Critique on Cisco channel partner program by former Cisco sales executive, Kevin Avery
"The unifying theme of these four points is that Cisco needs to wrestle with unavoidable complexity, but there's almost a chemical aversion to that in the culture at present."
Cisco's Partner program is consistently highly rated, and they do listen and try to be responsive. Here's a recently departed insider's view of both strengths and remaining areas of opportunity.
VIP was a masterstroke. Dating to 2000, this back-end margin replacement program has reduced the negative impact of base reseller margin going right to the street. Say the reseller margin is 35%; then some partners (especially big SPs) walk in the door waving 34% discount. To this day, most of the margin-crushers haven't figured out how to treat VIP as if it were margin at sale, despite it being essentially a full-on entitlement (no one ever fails to get VIP).
The following items represent further opportunity to increase productivity of Channel spend, which (as a shareholder) matters.
VIP is overdue to be tweaked. What was value-add 10 or even 5 years ago isn't anymore. They're paying too much for things that Partners sell habitually and would do so even if VIP decreased. In the Collaboration realm, a chunk should be earmarked to reward driving application consumption (more users, broader utilization). Of course before they make this change, they need to make sure Partners are skilled to drive consumption.
Stop allowing activity as proxy for value (e.g., Biz Value cert: Take a training class; voila you're biz relevant. Saying the words transformation or business value as if they were incantations is never going to have effect.)
Do the hard work. Make investments to solve sales execution issues that hamstring Partners, i.e., lowering hurdles that make it seem too risky to change their approach. More incentive won't fix this, it will only throw away margin. In fact, if you helped Partners execute better, you might be able to reduce subsidies. Even a small fraction of $400MM annually is real money.
The "deal registration" programs aim to reward Partners for initiative in selling, but despite a huge volume of OIPs awarded, there's scant evidence of the desired behavior. In the US, independent Partner selling above SMB is rare. It ends up being both easier and lower-risk to generate leads chiefly by buddying up to Cisco reps. How to change this is beyond the scope of these comments, but it is achievable.
Reduce waste in Marketing. Cut out "plays" that are just extra discount+collateral+hope.
The unifying theme of these four points is that Cisco needs to wrestle with unavoidable complexity, but there's almost a chemical aversion to that in the culture at present.
