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Newsletter Home > November, 2007
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Cisco Ponders WebEx Go-to-Market Options
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Cisco's WebEx acquisition poses new challenges for a company that has largely evolved its go-to-market strategy around hardware sales. No final program has yet been announced, but a pilot program currently under way is testing a channel program similar to a telecom agency model. The test involves 11 countries and fewer than 100 unified communications partners covering a variety of customer sizes and vertical markets. A final program available to all Cisco UC partners is expected to be available within a year.
The new model will represent trail blazing for the subsidiary as well as the parent company. Historically, WebEx has had about 80-85% of its revenues through direct sales, and the balance primarily through service providers working on a wholesale white label with time usage-based fees.
"With WebEx, part of our strategy is to bring stronger linkages and collaboration between our unified communications [CPE] solutions and the WebEx conferencing capabilities," explained Richard McLeod, Cisco director of Unified Communications Solutions. "One of the key reasons for the WebEx acquisition was to leverage the Cisco channel to expand, grow, and continue to deepen our solutions."
For the time being at least, it appears WebEx will remain a separate entity under the Cisco brand, much like Scientific Atlanta and Linksys. It will therefore have its own programs and processes independent of Cisco. Yet it stands to reason that those programs and policies will be at least compatible with those of the parent company, in the event that the branding decision should ever change. This strategy nonetheless leaves a number of options for the WebEx go-to-market strategy.
The pilot program envisions an agency model with a Cisco back end through which partners can pass through monthly billing and account tracking. Other variations may be developed to accommodate partners who decide the agency model does not provide sufficient account control.
The current pilot program focuses on technical training and sales training – especially around selling to cross-functional teams that may include, sales, marketing, human resources, and any other groups whose decision-makers may have a voice in a WebEx purchase decision.
McLeod summarized, "We're training them on key care-abouts, pain points, approaches to those decision-makers, how to cost-justify and propose this, and also how to leverage all the WebEx tools and capabilities."
Under the pilot, partners will get a commission, at the time of purchase, based on the number of users, the term of the contract, and other factors. A variation of Cisco's Opportunity Incentive Program is also anticipated as a means of encouraging proactive business development, but other components of the Cisco program will not necessarily be in effect.
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Cisco Capital Extends, Streamlines Leasing Program
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As part of an effort to help channel partners manage cash flow, Cisco Capital has extended its zero percent progress payments program for million dollar unified communications projects through July of next year. The progress payment period has also been extended from 120 days to 180 days, and the paperwork has also been streamlined, according to the company.
Using the "conserve i.t." program, a partner could save more than $70,000 in interest during a $2 million unified communications installation, based on a 10 percent interest rate during a 180 day deployment.
According to the company, nearly half of Cisco Capital's qualifying commercial unified communications transactions in FY'07 included progress payments. Part of the objective is to enable customers to make higher investments in technology but spreading out the payments over multiple quarters.
To help partners navigate the program, Cisco Capital also launched a channel partner website, which makes it easier for partners to access the available financing offers, tools, resources and training materials.
"Cisco Capital has invested in providing channel partners with the tools, training and programs to drive profitability and help accelerate technology adoption," said Maryann Von Seggern, director of worldwide channels development for Cisco Capital. Today's announcement is part of Cisco Capital's ongoing effort to deliver financing innovations for partner success."
For Easy Lease Commercial transactions, partners can create lease/finance quotes up to $250,000, auto-generate documentation up to $100,000, and pre-credit qualify customers up to $250,000.
Silver Lake and TPG Capital Complete Acquisition of Avaya
Silver Lake and TPG Capital have completed the acquisition of Avaya in a transaction valued at approximately $8.3 billion. Becoming a privately held company is expected to help Avaya to accelerate its strategy.
Under the terms of the merger agreement, which was adopted by Avaya's stockholders at a special meeting held on September 28, 2007, Avaya stockholders are entitled to receive $17.50 in cash, without interest and less any applicable withholding taxes, for each share of common stock they owned immediately prior to the effective time of the merger. Avaya common stock ceased trading on the NYSE before the commencement of trading on October 26, 2007 and will be delisted from the NYSE.
LG-Nortel Launches New Reseller Campaign Targeting SMB Market in Brazil
LG-Nortel, the LG Electronics and Nortel joint venture has announced a new reseller recruiting campaign targeted at the small-to-medium business (SMB) market in Brazil. Along with this campaign, sales efforts will be supported by investment in advertising across general media and specialized outlets within the country.
A training program will also be provided to the channels with the opportunity to learn more about the SMB product portfolio, such as LG-Nortel's ipLDK-60 and other Nortel voice and VoIP solutions that will be launched in the coming years.
Avaya Honors Key Partners
Avaya Inc. has announced that Verizon Business has been named the company's 2007 Alliance Partner of the Year based on revenue growth, performance and commitment to the sale of Avaya products and services.
The vendor also announced that CBTS has been named the 2007 Avaya Business Partner of the Year for North America, based on successful revenue growth and performance.
In addition to significant year-over-year revenue growth, the division of Cincinnati Bell also launched a new high-profile technology pavilion at the Great American Ball Park, home of the Cincinnati Reds. Built to resemble a riverboat perched above the ballpark, the Pavilion provides a unique space for display of the latest technology, product demonstrations and executive briefings. Avaya has agreed to serve as a premier sponsor of a new pavilion, with a permanent kiosk to showcase its industry-leading solutions.
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On The Other Hand - Cisco Wants to Help Channel Partners with Recruiting: A Double-Edged Sword?
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By: Ken Presti
One of the main topics at a recent channel analyst conference in Dublin involved plans to assist channel partners in recruiting and retaining top talent.
With ambitions to become a $50 billion company by 2010, Cisco has started at that end objective, looked backwards, and determined that partners focused on advanced technologies, services, and solution delivery might not also be able to apply adequate resources to finding the talent necessary to keep all the other balls in the air at the same time. They found that most partners simply don't have the infrastructure to systematically recruit talent. Therefore, it's very much in Cisco's best interest to help the partners.
The company has started a multi-theater, HR-focused approach to increasing productivity, accelerating training, and develop higher-quality hiring procedures that channel partners can adopt if they so choose. We should stress the voluntary aspect of this. Partners never like when vendors tell them how to run their businesses, regardless of who that vendor might be. So if Cisco partners feel they have this whole talent and recruitment thing nailed, they will not be forced to change their ways or adopt anything.
In addition to the development of best practices around these functions, Cisco also intends to share resumes it receives with participating channel partner, once issues around confidentiality can be resolved.
Quick assessment: I think there's a lot of good potential here, but I think Cisco needs to tread carefully. On the one hand, anything that helps partners deliver quality to the end user has got to be a good thing. On the other hand, I believe Cisco should avoid situations where they might be perceived as holding down prices for skilled experts. I'm sure there are people out there who would disagree with me. But if we live in a market where people get laid off to protect shareholder value, then those people who run that risk of getting laid off deserve to use those same market conditions to get paid what the market will bear.
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