Cisco Exec: Solution Specializations, New Incentives Will Align Partners With ‘Subscription Economy’

‘We are going to remove the subtlety at this Partner Summit and let our partners know that within the next 12 months, there will be a very clear roadmap of how we will phase out the Architectural Specializations and move to the new, brave world of solutions specializations,’ Marc Surplus, VP of strategy planning and programs for Cisco’s Global Partner Organization, tells CRN.

Cisco Systems — armed with new, lighter-weight specializations and the biggest change to its partner incentives portfolio in 20 years —is signaling to the market that it’s ready to align solution providers and Cisco to the subscription economy, Marc Surplus, vice president of strategy planning and programs for Cisco’s Global Partner Organization, told CRN.

“Across all aspects of the partner program, we feel like we are really kind of hitting our stride and continuing to accelerate and drive growth for our partners,” Surplus said. “We are going to remove the subtlety at this Partner Summit and let our partners know that within the next 12 months, there will be a very clear roadmap of how we will phase out the Architectural Specializations and move to the new, brave world of solutions specializations.”

The tech giant last year introduced a pack of new specializations that would better match customers’ changing buying behaviors with partners’ ability to deliver full-fledged solutions at less of a cost for partners battling a backlog of business. Now, Cisco is continuing to build out the Solution Specializations portfolio with the introduction of five new Solution Specializations.

San Jose, Calif.-based Cisco has also recently revamped its now-live SMB Specialization, which focuses on Cisco’s latest technology for SMB, including Secure SMB, Hybrid SMB, Smart SMB and Remote SMB for partners looking to drive new recurring revenue in what Cisco said is a “rapidly growing” market.

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The five new Solution Specializations include: Secure Networking, Zero Trust, Network Security, and two new IOT specializations; one for industrial and one for non-industrial use cases. The two IoT specializations will be available in February to partners. The three networking and security-related specializations will be available in the second half of Cisco’s fiscal 2024.

The new Solution Specializations join the handful that were unveiled last year: Hybrid Cloud Computing, Hybrid Cloud Networking and hybrid cloud management software, as well as Full-Stack Observability (FSO), Secure Access Service Edge (SASE), Hybrid Work from Office and Extended Detection and Response (XDR).

Right now, the Solution Specializations are part of three other categories of Cisco partner specializations, including the Architecture specializations, Cisco Powered Service specializations and Business specializations. Cisco, however, has said that it will be retiring the Architecture Specializations as it pivots away from single-architecture specializations.

Cisco has already begun the process with its Data Center Architectures, which will retire in July 2024.

Solutions Specializations, said Surplus, are multi-architectural specializations that align to Cisco’s customer priorities and reflect solutions that partners are already selling today.

“We’ve been hinting at this as an evolution that would happen. Now we’re going to commit firmly to it,” Surplus said.

The Solution Specializations will continue to count towards partners’ Integrator status at the Gold, Premier and Select levels.

“Every investment [partners] have made are still foundational in a cross-architectural world and we’re going to protect those investments. But the new Solutions Specializations give us a lot more flexibility and a lot quicker time to market to get partners to stand up and lead with Cisco’s latest innovation,” he said.

Lifecycle Incentives

Cisco’s partner team unveiled at Partner Summit 2023 what Surplus called “the biggest change” to the company’s incentives portfolio in 20 years.

The new Cisco Partner Incentive will combine VIP, Lifecycle Incentives and Cisco Services Partner Program (CSPP) into a single integrated incentive. The new incentive will reward all aspects of go-to-market, increase predictable growth, and improve the partner experience, especially as Cisco shifts to an as-a-service, software and recurring revenue-first first company, Surplus said.

“We wanted to reward partners across the full lifecycle. So, when they monetize and drive the sale, we want to pay them a rebate. When they increase software used and consumed through their adoption, we want to pay them rebates through lifecycle incentives. And then increasingly, we want to reward partners just for not only attaching services, but for driving Success Tracks. All of those things are contained in purpose-built incentives that have served us very well for the past number of years. I think though, as we transition … What we wanted to do was take the best elements of those three incentives and combine them into a single integrated incentive that rewards partners,” he said. “The new Cisco Partner Incentive does all of those things.”

Also revealed this year was an update to its Lifecycle Incentives (LCI) program, or LCI 2.0. The program, which rewards partners for activities leading to better software and subscription adoption, has existed for seven years. LCI 2.0. is about the standardization of all of the company’s software on one consistent lifecycle process for partners, Surplus said.

“We’re making some pretty big changes to our incentives to better align our partners in Cisco as we both transition to the subscription economy and really capturing full value across the lifecycle,” Surplus said.

LCI 2.0 is now live with offers in data center, collaboration and security, more rolling out over the next several quarters in which partners can earn 3x the rebated that existed in LCI 1.0, he said. Cisco is also adding new bonuses when partners onboard the customer to software, in keeping with the company’s push away from hardware in favor of software and services.