Courting the Cisco crown

Verykios said Cisco presented mature, clean and successful channel programs in the past, some of which many vendors would be well served to imitate in concept.

“In just four years we have built a $60 plus million business at Distribution Central and we sell anything but Cisco and only in the advanced and emerging technology markets. It will double next year at worst,” he said.

“Cisco openly recognises the channel as its only way to leverage the larger end-user space available through mid to low-end opportunities as well as emerging and advanced technology markets. But someone needs to tell its distributors who are polarised in their focus on the larger enterprise opportunities and cleaner worldwide logistics. This is frustrating Cisco,” said Verykios.

“Cisco’s resellers get both sides of the sword. Resellers have been burnt by Cisco meddling in deals, playing “God” and the reseller ends up on the losing side. At the same time it’s an easy sell in traditional networking. The deal may not come at the best margin, but the cost of sale is pretty low. As a Cisco channel partner you learn quickly that you can’t have your cake and eat it too.”

Asked if he would ever work with Cisco, Verykios said he has spent considerable time as a Cisco partner and a Cisco competitor and believes it’s a very positive trip either way, for very different reasons. “From this stance, if I said anything other than yes [to working with Cisco], I’d be a bloody idiot.”

Jin at IDC, said: “For a company the size of Cisco, channel relationship management is difficult and political. You don’t stay number one across that many solution sets for such a long time without looking after your channels and making sure your channels are looking after you. That’s the business they are in and the numbers speak for themselves.”

It is easy for rivals and their partners to take potshots at Cisco. Being top of the pile, Cisco would expect nothing else.

However, David Peach, vendor channel manager at Cisco distributor Express Data, said: “We do not distribute any other networking vendors and we are experiencing continued year-on-year growth with Cisco. They seem to be performing.

“Nortel, Juniper and HP are some of the firms that our partners might come up against. Cisco’s growth is being driven by convergence as customers now need more bandwidth on their networks.”

Peach said Cisco is a channel-friendly organisation with a very mature indirect approach and a stable channel base.

“Cisco is not always chopping and changing its partners. Cisco partners can also specialise in certain areas and this enables them to play to their strengths. This specialisation process has enabled partners to move into areas where they can make more money,” said Peach.

Sheard at Cisco insisted that the main pillar of the vendor’s channel approach is having a mutually profitable relationship with partners.

“We look to get market coverage from the channel for the wide breadth of technology we have. We ensure that we drive margin growth, not just revenue growth, for our partners,” said Sheard. “At each stage of our development there have been competitors who have been strong, but they have fallen by the way.”

Ensuring that these competitors continue to “fall by the way” will be key to the future success of Cisco. The vendor has not reached its current stature without adopting an aggressive and innovative approach to the industry. Every established IT organisation in the world has its rivals, but few manage to keep them at the distance Cisco maintains.

Are Cisco’s rivals catching up? In the diverse networking space, they are certainly finding traction in certain areas. However they all have a long way to go before dents, rather than mere chips, are being made on the Cisco behemoth.

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