Top 3 ways to sell managed services through Cisco

Customers now spending 2.3x more on managed services

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Cisco has called upon partners to embrace managed services through the deployment of security, SD-WAN and collaboration technologies.

The channel call to action - delivered during Cisco Partner Summit in Las Vegas - aligns with the vendor’s well-documented plans to transition into a more software-optimised business, with partners set to play a leading role.

Whether an established or aspiring managed service provider (MSP), Cisco is directing partners towards subscription revenue through three core product sets.

“We know that managed services is at the heart of delivering an outcome to the customer,” said Ruba Borno, vice president and general manager of managed services at Cisco. “Most of our partners are thinking about managed services and for those that have established practices, they are already reaping the rewards.”

Borno said customers are now spending 2.3x more on managed services delivered through the channel, representing an “attractive market” for value-added resellers assessing whether to make the transition.

According to data from Research and Markets, the global managed service market is expected to reach US$282 billion by 2023, up from $180.5 billion in 2018 at a growth rate of 9.3 per cent.

Key growth factors include the increasing dependence of organisations on IT assets to enhance business productivity, alongside demand for specialised MSPs.

“We want to help partners capitalise on this market and use managed services to enable key technology transitions for customers,” Borno added. “This is why we worked to design a managed services offering which kept partners in mind as our primary route to market.”

Following channel feedback, Borno said the offering is centred around four core principles, spanning profitability, simplicity, predictability and differentiation.

“Partners have to make money as a starting point,” she acknowledged. “Then it needs to be easy to explain the value to customers, alongside being easy to transact and do business with Cisco.

“Also, partners don’t want to be surprised, they want to know our roadmap and plan ahead accordingly. Finally, our offering has to align with the unique DNA of our partners, allowing room for differentiation on top of the standard products we provide. Partners understand the business environment of a customer, the context of technology transformation and how to enable change.”

Security

Citing $32.2 billion in market potential, Borno pointed partners to managed detection and response, billed as the “fastest growing segment” of the security market.

“This area of the market is growing at 14 per cent,” she said. “This represents a resell opportunity for partners and provides access to the talent in the Cisco team.

“Through managed services, partners can protect customers across cloud, endpoint and network technologies. We can also help partners through marketing support, lead-generation and go-to-market activities.”

Global spending on security-related hardware, software and services is forecast to reach $103.1 billion in 2019, representing an increase of 9.4 per cent over 2018.

According to IDC findings, managed security services will represent the largest technology category with customers investing more than $21 billion for around-the-clock monitoring and management of security operations centres.

Next up is network security hardware, which includes unified threat management, firewalls and intrusion detection and prevention technologies. The third and fourth largest investment categories will be integration services and endpoint security software.

SD-WAN

Delving deeper, Borno said the “overwhelming majority” of customers plan to make a decision on SD-WAN deployments within the next two years. Such user appetite and intention places partners in pole position to capitalise through resell and white label opportunities.

“How can partners help customers make this decision?” Borno asked. “Within this, two out of three customers are expected to deploy a managed SD-WAN offering, providing options for partners to take to market today.”

According to IDC, the wider enterprise networking market will grow at 30.8 per cent per year until 2023, reaching a market potential of $5.25 billion.

“SD-WAN continues to be one of the fastest-growing segments of the network infrastructure market, driven by a variety of factors,” said Rohit Mehra, vice president of network infrastructure, IDC. “First, traditional enterprise WANs are increasingly not meeting the needs of today's modern digital businesses, especially as it relates to supporting software-as-a-service apps and multi- and hybrid-cloud usage.

“Second, enterprises are interested in easier management of multiple connection types across their WAN to improve application performance and end-user experience.”

Collaboration

Meanwhile, Borno also outlined the potential of growth through selling services related to unified communications, specifically the vendor’s Unified Communication Manager (UCM) cloud solution.

“Customers are struggling with ageing collaboration infrastructure and software, as well as patch and vulnerability management,” Borno added. “They are also asking to shift spend from CAPEX to OPEX, creating an opportunity to refresh infrastructure and bridge customers to the cloud.

“Partners with their own practice can use these offers to augment their portfolios and for those thinking about managed services, this represents an accelerant to market.”

From an Asia Pacific availability standpoint, Borno said that managed detection and response offerings will be available from March 2020, UCM Cloud by January 2020 and secure SD-WAN by June 2020.