Cisco's newly unveiled intuitive, ‘intent-based' network is its most significant launch in more than a decade, and will have a ripple effect through the industry, according to its CEO Chuck Robbins. CRN sat down with Cisco's UK and Ireland channel boss, Angela Whitty, to discuss where the intuitive networking concept - and Cisco's wider push into software - will leave partners, and how Cisco is tackling claims that it is arrogant
Chuck Robbins says intuitive networking represents a "change in how [we] think of the network". How will it affect the role your partners play and their ability to make money with Cisco?
If you think about how the network has evolved, it's now all around a network that can learn and adapt, moving from manual to more automated processes. But that doesn't mean a move away from skills. The skills of our partner base become more important, and if you look at the commercials around the new products that have been launched - the Catalyst 9000 switches - they are moving to more of a subscription model. That's where we see all of our partners are looking to move anyway.
We've put a lot of thought into how we help our partners shift from the hardware-centric selling model of the past to the more customer-outcome, business-outcome-led sales motions that you need for focusing on the new way of doing business. We've put lots of incentives and programmes in place. We have a voucher scheme that gives them an incentive on a per-customer basis, and we are doing a lot around enablement through roadshows, webinars and free mentoring schemes.
The partners who are more proactively moving from that hardware-centric approach into the more business-outcome-led selling are seeing their revenue growing twofold, and in some instances more.
Is Intuitive Networking just a repackaging of lots of things Cisco has already launched?
Absolutely not. We've got new hardware in the Catalyst 9000 family and a new architecture that builds on the methodology of DNA. Even the silicon in the products is all new as well. But also the commercial models: everything is going towards licensing and annuity-based models and recurring revenue. It is a complete change and a completely different way of doing business; it will be revolutionary.
Chuck Robbins has been talking about Cisco's shift to a software-led business model for a couple of years. How far through that journey is Cisco now?
Substantially. On our last earnings call, about 30 per cent of our revenues were recurring revenues, with a view to having 50 per cent of our revenues in a three- to five-year period coming from our software business. So we are well down that journey, and that's probably reflected somewhat in our share price [which is currently close to a 17-year high].
Some partners have expressed fears that the rise of AWS and Microsoft Azure is beginning to erode Cisco's channel margins. Do you plan to compete head to head with them in the cloud, and more generally how can you protect channel margins in the cloud era?
I don't think going head to head is something that Cisco would want to do. There has always been talk about wholesale adoption of cloud across the piece, but we haven't seen that happen the way it was predicted. Most customers will have more of a hybrid approach so it's probably in everyone's interests - and this is Cisco's approach - that we actually work with cloud providers rather than treating them as direct competition. If you think about the hybrid approach, it will mean you will have workflows that are in the private and public cloud, and ultimately at some point you need to bring them together. Therefore the infrastructure and the networking - and maintaining the infrastructure and network and complex services that go around it - remain key. That's the fundamental role our partners play to our customers. So I understand the fear, but I don't believe it's something that will be realised; I think the role the partners play in the whole hybrid model will stop that from happening.
The perception of Cisco among smaller partners particularly is that you can be remote and arrogant, both towards them and with their customers. What is your response when people say that?
It's always upsetting to hear that. I would encourage people who feel that way to reach out to me personally, and we will do what we can to support them. We have a base of around 4,000 partners within the UK, of all sizes. My team and I take a lot of feedback from distribution channels, and where they identify partners who can grow their Cisco business, or have some opportunities where they need support, we try to get to as many as possible.
We are still in the planning phase at the moment but we are looking at some simple things to implement next [fiscal] year to make sure that we touch - whether that be through virtual resources or some field-based resources - as many partners as possible. We've done some of it but I think we still have a long way to go.
Cisco's been on an acquisition roll. Which ones do you see as the priority in terms of rolling them to partners?
They're all important. But partners are the fundamental go-to-market engine that we have, and over the last 12 to 18 months you've seen the coming together of our internal sales strategy and our external, partner strategy. We've made all the information, the videos, the whitepapers etc that are available to our internal sales teams available to our partners as well. Even from a messaging point of view, Cisco has its major global sales event in August and we've brought forward the partner summit to November.
Your UCS business has shrunk in recent quarters. How much of a worry is that, and are you committed to it?
The UCS business has a massive install base - about 60,000 customers worldwide. And it is a business we continue to invest in and grow, with the most recent introductions around Hyperflex. Hyperflex went from a standing start to being the number-one platform within a relatively short space of time, and I've not heard any comments internally around concerns.
You recently launched your ‘Global Gold' accreditation with five partners. It has some pretty significant thresholds. Are any other partners working towards it?
I've heard that there are a couple more partners who are thinking about making that investment as well. The programme was brought in to allow partners who have that global coverage to offer a consistent global service to their customers, rather than asking them to invest over and over again in multiple countries. But that doesn't mean that they take precedence over our regional or even local Gold partners.
What are your priorities for the second half of 2017?
We will build out our coverage model in the UK. The idea would be to get away from the perception that we are keeping the smaller partners at arm's length. I absolutely understand that where an owner-managed business is investing in Cisco, they would like to see Cisco's skin in the game, and we're going to be doing everything we can to increase our reach so we are touching as many partners as possible in one way or another.
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