LAS VEGAS, Nev. — Resellers who see a professional services practice in their business received a shot in the arm from Cisco Systems Inc. in the form of a Partner Consultative Support program on day two of the firm’s Partner Summit.
PCS is part of Cisco’s Advanced Services portfolio and is a formalized mentoring and knowledge transfer program. PCS will enable partners to gain access to Cisco-branded intellectual capital as well as share best practices with the networking giant.
According to Wim Elfrink, senior vice-president customer advocacy for Cisco, this program will help channel partners build engineering practices more rapidly and encourage them to deploy and support complex network infrastructures in new growth markets such as IP telephony, wireless, security and storage.
“”Service and support is the place to be. It is the prime initiative to engage customers,”” he said. Elfrink cited a Solomon Smith Barney report that found the No. 1 thing for networking partners is to deliver service and support. After service and support, an end-to-end architecture and a good price and product was second and third in the report.
Steve McHale, senior market analyst worldwide channels for IDC Canada believes the PCS program is a good idea, but wonders who in the Canadian market will be ready for it.
“”Who among your partners can do this? Who has the intellectual capital? And Cisco has to make sure it recognizes the value (partners) bring to consulting table,”” McHale said.
Elfrink believes that Gold partners will be ready for PCS today. “”There is an art to selling services and not all the partners will be ready for it today. We need to educate the partners with this,”” he said.
McHale also said that there are too many grey zones from vertical markets to horizontal solutions to size of solutions to size of account to the channel hardware sold on the deal.
“”What happens is you have a consultative sale and Cisco says, ‘This is how much hardware should get into this deal.’ If there is a fundamental disagreement with your partner on how much hardware and on what cycle it needs to be implemented. You have a big engine behind you saying here go along and do it this way. That creates problems for partners on a consultative basis,”” McHale said.
“”It is all about making money in this industry,”” Elfrink said. “”Making money for Cisco and making money for the partners, but the customer should also be satisfied and service and support should not be considered a cost.””
The target margin for PCS is on average 30 per cent. The lowest margin Elfrink envisions a partner earning would be 20 per cent, but added in some case the margin will be in the very high thirties.
“”Service and support is not a cost and can be positioned by the partner as a value,”” he added.
Overall the service and support market is worth US$40 billion worldwide and gaining 20 per cent per year.
“”The pie is growing and getting bigger. Cisco is big in switches and routers and it has to do the same in IP telephony, security, wireless and storage,”” Elfrink said.
Service and support currently is only 18 per cent of Cisco total revenue. Elfrink believes it will grow to between 22 to 25 per cent but that the majority of growth would be had by the partners.
There is a cost to enter this program. The cost is not fixed and could range from $20,000 up to $500,000 in rare cases.
Elfrink has 1,500 Cisco engineers ready for this mentoring program and expects to double the amount of engineers within the next three years.
Besides mentoring, program components include knowledge transfer tools, workshops and jointly authored project documents such as reviews and templates. All can be set up by Cisco partner reps.
The PCS program offers three support levels designated as review, collaborate and development assistance. The program can be tailored to suit any partner’s experience level and can be delivered either remotely or onsite, depending on the project.
Partners will at all times maintain the contractual relationship with the customer. Elfrink says Cisco does not want to be in the integration business.
In other developments at the conference, Cisco launched Cisco Partner View portal. It is a single entry portal for channel partners to gain access to channel tools, resources and applications and collaborate with Cisco. The portal can be personalized and includes modules such as channel announcements, certification and specialization, customer satisfaction, business plan, and support metrics.
Currently over 50 partners have been developing and piloting Cisco Partner View. Gold and silver certified partners will be able to view Cisco Partner View starting in May at www.ciscopartnerview.com.