Cisco claims that its channel strategy has "accelerated like hell" during the COVID-19 crisis, with more partners than ever embracing its shift to software and lifecycle services selling.
During a session with the media as part of its virtual Cisco Live event, CRN sister title Channel Partner Insight asked whether Cisco's messaging to partners has changed since its Partner Summit last November, when Cisco's leadership team urged its channel to embrace the software and services elements of its portfolio in order to remain profitable with the vendor.
It comes as Cisco begins to aggressively reinvent itself as a software vendor amid a wider market shift towards cloud and as-a-service models.
Last November, at Cisco's Partner Summit in Las Vegas, SVP of its global partner organisation, Oliver Tuszik, warned partners that they could lose business to competitors if they're not willing to drive customer renewals as part of Cisco's new focus on customer experience.
Cisco launched a new customer experience certification last year and introduced new rebates connected to lifecycle services in order to encourage partners to embrace new business models.
He told CPI during yesterday's briefing that Cisco has not changed its messaging to the channel to transform their business even during a time of huge economic uncertainty for channel partners and their customers.
Although he did not share any figures, Tuszik added that Cisco's has seen a huge acceleration among its partner community towards software and services selling over the last six months as a direct result of the COVID-19 crisis.
"We told partners at this time that they needed to shift their business, and that has accelerated like hell. And don't get me wrong, I don't want to say anything positive about COVID-19, but it accelerated some of the stuff that we as an industry were driving over the last couple of years," he said.
Tuszik said that the partners that took Cisco's warnings seriously, and began to transform their business and move away from selling hardware, are now reaping the rewards.
He also said partners operating in countries hit hard by the pandemic and failed to invest in new business areas with Cisco are being massively impacted.
"Overall it is very clear that the partners who invested early in the transformation are seeing the benefit right now. Whereas partners who thought they had more time have seen a massive [negative] impact," he said.
"We see some partners are pretty relaxed right now because they have built up the capabilities before. For partners that focused on software but also on as-a-service solutions, they can't manage the demand they're seeing."
Partners with a healthy balance sheet and a strong financial model will continue to invest in Cisco's software and lifecycle services portfolio, Tuszik said. But those that were already struggling financially when the COVID-19 crisis hit will have "real problems".
"This is a challenge, because you need to have a good performing business platform in order to invest and be able to transform. The perform business is breaking away, and your capability to do long-term transformation is reduced, which is a challenge."
Despite COVID-19 producing a global economic downturn and market uncertainty, Tuszik said there have been some positive side effects from the pandemic in forcing once conservative organisations to embrace new technologies.
He pointed to Italy and the US, which before the pandemic had strict regulations for supplying cloud services to the government or healthcare organisations. As a result of the coronavirus, these regulations have been relaxed to adopt cloud services as workforces began working remotely.
Tuszik also said that some industries and sections of the market are beginning to see some early signs of recovery, and Cisco is even predicting a rebound effect in some of its partner segments.
"We see an economy downtown, we see that the business is slowing, and that a lot of our customers are struggling to continue their business. But it's also interesting to see that we see first countries that see the light at the end of the tunnel," he said.
"There's some regions and some industries that see the rebound coming. It's not there, don't get me wrong. And in certain regions, certain areas, it will take longer. But we're in a phase where we can predict an uptake, and it's our job right now, our team's job to help our partners through this slow down in the business and have them to prepare for the new normal."
Cisco launched a couple of new channel focused initiatives during Cisco Live, including new additions to its Business Critical Services 3.0 programme.
Partners will be able to place direct orders through the Cisco Commerce Workspace (CCW) tool. Registering, quoting and ordering will be accessible through CCW for Tier 1 partners at the end of June, while Tier 2 partners will have to wait until later this year.
Cisco claims it has also made it easier to purchase multiple packages by architecture through a new multi-architecture option for Essentials and Advanced tiers.
The vendor also says it has made improvements to its incentives structure to help partners remain profitable.
Click here for the full list of additions to Cisco's Business Critical Services 3.0 programme.
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