to both Cisco and its partners,” MacDonald said.

Selling software and subscription-based services doesn't come naturally to every partner, but Cisco today is arming its channel with tools and resources today that are laying the groundwork for partners to build on, Cisco partners said.

Cisco last week introduced Solution Starter and Upgrade Starter, two new customer entitlements in which Cisco funds relationships between the end customer and a channel partner up to $7,500 so that the two can work together on a plan for success.

"It was a little challenging previously without having that jump-start funding to prove the business impact and value of the software," MacDonald said.

To further encourage channel growth in a software and subscriptions-focused world, Cisco has had to change how it rewards partners. Cisco global channel chief Oliver Tuszik said that over the past few years, the company has shifted a big chunk of its incentives to favor software and recurring revenue deals.

"If you sell an EA [enterprise agreement] you make $8,000. If you run it through the entire lifecycle, drive adoption and use cases and bring value to the customer, you can get in the area of $50,000," Tuszik said. "We started selling a router through a subscription, and now we have everything from cloud solutions, down to collaboration video systems."

Cisco announced several changes to its partnering process at its Partner Summit, including cutting down the time it takes to do an EA proposal and slashing the number of partner portals that solution providers are using to do business with Cisco. So far, Cisco has been able to decrease EA proposals from one week to less than a day. The company has reduced the number of portals by 24 percent and Cisco will continue to whittle that number down, Tuszik said.

The time reduction in EA proposals is "long overdue," according to Jason Parry, vice president of client solutions for Force 3, a Cisco Gold Partner and one of the tech giant's top Federal partners.

"I think Cisco has to still figure out how to have partners more actively involved in quoting and billing EAs," Parry said. "Anything they can do to streamline that process, we are all for."

Tuszik also revealed that Cisco now has a team of 500 people globally that are dedicated to customer renewals.

Crofton, Md.-based Force 3 has seen the fruits of Cisco's labor in terms of renewals. "The process is more simplistic, and we have better visibility into it, which was historically a challenge at times," Parry said. "It's a statement to where Cisco is moving its business."

Cisco's Robbins said that as the company moves toward software, partners want to make sure Cisco continues to move at a pace that allows them to transition their own business model.

The San Jose, Calif.-based tech giant's message to partners has consistently been to trust them as they make the software transition, said Davis Worth, CTO for Computex Technology Solutions, a Cisco Gold Quad Master-level partner that is selling to a variety of customers and takes part in many of Cisco's incentive programs today.

"What other companies often do with selling subscriptions is they often cut partners out three years in for a renewal," Worth said. "Others in the industry with a similar look and feel to Cisco really didn't take care of their partners, but Cisco really gets it."