Cisco reseller rewards linked to company performance

Cisco Systems is launching a reseller program with rewards tied to its financial performance just as its revenue dropped 25 per cent.

Called “Take Stock in Cisco,” the program offers bonuses for selling select Cisco products in the form of SharePoints. These can be redeemed for cash based on the value of Cisco shares on the Nasdaq stock exchange. Security regulations in the United States forbid Cisco to offer actual shares to Canadian partners, which was why the program has been tweaked for the local market. The program is open to the company’s tier-two authorized resellers, premier and premier select partners.

“If Cisco’s successful, and we see our partners as a sales and support extension of Cisco’s capabilities for its customers, we want the resellers to be successful,” said Brent Rebus, channel operations manager for Cisco Systems of Canada in Toronto. “If you take a look at us as an organization, we have incentives for our employees that if the company is successful, then the employees should benefit. We’re trying to do the same thing here.”

In some respects, the program comes at an inopportune time for the networking equipment specialist. While it reported its most impressive growth in four years in 2000, Cisco has since been dragged down into the market doldrums as key competitive local exchange carriers and dot-com customers have either downsized or gone out of business completely.

Earlier this month, Cisco released fourth-quarter results that met analyst’s expectations, but revealed profits had fallen 86 per cent. Revenue suffered considerably, coming in at US$4.3 billion compared to US$5.7 billion the same time last year. Including one-time costs, Cisco actually earned fourth-quarter net income of US$7 million, or zero points per share, compared with 11 cents a share in Q4 2000.

Rebus said there was nothing extraordinary about the timing of Take Stock in Cisco.

“It’s a quarterly program, and that’s our first quarter,” he said. “In terms of running programs you have to do them on a quarterly basis, because otherwise, if you had them going on forever then essentially it becomes an operating practice.”

VARs interested in the program can register at</FONT. Once the registration form is complete, partners will be given an ID number and logon that will generate their Take Stock in Cisco Web page. The pages require a cookie-enabled browser which expire upon logout.

“All of (our resellers) would be eligible,” Rebus said. “Most of the activities that we provide, be it be sales support, education, training, tracking of their customer’s requirements is all done through the Web. It’s become — I don’t want to call it routine — but the operational benefits of leveraging Web technology and Internet applications have definitely been seen by our partners.”

Authorized Canadian Cisco Distributors participating in Take Stock in Cisco include EMJ, Multimicro, Ingram Micro Canada and Tech Data Canada.

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