Cisco defends Fast Track 2 expansion
Networking giant expected to add more SKUs to scheme to make partners more competitive and fleet-footed in transactional space
Cisco has defended its Fast Track 2 (FT2) programme as it gets set to add more products to the simplified-pricing scheme, which has not been universally embraced by its partners.
Launched in November, FT2 is designed to enable quick sales of high-volume products by setting a flat discount through distribution (typically about 40 per cent).
Currently, 2,500 SKUs fall under the programme and it is thought more will be added next month, rumoured to include its C-Series UCS servers.
One Cisco partner, who wished to remain anonymous, said the fact that OIP [opportunity incentive programme] rebates are not compatible with FT2 had decimated his margins on runrate routing, switching and security sales. He expressed concern that FT2 would be extended further.
"The distributors are selling this through everyone so anyone can set up and get the same price as us on a 3750 switch," he said. "There's no protection on deals."
Gordon Mackintosh, FT2 sales team lead at Cisco, stressed the scheme is designed to boost partners' competitiveness and responsiveness in the SMB and commercial segments.
"We do understand that this is a new kind of go-to-market approach for our partners; focusing on high-volume products compared with our traditional, very well-known, value-based channel partner model.
"FT2 is about delivering the best price in a consistent, predictable and most importantly, a fast way. Previously, a deal registration process would be slowed down by the quote process and with this increase the overall length of the deal cycle."
Jon Pritchard, president of Cisco distributor Comstor Worldwide, said he had some sympathy with top partners that have seen margins on transactional products drop. But he argued the increased availability of top-selling products through distribution would drive up Cisco partners' sales.
"Maybe where some of the frustration lies with flat pricing is that it doesn't matter what level of partner you are - Joe Bloggs can buy at that same flat price," he said.
"But Cisco's motivation is right. FT2 is driving the price to a point where it is competitive and we hope that helps partners to drive demand."
Mackintosh was unable to confirm rumours that FT2's scope would be expanded further but said Cisco was "constantly reviewing the portfolio".
Paul Sweeney, managing director of Cisco Gold partner ANS Group, said he would welcome the entry of Cisco's entry-level data centre kit into the programme. "Getting UCS C-Series aggressively priced with the catalogue players will drive awareness," he said.
Stuart Fenton, EMEA president at Cisco Gold partner Insight Enterprises, said: "Deal registration programmes have their place but on transactional, commoditised products I am not sure they are appropriate. As products commoditise, deal registration becomes an administrative and cost burden and Cisco, like others, are assessing the value of these types of programmes."