Cisco TAPs into competitors

VANCOUVER – In a surprise announcement at its annual Partner Summit, held for the first time in Canada, Cisco Systems Corp. said its Trade In Accelerator Program (TAP) will be made available to all of its resellers.

Edison Peres, vice president of worldwide channels for advanced and core

technologies, said the move was made to stimulate the migration of legacy systems and current voice systems to advanced technology systems and VoIP. TAP was only available to end users.

“”We will be offering a dollar value for products traded in,”” he said. “”This will lower the cost of original equipment with at 15 per cent rebate for utilizing the program.””

Peres added that Cisco estimates there is a US$40 billion opportunity to replace three to five year-old switching and routing equipment from the company and its competitors. The TAP program will offer $1.50 for each trade in product valued at $10, for example. The payout will be in rebate form and will be deliver six months after trade in occurred.

However, the program in Canada will be different. Instead of partners receiving hard rebate dollars for trade-ins they will get it in market development funds.</P.

According to Steve Simmons, vice-president of Canadian channels for Cisco, the decision to go with market development funds instead of cash came from talking to its partner base.

“”Every theatre within Cisco operates differently,”” he said. “”We looked at the best ways to go to market with this program and for all investment programs. The feedback we received from our partner base in Canada was to work with them using market development funds to get more business plans developed and get more action to turn the base (the migration of legacy systems to advanced technology),”” Simmons said.

The TAP program will work the same in terms of partners receiving 15 per cent of the trade in value delivered every six months. The program is only available on hardware products, but Peres believes the majority of the trade-in will be switching and routing equipment.Simmons sited the RAM Group of Vaughan, Ont., as an example of a partner who has a complete sales, marketing and integrated service solution with its American Express/SAP solution.

TAP will work with Cisco’s Value Incentive Program (VIP) and Opportunity Incentive Program (OIP). Cisco Canada has paid out more than $15 million to partners since the inception of those programs and will include services to the mix starting in August of this year, Simmons added.

“”More than 20 per cent gross profit margins on every voice and security deal has been paid out since inception,”” Simmons said. For the OIP plan, in the commercial market Cisco partners have been able to win 843 deals worth more than $36 million in net business, not list price, Simmons said.

For the next two quarters, Cisco Canada will double that margin in a special program called “”3 for 2,”” in which 50 to 100 per cent more margins will be passed on to partners in the remain two quarters of this year to help them penetrate the SMB space more rapidly, Simmons said.

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Jim Love, Chief Content Officer, IT World Canada

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