New Integrated Services Routers Open Door to More Revenues, Profits for Channel Partners

September 14, 2004

The path to profits for Cisco's channel partners is through advanced technologies, and Cisco Systems' new line of integrated services routers paves the way. Cisco's portfolio of integrated services routers--including the 1800, 2800, and 3800 Series routers--brings unprecedented communications capabilities to branch offices, as well as small and medium-sized business. No longer simply "boxes" for data transfer, these new routers support a wide-range of functions, from robust security to IP telephony, even business video. They turn the once rudimentary access router into a communications hub that can significantly reduce a business' operational cost while boosting productivity.

News@Cisco spoke with Cisco's Paul Mountford, senior vice president of Worldwide Channels, and Edison Peres, vice president of advanced and core technologies for Worldwide Channels, about the importance of Cisco's channel partners and how the new integrated services routers will help their businesses.

How important are Cisco's channel partners to the company's success in the routing market?

Paul Mountford: Our channel partners are absolutely critical to our success. If they don't succeed, we don't succeed. Currently more than 90 percent of our revenues flow through our channel partners. Our channel partners provide the critical implementation expertise and customer care required to deploy the most effective networking technologies for our mutual customers--the businesses and organizations that rely on Cisco equipment to run their communications systems. Our channel partners can offer our mutual customers horizontal market expertise, such as in routing, and vertical market expertise for such segments as financial services, government, and healthcare. Channel partners are an extension of our sales force, providing Cisco with an additional 200,000 representatives. We have over 2,700 Gold, Silver and Premier certified channel partners worldwide, all with extensive training and support capabilities for our technologies. With such an expansive and highly qualified sales force, our channel partners help us focus on what we do best: making quality networking hardware. And our new integrated services routers are a perfect illustration of the symbiosis enjoyed by Cisco and our channel partners. We've been able to develop the breakthrough technologies for these new routers but our channel partners will be the ones who will help assist our mutual customers implement these routers most appropriately and effectively for their businesses. Only by working together can we provide our customers both the technologies and support that they require.

How will the new integrated services routers create new sales and revenue opportunities?

Paul Mountford: We believe the new integrated services routers will help Cisco's channel partners generate more revenues, increase profits, build customer loyalty, and differentiate themselves from competitors. The routers make it far easier for Cisco's channel partners to provide our mutual customers advanced communications options, particularly IP telephony and security services. Such capabilities will help them recruit new customers looking for more value from their networking investments. The ability to offer data, voice, security, and even video on one platform will help our channel partners stand above their competitors. No other company offers access routers with such broad capabilities.

What programs, tools and incentives is Cisco providing to channel partners to help them successfully support the new integrated services routers?

Edison Peres: We started our support program for the integrated services routers by introducing our channel partners to the new platforms. We unveiled the new routers in an all day Cisco partner event and have created a virtual lab, which channel partners-regardless of their location-can use to demo the new products. Also, we will be traveling to 100 cities across the globe to educate our partners about these new platforms. In addition, we have updated existing channel programs to reflect the new routing platforms such as the Cisco Opportunity Incentive Program (OIP), the Cisco Value Incentive Program (VIP) and the Cisco Technology Migration Program (CTMP). OIP rewards channel partners who actively identify, develop and win new customers in targeted market segments. This program has been expanded to reward partners for identifying and registering prospects for the new integrated services routers. VIP is a comprehensive reward program, originally created to help enhance the margins of our channel partners who build expertise in advanced technologies such as security and IP communications. To support our channel partners during the transition to the new routing portfolio, we have launched the VIP-New Infrastructure program, which provides additional rewards to our channel partners when they migrate their customers to the integrated services routers. We have also included the integrated services routers into CTMP, our existing end-user, trade-in program, so channel partners can help customers exchange older routers for a credit to purchase the new routers. Lastly, we have updated many of our existing program tools, including our Partner eLearning Connection as well as several specialization programs, to support the new routers.

Why is Cisco expanding the Value Incentive Program to include the new routing platforms?

Edison Peres: The goal of VIP is to help our channel partners develop the skills and expertise necessary to support advanced technologies such as IP telephony and security. The integrated services routers will make it far easier and more cost effective for businesses to use these technologies. So it is only logical that we would include these new routers in VIP. The more knowledgeable our channel partners are about these routers and the more actively they educate our customers about these routers, the better they will be able to provide the IP telephony, security and other advanced communications options the routers make possible. That will not only benefit them but will also be a boon to our mutual customers.

What kind of an investment will channel partners need to make to deploy the new routing platforms?

Edison Peres: The new integrated services routers are a natural progression of our channel partners' skills and expertise. Since we are integrating voice and security into familiar technologies, the transition for our channel partners will be simple--both in terms of their education about the products and the financial investments they will need for supporting the products. For those that are not experienced in selling IP telephony or security, this platform provides a new opportunity for expanding their business into these market segments. Of course, our channel partners are not expected to go it alone. As I mentioned, Cisco is making significant investments in the programs and tools that will help our channel partners get up to speed on the new integrated services routers as quickly and as easily as possible.