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Cisco has embarked on a mission to simplify and improve partner experience to ensure that the channel is in a position to react to changing customer consumption models.
The pandemic has accelerated the shift to hybrid working and the adoption of digital, and has made it more important for partners to be able to react to user demand and to reach out across cloud marketplaces, whether by managed services or through the web.
Oliver Tuszik, senior vice-president of global partner sales at Cisco, said that the world is changing and that Cisco had to react to make sure the experiences it offers partners are optimised.
“What we’re seeing here is that customers have different buying motions, and they’re radically changing for us. When we look at the details, it’s not the motion, it’s also the routes to market,” he said.
He shared figures that showed that reselling would remain an important route to market, but cloud marketplaces had seen 64% growth in the past year, along with a 17% climb in managed services. Therefore, he added, Cisco needed to make sure partners could take advantage of those routes to market.
“In the past, [a partner might] have to manage one go-to market. We now need to manage four or five different rules, which means life is getting much more complex – and complexity is the one thing that is destroying their profitability,” he said.
Tuszik said that partner profitability was Cisco’s number one priority, and it was determined to reduce some of the complexity and improve the situation by investing in its partner experience platform (PXP) that will arm its channel with the best data, insights and actions to drive their business.
Jose van Dijk, vice-president of partner performance at Cisco, has been put in charge of delivering a solid PXP experience and has already identified some of the challenges that need dealing with.
“One of the first things that I asked the team is, ‘What are the tools that our partner are using?’, and I got about 180 of them, and that’s a little bit too much if you want to drive productivity. So we’re on this mission to retire at least 50%,” she said.
Van Dijk said that the firm was looking at making sure it kept tools in PXP that were useful for partners, and it’s on a mission to get to that 50% as fast as possible.
“The innovation is here in this platform and we’re doing this by focusing on three major areas: simplification, digitisation and personalising the experience so that the data, as well as the information, will find the right person within the partner organisation,” she said.
Tuszik also commented on the current state of the channel, noting that the indirect business was performing strongly and the shift by its partners towards recurring revenue-led business was also increasing, up by 63% year on year (YoY).
“The ones who are leading this shift to software and recurring are the partners. They are growing their recurring revenue, that’s very important because it’s a hot topic for them,” he said.
“It starts with activation and adoption. We see that partners are selling more and more adoption service, with a growth of 33%, because this is where the partner can make the money and where they can differentiate.”
Tuszik added that partners were also increasing renewal rates, up 40% YoY. He also highlighted the contribution of distribution, pointing out that it had contributed more than 50% to Cisco growth since fiscal year (FY) 2014.
“Distribution is our biggest and best growth engine. We were looking back to FY14, and when we take all the growth that we delivered since that time, more than 50% is coming from the distribution,” he said.