Cisco urges resellers to play a new game

Channel told to embrace new technologies

Changing your business model is a challenge but there is a great prize out there for those that do, Cisco resellers were told at the networking vendor's partner summit in Las Vegas.

With 88 per cent of all of its business generated by the channel, Cisco claimed it is "completely dependent" on partners for its future growth.

But this growth will happen only if resellers change their business models to reflect the growth opportunities in new technology markets, company executives warned.

Cisco said it is eager to help partners reach this goal of "market velocity" and highlighted a number of initiatives to help partners.

Speaking at the summit, senior vice president of worldwide channels Tom Mitchell said: "The game has changed," and, following up with a hockey analogy, said that resellers had to "go where the puck is going".

For Cisco, the puck is hurtling towards IP telephony, content delivery and wireless. "More and more, successful business models have services wrapped around hardware sales," said Mitchell, adding that services are often three to 10 times more profitable than hardware sales.

To this end, Cisco has tweaked its channel programme to emphasise value and specialisation and move away from volume. It also said that it will give partners access to Cisco tools by allowing them to use its Partner Access Online web portal, which aims to share best practices and gives feedback on customer satisfaction.

"We need you to develop business models to accelerate deployment of new technologies into the marketplace," Mitchell told resellers. "And we need you to get there fast."

He said that, because product differentiation is shrinking, future value will be derived "by the information that systems deliver, not price per port".

Andy Rolfe, principal analyst of the European telecoms group at Gartner Dataquest, told Computer Reseller News that he thought Cisco's new channel programme was a "starting point", but not very different to its previous one. However, he thought that Cisco was "brave" to move away from a volume- to a value-based model.