Throwing down the gauntlet
Cisco's recent Partner Summit in San Diego revealed a vendor that is primed and ready to come out fighting. Its rivals had better watch their backs, warns Sam Trendall
"I wish I were a better person, but I'm not," said a mischievous John Chambers as he put the boot into rival manufacturers on the first morning of Cisco's global partner get-together this month in San Diego.
After nigh on 20 years at the vendor's helm, networking's big daddy must be used to setting the tone and his opening keynote foreshadowed an event in which Cisco rediscovered something of its snarl.
Over the years the vendor has seen off many start-ups and also-rans. But as it approaches the beginning of its fourth decade in business, Cisco finds itself suddenly pitted against some of the industry's biggest fish. Its heavyweight battle with HP continues, although the heat may now be more of a simmer than the raging boil of two years ago. Meanwhile, Microsoft continues to make headway in the unified communications (UC) space, and the threat from Chinese giant Huawei may prove the biggest of all.
But Chambers (pictured below) told partners assembled in southern California that he felt competition is less tough than it was a year ago as Cisco's ability to evolve and track market trends has seen it best its rivals. The vendor's move towards architectures, rather than siloed products, has been a key differentiator, he explained.
"Our peers have stayed focused on individual products for way too long," said Chambers.
He claimed that average products and services are no longer viable, while above-average wares will no longer be acceptable in three to five years. Rivals such as Juniper and HP offering customers "just good-enough [solutions] at 30 per cent off" are losing ground to Cisco, he asserted.
"[In the past year] Juniper got themselves spread too thin and we got them; first in service provider, then in the enterprise," he said.
Rob Lloyd, executive vice president of worldwide operations at Cisco, strongly denied that the vendor is worried about its Far Eastern rival. He claimed that Huawei is not able to compete on price as aggressively as it may initially have believed.
"Recently they are seeing that that is much harder, and the interest from the Cisco networking channel is very low," he explained. "What we deliver [for partners] is based on trust and relationships. We feel confident that the Cisco channel is rejecting the attention of Huawei."
But it is not just on product pricing that Huawei has been aggressive. Cisco CCIE skills have long been some of the most prized engineering abilities in the channel. But some have suggested in recent months that the Chinese firm, alongside other Cisco rivals, may be able to force down the premium price attached to CCIEs.
Speaking to CRN, Nick Earle, vice president of worldwide services sales and channels, denied that rivals are diminishing the profitability of CCIEs.
"We have not seen that; we see the demand for CCIEs accelerating," he added. "We have seen people such as Huawei saying: ‘We will accept Cisco certifications'. But, as Rob Lloyd said: ‘imitation is not innovation'. We have partnering in our blood, they do not. Simply saying: ‘we accept Cisco certifications' is not a substitute for your own certifications. People are very emotional about CCIE and the salary difference is measurable. CCIE is the way to earn more money, and demand for it is exploding."
Microsoft also found itself in the crosshairs in San Diego, with the launch of the Jabber application designed to lead the fightback against the software giant's Lync application in the UC arena.
Jabber, which works with all client devices and operating systems, allows users to access Cisco's voice, video, messaging, presence and conferencing platforms. There are no server or client licensing costs on messaging and presence for existing customers.
Wayne Stephens, EMEA director of Cisco's Collaboration Partner Organisation, claimed that, despite the lack of licence revenue, VARs can use Jabber to create upsell opportunities and drive adoption of the wider collaboration portfolio.
"Some deals are stalled by the fact that customers say ‘I have [Microsoft] Lync in my licence estate'. I think this should help," he added.
Mike Danson, managing director of partner Touchbase UK, indicated that Microsoft has been giving Cisco a tough time in the collaboration space in recent months. He indicated that Cisco had little option but to forego licensing costs for Jabber.
"Cisco had to do it in that way, with Microsoft Lync gaining traction. In a lot of our proof-of-concepts, [the presence of] Lync is the single biggest threat," he said. "Monetising [Jabber] - we all have to handle that. We have to culturally get our heads around that if we are going to stand a chance of beating Microsoft on the desktop, and we need to do it at speed. It is a platform to future profit, and I am sure there is a services opportunity."
Other partners indicated they had already been swallowing customers' UC integration costs in a bid to stave off the Microsoft threat, and welcomed the launch of Jabber.
The introduction of a global services programme, which unifies 47 disparate schemes into one overarching framework, was the biggest programme launch at the partner shindig. The scheme has been designed to "look and feel like" product resale programmes, having been built around the same discount and rebate structures for pre-defined SKUs.
Partners will be able to work under the scheme as a services reseller, or as a collaborative services provider, earning quarterly rebates of up to 24 and 32 per cent respectively.
Commanding the Master
A new programme designed specifically for resellers targeting the mid-market space, was also unveiled in San Diego. Andrew Sage, Cisco's vice president of Partner Led, told attendees that the scheme, dubbed Partner Plus, will be built around three key tenets: preference, support and investment.
Partners joining the programme will benefit from marketing funding, customer intelligence and training. A pre-sales engineering service is also being launched exclusively for Partner Plus members, and an incentive programme will be put in place.
Cloud chat was hard to escape during the event, and Cisco unveiled its latest Master accreditation, for Cloud Builder partners.
The vendor also announced that its Managed Services Cisco Partner scheme will be merged with the Cloud Partner Programme, which was unveiled at last year's Global Partner Summit.
Partners voiced a positive reaction to the launch of the latest Master badge. Chris Gabriel, vice president of solutions management at Logicalis, was among those to refute the suggestion that Master badges can represent a large investment for something that may not be a deal-breaker for customers.
"[Master certifications are] less customer-facing, so much as inward-facing into Cisco. One of the things Cisco has done better than anyone is provide support in building out clouds. It is more than a badge, it's an engagement we have [with Cisco]," he explained.
VARs from further afield echoed this sentiment, with Dave Hart, chief technology officer of predominantly US-focused outfit Presidio, telling CRN he "respectfully disagreed" with the suggestion that it delivered little return on a big investment.
"The Master certification, the reason we do them is that we like the customers to feel it holds us accountable. We will absolutely pursue the cloud Master," he added.
Steven Sanderson, senior manager of cloud go-to-market for Cisco's Worldwide Partner Organisation, claimed that, in addition to increased rebates, partners can benefit from greater traction with customers.
"We are going out of our way to actively promote it so that customers recognise the [Master] brand, as well as our own sales force," he said. "They find a lot of opportunities, and they need to go to our approved cloud builders."
Distributors are also set to land an invite to Cisco's cloud party, with Ed Baker, Cisco's EMEA director of datacentre channel, revealing that the vendor is currently piloting the Cloud Services Distributor programme, with a view to launching the scheme in July. The vendor will be looking to the channel's middlemen to act as "matchmakers", ensuring that Cisco and its certified Cloud Providers work with resellers that are sufficiently skilled to deliver cloud services to end users.
"We can see a key role for distributors to play in the delivery of Cisco Powered Cloud Services," said Baker. "This is a great way to accelerate the adoption of those services."
Lloyd, who delivered the event's closing keynote, talked up Cisco's "work your way" vision of a unified workspace, and provided more aggression.
"If you work your way with Microsoft, there is only one way: their way," he said. "If you do it with HP, after years of starving R&D, lack of innovation and so much money attached to the past, you do not work your way, you work the old way. And can you work your way with the Huawei way? They are already working on the copy [of ours].
"Let's be clear: imitation is not innovation. Partnering runs in our blood, there is not a drop of it in Huawei's. If there is one thing we [will] not abandon, it is the trust and depth of the relationships we have built together, that we believe differentiates Cisco from every other company in the industry."