Cisco promises 'up to 30 per cent margin' on cloud offering

Vendor makes grand margin promises as business model evolves

Cisco has promised partners bumper margins as the firm attempts to land market share in cloud.

The historically networking-focused vendor is expanding in software and cloud, and has indicated a more margin-rich future for partners as a result.

In March, Cisco completed its acquisition of AppDynamics, a business performance monitoring software firm. At its partner summit in Dallas last week, Wendy Bahr, senior vice president and lead, global partner organisation, outlined its channel plans for the firm.

"One of the best new opportunities in multicloud is with AppDynamics' APM (application performance management) - seamless deployment monitoring across a multicloud platform," Bahr told the room of global partners in Dallas.

"You are able to identify performance trends and control cloud spend. You can understand the application dependencies prior to migration, a critical aspect for our customers - it keeps them up at night.

"If you [the partners] bring a customer opportunity to AppDynamics, you have the opportunity to earn up to 30 per cent margin. They [AppDynamics] then go in with their consultative sales approach and they work with the client on all those benefits I just mentioned."

Bahr said if that process results in a network upgrade for cloud services, partners "are there to deliver".

"Since we acquired AppDynamics, their partner business has grown by 220 per cent. Best of all, infrastructure and services increase five to seven times when AppDynamics is sold. [It is] truly one of the most powerful things we have in our portfolio to help take advantage of multicloud," added Bahr.

AppDynamics' data platform correlates with Cisco's data platforms to give joint customers an "end-to-end view" - so from business to user to app to infrastructure. The vendor claims this allows better remediation and automation across the datacentre, network and security.