Digital transformation across industry verticals has been paving way for Cisco and its partner ecosystem, in terms of business opportunities and growth. In an exclusive interaction with CRN India, B Raghavendran, Managing Director, Partner Organisation, Cisco India & SAARC, shares Cisco’s GTM strategy, expansion plans and more
How has been the recent journey of Cisco, amidst digital transformation taking place across industries?
Be it any sector, digitisation is playing a big role. Every organisation is looking at digitisation the way it makes sense to them. Some are thinking in terms of how can it help them drive competitive advantage, how it can drive them new revenue as well as how can it help them go into newer markets. While the government is thinking on how do they make citizens’ lives better and safe. That’s where partners play a big role, because partners need to change their strategy; they need to now become solution providers. It becomes more imperative for them to understand what is it that the customer is trying to accomplish.
From Cisco standpoint, we are moving from a hardware centric focus towards software and automation, driving more intelligence into every architecture and network that we are driving. We are focusing towards software subscription, recurring revenue and automation. Cisco is going through a transformation too, so it becomes imperative that we work with our partners and help them through this transformation, because finally for us partners are our primary route to market. If we go in a transition and we are not enabling them, we will not be able to exhibit our value proposition to the customer and deliver the technology the way we want it to be delivered.
In the area of partner enablement, we have rolled out the ‘Black Belt’ program, wherein we look at every aspect of a partner; right from pre-sales, implementation to post sales. The skillset that one requires in each of this is different. When the needs are different, the training needs to be different. We are certifying partner individuals in each of these areas and there are levels of certification that partners go through. At the end, partners get the Black Belt certification in that particular architecture.
Today in India, we have almost 200 partners registered in this program. We have close to 950 individuals who are certified. Close to 2000 were registered into this whole program. In terms of each and every architecture, we have more than 100 certified engineers in these architectures. We are incentivising partners to certify their individuals. Apart from going through the enablement process, we are giving them incentives to put people through this program.
Cisco Value Incentive Program (VIP) is about how to focus more towards the lifecycle of a customer. Rather than just selling the technology, it focuses on ensuring that you sold the technology, helped them to adopt the technology, then you expand and renew the entire lifecycle of the product. As we move forward into the year, the program will focus more on the lifecycle and the annuity part. The latest VIP program focuses more towards software annuity and subscription based businesses. The partners go ahead and build as practices, so that they talk to the customers more about the software subscription. This is where automation steps in, because our product portfolio is also enhancing. We now have a whole new range of CAT 9K’s which is around simplifying automation, and software.
From system integrators and resellers, our partner base has expanded to add ISVs to our whole ecosystem. We have large master system integrators, who look at large nation building projects; and we are partnering with them. Now we are looking at fueling our SPS channel. Today, most of the service providers are focusing on the enterprise market. We were trying to evaluate how do they monetise the infrastructural services that they have built for the SMBs and the enterprises. We are seeing how do we work along with that, to build managed services offerings along with them, along with their offerings and services.
We have programs that support the partners to build their practices and a more profitable business. Recently we announced the ecosystem partner program, which looks at the whole ISV ecosystem. These are partners who can influence resell of our products or create a stack along with the application that they have and provide a complete solution to the customer. But implementation happens through our system integrators.
In this age of digitisation, some of the scenarios are so complex that it is no more about just one organisation providing a solution. It is about a consortium of partners coming together and providing a solution to the customer. Our endeavor is to build that ecosystem of partnerships.
The business is moving towards software automation, annuity and subscription, and we want our partners to move towards that. Partners can play a big role using their services and skill sets to drive adoption, expansion and revenue. That is where the focus is. The programs are getting announced in these areas so that the partners can quickly adopt some of these skillsets that they need. They can build some of the skillsets within their organization, be hand-in-glove with Cisco when we go to market.
With the market transitioning to software-defined, AI and ML, will the reseller partners become less relevant?
Different solutions go to different sets of the marketplace. We have a whole pyramid of marketplace. We have large customers at the top, followed by mid-market customers, commercial customers. When you talk of becoming software defined as well as moving towards driving more automation, it is important to enable some of these partners to make the transition, because every reseller wants to move up the value chain. It becomes our responsibility to identify their capabilities and where they want their businesses to go. If the partner also feels that his capability is around reselling products, there is a segment of the marketplace for that as well. We will ensure that we focus on these partners and build their skillsets.
From an APJ and India perspective, we went through a process wherein we looked at partner transformation, under which we are looking at some of the larger partners who want to drive business transformation. They want to move towards software, driving utomation, and building offers for customers. Using our products and their skillsets, we are working along with them on building those offers. We are doing the whole business transformation exercise with them.
There are still a lot of partners who are focused on the data centre space or on the collaboration space; and want to keep focusing on these areas and build skillsets. We are doing practice development workshops with them, so that we can build more skillsets and create offers in that architecture – it is not about one-size-fits-all. Looking at the segmentation of the market and partners, we ensure that we give the right kind of enablement, support and transformation that we want them to go through so that we can work with them and help them move up the value chain. Resellers will still play a big role for us. Today, when we look at the whole commercial strategy, where we want to expand our customer base, our reseller channel will play a big role to drive the reach that we need across the country.
Our partners will be our primary route to the market. Even in India – barring one or two segments – we have almost over 90 per cent of business going through our partners. In certain segments of our marketplace like the commercial segment, 100 per cent of our business is done through them. We are a partner centric organisation.
With changes in market dynamics, do you expect partners to take on a consultant’s role, or they should play a developer’s role?
The expectation is in line with what they aspire. Partners need to see what is the value add that they bring on top of Cisco’s portfolio, so that they can differentiate themselves in the marketplace. It could be through services, consulting or through development. Our DevNet program allows us to build APIs on top of it, so that partners can build customisation for their customers. We want to ensure that partners build more developer skills, because the world is more towards the software side.
Amidst aggressive focus on software defined networking, cloud applications, central infrastructure, has there been some realignment in Cisco’s GTM strategy?
In terms of our GTM strategy, we identify partners who have the capabilities for software defined architecture and software defined networking. We are investing in them to build these capabilities. When we looked at our partner landscape, we looked at the partners who have these capabilities already built up. We work with them to build certain programs that they can take those to the marketplace.
We have also identified a set of partners who aspire to be there, so we invest in them, build their capabilities and take them to the marketplace. Like any other architecture that comes in, we started with our networking portfolio, added collaboration, followed by addition of data centre and security. In each of these areas, there were certain set of partners who have built capabilities across all these architectures. Similarly, when we came out with software-defined, we had discussions with other partners who want to build skill sets around our offerings.
Since Cisco already has a strong channel ecosystem, will there be further addition of partners as the company continues to grow?
In 2008, we didn’t have the ISV ecosystem and national SI partners. However, we did have the service provider partners. Over the years, we built that; 10 years ago, we just had two distributors, however, today we have four. Addition of new partners depends on whether we see a segment of the marketplace bringing in certain capabilities. If we have partners who can provide that capability to that marketplace, we will surely consider building that with our existing partner base as well. For instance, when we entered the IoT space, we saw a different set of partners. Hence, we built those partners further and brought them into the overall portfolio of our partnership.
Partner addition is an evolution, which includes considerations such as how we want to grow a market, certain new areas that we want to get into, certain new geographies that we want to get into or certain new technology areas. If there are niche partners who are quite successful in that space and can drive the differentiation for themselves and us in the marketplace, we would surely partner with them. We keep adding partners to drive our reach which could be in terms of geographies, newer markets, newer verticals or newer technologies.
What does the future hold for the traditional channel?
Some of our IoT partners or SI partners are focused in the areas of their expertise, but there is still a traditional technology involved there. Some of the partners are focused on IoT, and will continue to focus on that. But when it comes to traditional technology, they will partner with somebody else. We try to build this linkage too, with our existing partners as well as the new set of partners.
We have grown our business through our existing partners. However, we are talking to new partners in newer markets. Along with this, we are also expanding in the existing markets. When we go deeper into the enterprise space and driving automation, intelligence and augmenting their infrastructure for digitisation, our partners are the last players who step in and carry out the work.
When we are looking at growing business in the commercial space, and geting into newer geographies or newer markets, these are the partners or resellers who do business with us. Our existing partners are helping us increase the breadth of our portfolio. They are also helping the customers move up the value chain from a digitisation standpoint. Our new sets of partners are helping to grow a business in the newer markets. We also explore if a consortium can come into play in these markets. Our traditional market continues to grow and there are opportunities wherein we are expanding our portfolio. Traditional partners are also evolving their business models. As they evolve their business models, we see if those models help them to move into the newer markets.
Some of our traditional partners have expanded their portfolios, with collaboration, data centre, security, software and IoT. These partners are also stepping into automation, building their IPs on top of our overall offerings. Some of them are working with the ecosystem to put their applications onto the stack and integrating the whole thing and giving it to the customer.
Every partner plays a key role; and looking at the opportunity in the Indian and SAARC marketplace, we feel that there is an opportunity to join forces with every new partner, as well as the existing partners.
Being present in India for a long time, do you think there are still untapped geographies in the country?
In terms of new geographies, we look at newer cities. In some of these cities, we may already have a presence, but not adequately. In order to grow business in these cities, partners play a critical role. Earlier the large part of the business would come from Mumbai and Pune, but today it is also emerging from Nagpur, Nasik, and Kolhapur. We need to see how we can further penetrate into these cities through our partners. From our commercial strategy, we have clearly marked out how we want to expand. We are in the process evaluating how do we work with our distributors to drive those programs. We started our digital acceleration program around 10 years ago, with just three categories. Today, we have almost seven types of partners.
Under this program, we see how we can work with our distributors to onboard new partners. Initially, when we undertook this program, we had almost close to 600 registered partners, which has now expanded to almost 3,500. All these efforts are made along with our distributors. Our commercial team and the channel’s partner organisation work with our distributors to drive the business in those cities.
Has the company identified specific focus verticals in the India market?
Some of the prominent areas include the entire textile industry. This is followed by the auto ancillary industry in the Western region. Whereas, in the Northern region, the sports industry presents significant opportunities. Education, as a vertical, is prevalent across India. Having observed that, we have put up a strategy to see how do we go ahead and address the education vertical. We are looking at ecosystem partners who provide content and have been doing business with educational institutes. Manufacturing is one more focus area for us. In terms of our strategy our strategy going forward, we see manufacturing and education as newer verticals which are under-penetrated from Cisco standpoint.
What are the key thrust areas for Cisco in 2019 and ahead?
Our endeavor with the partners is to enable them through this transformation. We will be working closely with them to build the capabilities and skillsets, so that they can address business transformation or the digitisation that is happening in the marketplace. We will invest in them so that they can build capabilities around software subscription and recurring offers. Most importantly we will be looking at working with them, so that we can identify new areas of growth for us and drive business in the marketplace and differentiate ourselves in those marketplaces. The focus is around seeing that how do we help them transform and build in more capabilities, so that they can address business outcomes and business challenges. We want to help them build vertical capabilities and horizontal capabilities, for them to provide a solution to the customer.