Putting Partners at the Center of Cisco’s Cloud Strategy: New Specializations, Marketing Tools

Cloud Partner Program – First 12-Month Scorecard

Two partner summits ago, in 2011, Cisco first articulated its go-to-market (G2M) strategy in the cloud, what roles they saw partners playing there, and what can Cisco do to help partners evolve their business models and capture market share from the competition. Three different partner roles were established – Cloud Builders, Cloud Providers and Cloud Services Resellers. In the intervening period the program has gained significant traction within the partner community.

The Cloud Builder track was intended for system integration channel partners that were interested in developing product resale and professional services practices around the build out of both on-premise private clouds for customers and public clouds for service providers. Currently, there are approximately 135 Cloud Builders that have been fully ramped up, badged and validated on their competencies in all aspects of building Clouds, including servers, networking, storage, virtualization, cloud management and professional services.

Cloud Providers, on the other hand, are partners who make investments in their own datacenters in order to offer X as a service (XaaS). This is a different business model requiring higher upfront capital costs and supporting a recurring revenue stream. In support of this model are: infrastructure as a service, contact center service, hosted collaboration and telepresence branded as “Cisco Powered Cloud Services” with appropriate reference architectures as well as audits of the Cloud Providers’ process, policies and competencies in delivering enterprise class services to customers. Currently, there are 50 Cloud Providers offering over 70 different flavors of these services. Cisco, however, saw a much broader component of its channel partners interested in playing in the XaaS space and developed the Cloud Services Reseller tract to address that demand.

Cloud Services Resellers are partners with a valid resale, white label or agency relationship with a Cisco Cloud Provider Partner. The Cloud Services Reseller is complementary to the Cloud Provider track as it offers an additional route to market for the cloud provider.

There are two major components to the partner cloud market opportunity – the cloud infrastructure market focused on selling equipment and professional services to enterprises for on-premise private clouds and to cloud providers for the building out of public clouds and the XaaS market (e.g., virtual private cloud, SaaS, IaaS and PaaS). According to Cisco, the cloud infrastructure market stood at $47.0B in CY2011 and is forecast to grow to $112.1B in CY2015 for CAGR of 24 percent. The XaaS market, on the other hand, stood at $34.4B in CY2011 and is forecast to grow to $113.6B in CY2015 for CAGR of 35 percent. Given these circumstances, Cisco has been messaging its partners that it is critical for them to focus on both aspects of the cloud opportunity. They need a holistic cloud strategy and the cloud story that they can take to customers that addresses the private, public and hybrid cloud environments. In other words, cloud builders should be looking at becoming either a cloud provider or looking for the right partnering opportunities among the providers as a cloud services reseller. It’s in that context that Cisco has defined its cloud partner strategy and channel program with different tracks, requirements, enablements and different benefits to help partners speak to and service both sides of the cloud marketplace.

There’s another aspect to Cisco’s overall cloud strategy. Cisco does have a limited set of software solutions that are offered as a service, such as WebEx or Cisco Cloud Security, which used to be the IronPort platform. Cisco will continue to lead this go-to-market effort, through partners, for those SaaS solutions that they already have along with what they’re already doing to enable partners.

New Specialization and Marketing Tools

Since the 2011 introduction of the Cloud Partner Program, partner feedback has been for support along the following lines:

• Help us differentiate our offers in some concrete fashion in the marketplace.
  
  
• Help us engage with the Cisco’s sales teams in a more quantitative fashion.
  
  
• Help us market our services in a better fashion than we currently do.

The first step Cisco took in evolving its overall Cloud Channel Program structure was to evolve the Cloud Builder track. In that regard, a few weeks ago, Cisco announced its Master Cloud Builder Specialization that rewards channel partners who have proven capabilities to build and deploy cloud-ready integrated infrastructures using Cisco solutions and ecosystem partner cloud offerings across storage, virtualization, cloud management, virtual desktop and integrated infrastructure (Vblock, FlexPod, VIA-HDS).

Essentially, Cisco packaged all of the certifications associated with its datacenter product portfolio, the existing cloud builder designation and those competencies Cisco believes partners need in solutions like Vblock, FlexPod and VDI and laid on top of that the very formal Cisco programmatic specialization framework that calls for an on-site third-party audit to validate and authenticate that the partner has set up a successful cloud builder practice. The audit includes customer references, assessments of: how partners handle demand generation and proof of concept, demo labs capabilities, etc. The Master Cloud Builder Specialization conveys to the end users that these partners have a well-established and successful cloud practice that has been independently audited and validated. Any partner with a cloud builder designation has until the end of September, 2013 to accomplish that upgrade. At that time the cloud builder designation goes end-of-life.

What This Means to the Partners

The Master Cloud Builder Specialization offers Partners elite branding, deeper engagement with Cisco sales teams and the following financial incentives:

• Teaming Incentive Program Discount. Master Cloud Builder partners receive a higher priority in their engagement with Cisco sales teams on opportunities that the Cisco sales teams are working on in the areas of datacenter and on-prem cloud solutions. In support of this early engagement Master Cloud Builder Partners receive some price protection in the form of a five percent upfront TIP discount that other partners, who may potentially bid on that opportunity later in the game, do not get.
  
  
• Value Incentive Program Rebate. In addition to the existing VIP rebate that the partner currently has, Master Cloud Builder Partners will get an extra kicker for all of the datacenter SKUs sold that currently carry VIP rebates.

Partners also receive G2M support through the new Cloud Marketplace. The Cloud Marketplace is limited to Master Cloud Builder Partners and Cloud Provider Partners. Effectively, they get to build a partner-controlled micro-site on Cisco.com where they can post all of their cloud-relevant information, collateral and lead generation activities. 

Cisco will market the Cloud Marketplace as the one-stop shop where Cisco sales teams and customers should go when they are looking for cloud solutions in their regions. The formal Cisco marketing push will begin later in the year after more partners populate their micro-sites. The Marketplace will also serve Cloud Providers, offering XaaS, a venue where they can articulate what solutions and partnering opportunities – agency models, resale models, white label models, etc. – they have available as they look to recruit Cloud Services Resellers.

There are other G2M and enablement support benefits for Master Cloud Builder Partners related to incremental market development funding for lead generation and Collaborative Professional Services – Practice Accelerators. Collaborative Professional Services (CPS) is a portfolio of services that combines Cisco intellectual capital, engineering expertise and service automation to help partners profitably expand or build new professional services practices. Practice Accelerators embody Cisco Services best practices around new technologies or architectures that are shared to help partners design or expand a professional service practice.