Resellers of Cisco Systems gear may face upheaval after the vendor introduced a new partner technical support services program.
“”It’s a more predictable model”” for partner revenue, said Karl Meulema, vice-president of customer advocacy for Cisco’s channel sales and marketing division.
However,
he added, it also means resellers may have to chose between investing and specializing in providing support services to customers, or leaving that to Cisco and concentrating on designing and installing its network equipment.
The new portfolio replaces the Cisco SIS98 service program, which Meulema said was good enough when networks were simple and growing fast. Now, however, they’re more complex.
More importantly, resellers had to pay a services fee to Cisco on every product sold whether the VAR provided technical support or not. Many didn’t and passed the cost on to the customer, who felt ripped off. If the customer didn’t want to buy support, the reseller had to absorb the service fee and felt ripped off.
In addition, Cisco forced resellers to carry parts, meaning they had to invest in warehousing and infrastructure.
“”There was a big need to change the way we offered our services to partners,”” said Meulema.
The new support program comes in two offerings:
— Cisco Shared Support is aimed at partners willing to offer services sales, contract administration and upgrades support as well as run a three-tier Technical Assistance Centre.
While they will deliver the first two tiers of assistance, the partners will have access to Cisco for Tier III support advice, which will be forwarded to the customer.
The Shared Support program is open to partners offering 24-hour live technical support, have an electronic case management and ordering infrastructure and an automated asset management system.
– Cisco Branded Resale is for partners who would rather concentrate on network implementation and only supply Tier I and II support to customers. They will resell Tier III support, which will be provided by Cisco direct to the customer.
There will also be performance metrics to be met, Meulema added, which will earn partners discount pricing on service contracts.
Partners offering either program have to meet customer satisfaction levels for discounts. In addition, those offering Branded Resale will be rewarded for service delivery (the less support they hand off to Cisco, the greater the discount) and their ability to renew service contracts.
In short, the more support work partners take off Cisco’s hands the more money they’ll make.
“”Partners who replace every product and refer every call to us are very expensive to Cisco,”” explained Meulema. “”They don’t provide a lot of value to us or to the customer.””
One of the goals, he said, is to help partners see a stable source of income through the selling of services.
Resellers for whom support is a core product will be able to differentiate themselves from other Cisco VARs because they’ll have better pricing, and will be more profitable, Meulema added.
Customers will be able to choose from two service offerings when their current support agreement expires, said Meulema. Some resellers will be able to offer both.
It’s expected that customers with multi-vendor networks will probably want to deal with one reseller and will likely chose the Cisco Shared Support program, he said.
For its part, Cisco will take over the parts distribution business and take back their inventory, allowing them to devote more resources to technical support.