Cisco prepares partners for economic storm

Vendor tells partners to buckle up in anticipation of "unprecedented" storm that lies ahead

Cisco has joined the queue of industry players admitting next year is going to be tough for the industry.

However the vendor, which predicted difficult time ahead in its results this week (channelweb, 6 November), has expressed confidence that it and its partners will come out the other side tougher than before.

Edison Peres, senior vice president, worldwide channels go-to-market group, said: “What we are about to go through is really unprecedented. We are going into uncertain economic times and it is a top of the mind issue, not just for our partners but for Cisco as well.

“What we do as a manufacturer in supporting our partners is very important. A storm is something we go through as we head to our destination. We need to stay focused on the future,” he said.

Peres said the vendor has been ‘prudent’ in its lending over recent years, and as a result its global finance arm Cisco Capital, is in a strong position to provide support to partners in terms of financing and leasing.

“Disciplined financial management is key. We have been prudent in our lending practices in recent years and as a result are in a strong position. At present 50 per cent of all the business we do through partners (and that is 80 per cent over Cisco’s overall business) is done through Cisco capital. Many partners have not yet taken advantage of this and we encourage them to do so.

“We have the opportunity because we understand the technology well to give more credit on the equipment. We have many options for the end user in terms of financing to encourage them to keep spending,” Peres added.

The networking giant also unveiled a new initiative, dubbed the Installed Base Lifecycle Management Practice (IBLM), aimed at helping partners take advantage of the estimated $20bn worth of obsolete equipment being used in its installed customer base.

Thierry Drilhon, vice president of European channels, said: “This will make it easier for our partners to capture opportunity in the market. We want to recognise partners that are going to invest in our installed base, and help them take a share in a tremendous opportunity in Europe.”

Cisco’s IBLM was welcomed by its largest partner – Dimension Data. Peter Ellis, director of network integration at the integrator, said: “IBLM is my big plan for 2009 as it is a massive opportunity for us. It helps us in four main ways - by changing the way we engage with customers, providing a set of tools that allows us to discover the technology on a customer’s network, undertaking business reviews that we can turn into a value proposition and also guaranteeing an element of recurrence of this process.”