Newsletter Home > August, 2007

• Nortel Rolls Out Two Specializations
• Cisco Revises Rules to Benefit Smaller Partners
• Industry News
• On The Other Hand - Reading the Tea Leaves: Should Linksys Go Away?

As part of its transition to a value-based channel program, Nortel Networks unveiled partner specializations for Services and Unified Communications. The company is doing an incremental transition to its new program, announcing a "plan of record" last month through which partners have advance notice on the changes afoot, but don’t have to comply with the new program until March of 2008, at which point additional incentives for qualities such as partner loyalty and targeted attach rates will also be in place.

This month, the focus was on the first two specializations in a series of six to ten specializations expected to be rolled out in the next year. "We want to evolve our channel program to better meet the needs of the partners, industry trends, and end customers," explained John Stasick, director, Nortel Channel Management and Development. "This program gives the channel partners a lot of options for differentiating themselves and growing their profitability."

As of next March, Nortel Premium partners will be required to secure one specialization, and Elite partners will be required to have two. The specializations basically constitute a seal of approval, at the channel organization level, for sales, technical and services expertise around a specific market, customer size, or solution set. Specializations are valid for one year and expire annually on the anniversary of issuance unless renewed by the partner 90 days prior to expiration.

Unified Communications
The Unified Communications specialization is geared toward planning, deployment and management of UC solutions across email, instant messaging, voice/video/data, and web conferencing, plus a special emphasis on business grade networking and telephony.

Requirements for the Unified Communications specialization are as follows:

• Communications Server 1000 Release 5.0 full-service accreditation
• Multimedia Communications Server 4.0 accreditation
• CallPilot Release 5.0 full service accreditation
• Development of a business plan
• 5 sales people, or 2% of the sales force (whichever is greater) must complete a three-part online training course
• Commitment to an internal deployment of a UC solution
• UC-capable demo and lab facilities
• Two design specialists
• Course: Engineering Nortel Converged Office (Planning & Design)
• Two support specialists
• Separate tracks for Installation/Commissioning and Database Administration

• CS 1000, MCS 5100, CallPilot, and 3rd party email
• CS 1000, MCS 5100 integrated with Lotus Notes or CallPilot integrated with Lotus Notes and 3rd party email
• CS 1000 integrated with Microsoft LCS2005/OCS2007 (or CS2100 integrated with Microsoft OCS2007), Microsoft Exchange 2007 UM, and Microsoft Outlook

Advanced Services Specialization
The Advanced Services specialization is designed to attract partners that own the infrastructure and resources for an end customer services franchise. Partners that achieve this specialization must have at least the minimum number of certified individuals for the product categories selected by the partner as their certification basis in the Partner Advantage program. The minimum service and operational metrics are as follows:

Characteristic	Premium	Elite
Installation	Required	Required
Staffed Tech Support	5x8	7x24
Level 1 & 2 Support	Required	Required
Emergency Coverage	7x24	7x24
First Response	4 hours (non-emergency) 30 minutes (emergency)	2 hours (non-emergency) 15 minutes (emergency)
Dispatch Capability	24 hours (non-emergency) 4 hours (emergency)	12 hours (non-emergency) 4 hours (emergency)
Call Tracking System	Computerized	Computerized
On-Site Assessment	Temporarily Waived	Temporarily Waived
Lab	Required	Required
Customer References	6	6

Cisco Revises Rules to Benefit Smaller Partners

Cisco has eased restrictions on its policies for advanced specializations in a move likely to benefit Premier (smaller) partners.

The change focuses on headcount requirements for trained engineers and sales personnel in situations where the same partner organization has more than one specialization. Until last month, an individual listed to satisfy the requirements of one advanced specialization typically could not also be used to satisfy the staffing requirements of another advanced specialization.

For example, if a given advanced specialization required two trained engineers, those same individuals could not later be associated with a second advanced specialization, and thereby qualify the channel organization for a popular rebate program (VIP) in both specializations.

"The original partner input was that they wanted to spread the capabilities across all their certified individuals," explained Surinder Brar, senior marketing director, Cisco Worldwide Channels. "To be a Gold partner you need 12 certified individuals. When we looked at how partners were deploying those individuals, they would have a few of them focused on all the specialization content, and even though they had other Cisco certified individuals on board, those people were not taking an active role in the advanced technologies and any of the advanced specializations. So we limited the amount of role sharing to encourage more participation among a wider range of certified individuals. Then we got feedback, mostly from smaller partners, who want to be able to do more specializations without having to add people."

Under the revised rule, each technical individual can fill roles in two advanced specializations, and each sales individual can fill roles in four. The rationale is that it’s valuable for a sales person to be able to understand multiple technologies and understand the content across multiple technologies. But the technical side requires a deeper level of training, and is therefore being limited to two.

The down side to "doubling up" is that multiple specializations could be put at risk if one key person leaves the channel company. Therefore, there will be a distinct need for cost/benefit analysis.

As for the requirements of the Cisco program, Brar describes them as follows: "To be Gold you need 12 certified individuals and four specific advanced specializations. To be Silver, you need six certified people and two specializations based on specific options. The impact (of the new policy) will be mostly felt at the Premier level, which requires only three certified individuals. So Premier in the past could only fill one specialization. Now they can have two specializations. Very few premiers have three specializations because by the time they’ve made that investment they’ve typically added people."

Industry News

Ingram Rolls Out Service Warranties for Channel
California-based distributor Ingram Micro announced its new Product Protection Plan, a suite of hardware services plans to support channel partners offering multi-vendor, on-site repair services for laptops, desktops, servers and peripherals.

The new service plans, which are offered in conjunction with Warranty Corporation of America (WaCA), include three-year, next-business-day service options and on-site customer care, as well as exclusive offerings for white-box and college campus resellers.

Through the program, Ingram Micro resellers can either become WaCA-authorized service providers and service customers directly, or they can use WaCA's nationwide network of authorized service providers and resell those services, which are available for both name brand and white box products.

Participating partners have the choice of three white-box services plans, including two 36-month, on-site plans with choice of next-business-day or same-day/four-hour service, as well a 12-month, on-site, next-business-day protection plan that offers coverage beginning upon expiration of the manufacturer warranty.

The plan also extends to U.S. education partners, with a specific services contract for college campus resellers that offers either a three-year or four-year break-fix and Accidental Damage from Handling (ADH) coverage for any laptop sold in university bookstores.

Motorola Appoints Jeremy Butt as Vice President of Enterprise Mobility Worldwide Channels
Motorola, Inc. named Jeremy Butt as vice president of Enterprise Mobility worldwide channels. Butt will oversee Motorola’s PartnerSelect channel program, and align new product and technology development with services and channel strategies for bringing enterprise mobility solutions to market.

In his previous role with Motorola, Butt helped build the current distribution program as leader of worldwide distribution for the enterprise mobility business. He also expanded the PartnerSelect distribution presence and developed strategic relationships with key distribution partners. Prior to his distribution management role, Butt was head of channel partner sales in EMEA where he led the implementation of PartnerSelect and raised program support.

Prior to joining Motorola, Butt was vice president, EMEA, for security vendor WatchGuard Technologies. Butt also spent nearly four years at Cisco Systems as a director of sales operations, EMEA distributors and resellers. Prior to Cisco Systems, he also spent several years as general manager of the European region for Hayes Microcomputer Products.

On The Other Hand - Reading the Tea Leaves: Should Linksys Go Away?

By: Ken Presti

The ongoing debate has resurfaced again. Uberpulse.com has published a video of John Chambers telling European press that "It will all come over time into a Cisco brand. The reason we kept the Linksys brand is because it was better known in the U.S. than even Cisco was for the consumer. As you go globally there’s very little advantage in that."

Does that mean the Linksys brand is definitely going away? Frankly, I’m not sure how to interpret the Chambers comment. I don’t know that it necessarily rules out the sub-branding strategy they’ve been talking about for months. On the other hand, Linksys is already being marketed as a sub-brand, and his statement clearly suggests he wants to do something else. The part about Linksys being stronger than Cisco’s brand – even among consumers -- I definitely can’t buy. Cisco seems like it’s fully penetrated the public awareness, even among civilians who can’t really explain what the company does. Internet stuff, right?

But that’s beside the point. The real question is, should the Linksys brand be dropped outright, since it’s clear that Cisco is driving the bus anyway? Gun to the head, yes or no? I’m going to predict yes, but it will be a long, indirect path that will leave the Linksys brand in place for a long time to come, and likely be second-guessed after the fact.

First there’s the huge difference in gross margins. By virtue of its low-end target market, the Linksys product lines will never be as profitable as the mainline Cisco offerings. So I believe management likes the ability to break-out those product lines in some expedient way, just in case the blended gross margins should ever truly threaten the stock price of The Mother Ship.

Secondly, channel partners like the idea of carrying a second brand. It’s basically the don’t-put-all-your-eggs-in-one-basket kind of wisdom combined with the desire to project at least an aura of vendor independence. Linksys did some research that said a large chunk of their channel carries a second brand, but there’s only a 5-7% overlap with Cisco. Obviously, they’re going to want that number to be a lot higher so they can better influence the routes-to-market, and dumping the Linksys brand won’t necessarily bring those partners into the fold. So Linksys will stay.

But over time, the Cisco and Linksys business functions will become increasingly intertwined. Expense control will pretty much dictate that the structures become unified. Somewhere along the line there will be a revenue hiccup and the budget knives will come out. Somebody will have the bright idea, "Why are we spending money on promoting a second brand? Besides, haven’t we been saying it’s all essentially one network? Let’s drink our KoolAid." To many it will seem like the next logical step. So Linksys will go.

Next, they’ll regret that. Because while the singular "human network" makes good sense from a perception and interoperability standpoint, it has very little to do with how products are sold and supported. Keeping my small business network running and keeping a large enterprise running require two very different levels of expertise, and the march of technology won’t change that.

The Linksys channel program is a slimmed-down version of the Cisco one, which has certifications, specializations, front-end discounts, back-end rebates, and a host of special programs and components designed to meet the needs of a wide range of customers and keep an even wider variety of channel partners on-board. Unifying the two structures won’t make matters less complicated – and it will be especially tough on the SMB partners. In the end, killing the Linksys brand will necessitate a level of Cisco product segmentation that the Linksys brand accomplishes in a much less distracting way. So while dropping the name might seem more efficient from a branding point of view, the move will cause substantial collateral damage to the go-to-market strategy.

Time will tell. Aside from the conjecture of a lot of people, (including my own), no one really knows how the Cisco/Linksys brand question will be resolved. I don’t even think Cisco has the course charted yet. But the decision is a big one, and will have far-reaching effects to the company’s SMB initiative.

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