This year's Cisco Partner Summit was set to be a big one. Last year, the message from Cisco's channel team was that momentous changes are coming, and partners have 12 months to align themselves with Cisco's new customer experience strategy.
The message to partners was nuanced and sophisticated; it recognised that its channel leaders are running the day-to-day operations of businesses with hundreds if not thousands of employees. If change is going to happen, said Cisco, it must be realistic and manageable.
This year was it. After 12 months of anticipation, Cisco was finally going to reveal how partners will fit into its new strategy, how its customer experience certification really works and how programmes and incentives will change.
But based on what we've heard from Cisco's channel executives and from its European partners attending Cisco Partner Summit 2019, nothing has really changed yet.
EMEAR channel boss David Meads said it could be another six to 12 months before Cisco starts moving incentives around.
We understand that incentives are eventually going to move further down the sales cycle. Partners will ultimately get less money for the upfront sale of Cisco products and will instead recover their rewards at the point of activation, adoption and renewal.
I asked Cisco's execs for a breakdown of how the Lifecycle Incentive programme works, but I wasn't given a straight answer. We don't know exactly how much incentive is going to be taken away from the initial sale, and how quickly that money will move.
There was one thing Cisco could guarantee: the firm will not take money out of the channel. CEO Chuck Robbins told us that the channel accounts for almost 90 per cent of Cisco's total revenues - its highest point in six years.
12-month window was a master stroke by Cisco
Giving partners 12 months to prepare was clearly a master stroke by Cisco. The overwhelming consensus from the partners I spoke to was that the firm has been predictable, trustworthy and easy to work with throughout the process.
"From a partner perspective I think they provided good notice of the changes so we've all been able to plan around it," said Claus Thorsgaard, CEO of Cisco Gold partner Conscia.
"Every year there's typically a big announcement. This year was different - there were fewer big announcements but more maturity around some of the initiatives that were launched last year. Which in essence is good, because if you launch big ideas every year it takes time to adopt, take it in and do something about it."
It's clear that partners have taken heed of global channel boss Oliver Tuszik's advice to use this year-long window wisely.
Cisco has on-boarded 152 more IoT partners in the last 12 months. Its software developer programme - DevNet - has seen a 227 per cent increase in members, with a 52 per cent increase in DevNet Sandbox users.
Some 67 per cent of Cisco's partners are now adopting a recurring revenue sales model, while 43 per cent of its partners have established a Cisco customer success practice.
Many partners applauded how Robbins has transformed the company since he became CEO in 2015. Just last year, Robbins brought new blood into the company to spearhead its customer experience vision, including ex-Salesforce exec Maria Martinez.
"Chuck [Robbins] is trying to motivate the organisation to understand that they will be better if they listen. I think he is great, I really think he's great. I was sceptical when John Chambers stopped, because he was a legend. But then Chuck came in, and I knew him a little bit but not as well, and he started building a new Cisco," said CEO of Atea, Steinar Sønsteby.
For Thorsgaard, making this year's partner summit a continuation of last year's was a welcome move.
"There's clearly a change, but that's the whole point, right? Incentives are there to make sure the customer is adopting, loving and renewing the products rather than just transacting and buying. That's the new world and I think it's here to stay," he said.
"I like where they're going with the strategy and how things are mapping out," agreed Softcat's director of solutions, services and marketing, Richard Wyn Griffith.
"I've come away feeling good about our relationship with Cisco and it all makes me feel pretty confident that we've been heading in the right direction and we're on the right trajectory, if not slightly ahead, of where we need to be structurally and organisationally to take advantage of what Cisco is trying to do."
But let's not say 'job well done' just yet…
Cisco's message has worked. The firm has no doubt won over its partners with its vision of how life cycle services will benefit everyone.
But let's not forget that nothing has really changed yet and Cisco's challenge has only just begun. For many partners, the success of Cisco's customer experience strategy hinges on how it executes over the next six to 12 months.
"Cisco for many, many years has been one of the best at spotting timings and when to change. But the big challenge is from now on and the next year. So when we talk a year from now, I think that will be the proof or otherwise that the 12-month period has been good," said Sønsteby.
"So far it seems like they're listening. But if they screw up the next three to six months by moving incentives in the wrong way or something like that, they're going to have hell. I think it's more in the execution ahead of us than it is behind us."
"They're still on the journey. It's not done," agrees Griffith. "The success that we see will depend on how incentives play out and how customers determine the value and the quality of the engagement and how that affects each level of the customer, from the CXO (customer experience officer) to the data network administrator and so on."
Cisco's EMEAR channel boss Meads previously told us that partners are at drastically different stages in adopting life cycle services, and the investments that many partners make in the next year or two will determine how profitable they remain with Cisco.
"Ultimately, each partner needs to make that decision themselves," he said.
"Be ready for the fact it could be less profitable in the short term. And the reality is, for some it might be but for others it won't be. For every example where a partner is saying it will impact their profitability, I can give you an example of one where it won't."
But it's clear from the various announcements at the Las Vegas partner conference that Cisco is making it easy for partners to quickly go to market with life cycle services.
The vendor announced several packaged managed services offers for partners to resell, including managed detection and response, SD-WAN and unified communications. New solutions support across its portfolio and its Solution Starter incentive will also certainly help drive life cycle adoption.
Seasoned software partners are already ahead of the curve
Grappling with customer experience poses a genuine challenge for many of Cisco's entrenched hardware partners.
Partners will need to hire in new skills such as customer success managers to handle customer renewals; software developers to earn Cisco's new DevNet specialisation; and managed services staff to drive customer adoption.
But for any partners that are already managing enterprise agreements with Salesforce or Microsoft, these are all skills they already have.
According to Thorsgaard, skilled software partners are already five years ahead of where Cisco is today.
"Essentially, customer experience is just doing what we've always done but in a more structured way - that's really all it is. And obviously making sure that the adoption and the renewal takes place, and there are some boxes we need to check to make it happen," he said.
"Software companies have already been there. They are probably four or five years ahead of Cisco and others."
For Griffith, Cisco's new focus on software and managing subscriptions plays into an expertise on which Softcat was built.
"Softcat has such a pedigree in selling software, so it's a good thing Cisco is putting more emphasis on this area. We've been doing CX and life cycle services for a long time as part of Microsoft enterprise agreements (EA). We're trying to help customers get value out of the agreements they're signing," he said.
"And that's really what Cisco's CX programme is about; how can they get value out of signing an EA and bringing that software together into one place."
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