Cisco tweaks partner programs to drive APAC reach

BANGKOK--Cisco System has tweaked its channel programs to address margin pressures and price disparities among distributors and partners. It has also provided them with more access to technical support and analytics as part of the networking vendor's drive to expand its reach to more Asia-Pacific small and midsize businesses (SMBs).

A new streamlined program called Cisco Services Partner Program (CSPP) is now in place to achieve greater simplicity across its global partner network, said Denzil Green, director for partner business group Asia-Pacific, Japan and Greater China, who was speaking during a media briefing at the Cisco Systems Partner Led Network conference here Thursday.

He added the new program replaced the many legacy schemes which were fragmented, and included tweaks such as a backend loaded rebate model and more open access to its "smart services" or virtual technical support. The CSPP rolled out in March and is lived in the Asia-Pacific, with Greater China and Japan the last two markets to come online at the end of third quarter 2013, he said.

He added 7,100 partners across the rest of the region have already enrolled, such as Australia, New Zealand and India.

Replacing fragmented legacy schemes
A Cisco spokesperson noted the changes were implemented due to partner feedback, partly about the complicated nature of the rebate policies, of which there were more than 40. He added some were country-specific which saw unequal pricing across partners.

Rebates or discounts are typically given to channel partners and distributors to help them make margins on sales. 

"It was definitely more confusing previously, and the new changes really help makes things clearer and fairer," said Rajiv Kumar, CEO of Proactive Data Systems, which is a Cisco partner based in India.

"It was definitely more confusing previously, and the new changes really help makes things clearer and fairer," said Rajiv Kumar, CEO of Proactive Data Systems.

He explained the new backend rebate system was performance-based, which meant financial incentives were given after sales were made. This was an improvement from the previous model where discounts were given upfront, which saw many resellers and distributors undercut each other for business and severely hurt margins, the CEO added.

Green pointed out as part of Cisco's efforts to raise the capabilities of its partners, the CSPP will also open up their access to Cisco's smart services. For instance, partners will be able to leverage a monitoring system which will give better visibility of their client's networks.

"The service means we can now preempt any problems. For example, if data centers were running dangerously close to capacity, we could call them up to advise them," said Rajiv, adding this was also an efficient way of generating leads.

Leveraging partners key to market leadership
According to Mayur Sahni, research manager for IT services and BPO at IDC, the battle for market leadership will be fought at the partner level as no vendor can go the distance alone, especially in the Asia-Pacific context.

Sahni said Cisco's focus on building an ecosystem of partners and channels was positive, but pointed out in order to do so, the networking vendor would need to recruit, train, and empower partners  to take its offerings to market.

"The bets placed by Cisco in terms of change in buying trend, next-gen workspace, bring your own device (BYOD), and hybrid cloud are all well placed, and I echo the outlook. However, this is a hotly contested market," he said.

The IDC analyst added the CSPP program would be key to unlocking the region's market potential, and the improvements were particularly relevant for its growth in the region.
In order to boost its reach in the SMB market, Cisco also announced Thursday a new portfolio of products aimed at the segment. This includes an all-in-one network security product, the ISA500 Series Integrated Appliances, and a router--RV215W Wireless-N VPN Router--to enable affordable wireless connectivity through 3G and 4G networks.