Miami — Cisco Systems (NASDAQ: CSCO) is about to offer the Canadian channel five to 10 per cent of extra margin on its routing and switching products in an attempt to help solution providers through the down turn in the economy.
Announced at its second annual Velocity Marketing Conference, held here, Cisco’s new Navigate to Accelerate program aims channel partners towards helping clients update their core networking infrastructure. This program is currently available in the U.S. and is being assessed for Canada, and the company’s intent is to roll it out this year.
According to Edison Peres, senior vice-president, worldwide channels and go-to-market group for Cisco, the program is intended to help solution providers during the down turn in the economy.
“The economy has contracted, but now is the time to try to update the core networking base of existing customers, even though it may not be as profitable than advanced technologies,” he said.
Peres said that currently there is US$40 billion worth of Cisco equipment that is at least four years old, which can lead to security and efficiency issues with customers. About half of that US$40 billion rests in North America.
An important aspect of the Navigate to Accelerate program is the network assessment plan. Cisco is encouraging channel partners to go their installed base and do a network assessment. Cisco is willing to fund part of the network assessment for the solution provider. Peres said Cisco is looking at helping the channel do 3,000 network assessment in North America in 2009. In the past, channel partners that have done network assessments have managed to grow revenues to the tune of 126 per cent, year-over-year.
“About 38 per cent of the time, when a partner does a network assessment it leads to a sale in a three month time period. And 67 per cent of the time it will lead to a sale in 12 months,” Peres said.
The backend rebate increases are in the Core Accelerator Program area of the Navigate to Accelerate plan. This margin incentive will work alongside Cisco’s Opportunity Incentive Program (OIP), which was released in 2004. It will pay a partner five per cent on routing equipment and 10 per cent on switching equipment.
Glenn Mowat, president of Unis Lumin, an Oakville, Ont.-based Cisco gold partner, said the Navigate to Accelerate program will help in terms of the psyche of the channel.
“Instead of waiting for things to happen it will help us get things going in this economy,” he said.
Mowat added he’ll be encouraging his employees to learn more about the Navigate to Accelerate program because it provides a clear path towards the opportunity that lies in the existing customer base.
Steven Burns, president of Bulletproof Solutions, a Fredericton, N.B.-based Cisco Premier partner, said that Navigate to Accelerate finance area is key of his business and the customers his company serves.
“It will be huge leading into next year. It will help us to better look after the customer now, but there is also a plan for the future. We need to get ready for that now,” he said.
Navigate to Accelerate has a future outlook and through Cisco’s Partner Practice Builders, the company believes channel partners can enable themselves to be ready for the SMB and unified communications opportunities when the upswing comes.
Peres said that when the upturn comes it will first happen in the SMB, especially for Canada and the U.S. market.
There are currently 10 partner practice builder models, which security and other advanced technology practices coming on board soon. More than 2,300 channel partners have gone through these builders.
