Many of our clients look to the channel programs of large vendors for leadership. Vendors like Microsoft, Cisco and IBM. Our ‘Four Minute Expert’ series is designed to get you up to speed with the structure of these key programs quickly and simply. In this ‘Four Minute Expert’ guide we’re looking at the Cisco program.
PROGRAM HISTORY
• The Cisco Channel Partner Program has historically had some criticism for its complexity. If this used to be justified, it’s not so much today. The core program is a simple three level program with specialisations, explained below.
• The Cisco Value Incentive Program (VIP) and Opportunity Incentive Program (OIP) are well known in the industry and can cause confusion. Put simply, VIP is a rebate program, and OIP is a deal registration program. More on this below.
• Major changes to the Cisco Channel Partner Program were announced in 2014, moving to three tiers from four by removing the Silver tier. Since then changes to the program have increased rewards for partners who achieve specialisations and who demonstrate customer success.
• There is a separate partner program for developers called the Cisco Solution Partner Program, and for MSP called the Cisco Cloud and Managed Service Program. There is also a Cisco Services Partner Program. Here we are focusing on the Cisco resell program, which is called the Cisco Channel Partner Program. Together these programs make up the Cisco partner ecosystem.
• Cisco has around 60,000 partners globally and around 85% of Cisco revenue flows through partner routes to market.
PROGRAM STRUCTURE
Partners must register their details to enrol in the program and to begin acquiring specialisations. The registered partner group, with no specialisations, is not a formally recognised program tier. Recognized tiers in the Cisco program are referred to as ‘Certifications’.
Tier one is ‘Select Certification’. This requires the partner to attain one Express Specialisation. There are a range of Express Specialisations including Networking, Security and Small Business, referred to as ‘Specialisation Tracks’. Each track requires that Sales and Technical exams are passed. Select Certified Partners can work towards the next tier, called ‘Premier Certification’.
Premier Certification requires one Advanced Specialisation and participation in the Customer Satisfaction program. It also requires the ability to sell and support ‘Hybrid IT Solutions’. Hybrid IT is a major theme in the Cisco program. It refers to the partner’s ability to deploy cloud solutions alongside on-premise. Without this capability partners cannot advance in the program.
The third tier is ‘Gold Certified’. This requires additional Advanced Architecture Specialisations and has revenue requirements. There is a Global Gold category for partners able to deliver services internationally. There are a few hundred Cisco Gold Certified partners worldwide, making it an elite group. Global Gold is even more elite.
INCENTIVE PROGRAMS
A key benefit of advancing in the Cisco program is access to Incentive Programs which offer front end discount and back end rebates.
The best-known Cisco Incentive Program is the Value Incentive Program (VIP), which offers back end rebates. It’s a major source of margin for Cisco partners. VIP runs in quarters or half years, and each evolution of the program is numbered, so for example VIP 35 ran earlier this year. Rebates are offered by solution category, and access to the rebates offered in VIP is dependent on program tier and specialisations. This means there is a close link between VIP and the core program.
The Cisco Opportunity Incentive Program (OIP) is a deal registration program that rewards partners for finding business with new customers. Again, program access is tied to level in the partner program. There are other incentive programs. For example, the Migration Incentive Program (MIP) rewards partners for migrating customers from legacy to advanced technologies.
The above Cisco Incentive Programs, and the Partner Specialisations explained in the previous section, are integral to the Cisco Channel Partner Program. They should not be regarded as standalone program offers.
STAND OUT FEATURES
In our view at Kovendi, the following features of the Cisco program stand out as models for other vendors, and are worth your attention:
• The requirement for Hybrid IT capabilities to progress in the program. This sends a clear message to aspiring Cisco partners regarding their future business model.
• Heavy focus on specialisations as a gateway to program tiers. Cisco is mapping out for partners how they might present their proposition to end customers.
• VIP as a core commercial benefit in the program. Margin is not tied directly to program tier, but is linked through VIP to priority Cisco solutions, and to partner capability.
As with all large vendor programs, the Cisco Channel Partner Program is sophisticated, offering a wide range of best practices for other vendors building out their partner models. At Kovendi we understand these best practices, and can help you apply them in your business. Contact us to find out more.