Cisco overhauls incentive program

Cisco’s three-year old Value Incentive Program (VIP) is getting an overhaul.

Called VIP6, the updated program will place a heavy emphasis on partners to build or further their security practices.

The Santa Clara,-based

networking giant wants to ensure that every partner provides core security solutions with every network sale. The company’s goal with VIP6 —— called six because the program pays out rebates after a six-month period and this version will be the sixth in its lifetime — is to motivate partners to start selling advanced security solutions.

Edison Peres, Cisco’s vice-president of advanced and core technologies for worldwide channels, admitted partners today do not have the capability to speak knowledgably on advanced security products. Peres believes this is an industry wide concern. The opportunity in the market

place, he added, is that end users are not looking at security as an option, but an expectation.

“It should be a core aspect of what they offer and we want to motivate the partners with VIP6,” he said.

With that Cisco has simplified its qualification requirements to just three things. Partners must: maintain a VPN/security specialization or VPN/security services specialization; have minimum bookings of $100,000 in Canada; and receive a customer satisfaction score of no less than 4.17.

As for the rebates, Cisco will pay out on core security products seven per cent margins on product shipments just for meeting the program criteria. However, if the partner moves into advanced security it gets bumped up to 14 per cent, and they will receive a service bonus of 10 per cent. The extra 10 per cent margin will be based on services sales, Peres said.

Cisco tends to make channel program changes every six months, Peres said. However, there have been no changes to the VIP program in two-and-a-half years.

Peres said that it was not unusual to pay out millions of dollars to one reseller with this program.

Overall, the margins for Cisco partners increased by 17 per cent over those partners who did not participate in the VIP program.

“We were finding that we needed to make changes and there was a new dynamic going on along with new realities in the market. Therefore making these changes we believe will help to motivate the partners,” he said.

“Worms (such as Zotob) are another example of the sophistication hackers have to break into networks. What we are seeing is a level of sophistication of the bad guys is getting greater and greater and the more devices and voice in the network with all the back doors it is more vulnerable. You must ensure you close all the cracks,” he added.

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