Setting a hectic pace

It’s been a big year for Cisco in more ways than one. Across its global operations, the networking powerhouse was, like many of its peers, hit pretty hard by the economic downturn.

Globally, its net income fell nearly 24 per cent from the previous year on sales that were down almost 9 per cent. For the 2009 fiscal year ended July 25, Cisco earned $US6.1 billion, or $US1.05 per share, on net sales of $US36.1 billion.

On the human side of things, the vendor also announced it would be cutting hundreds of staff as part of efforts to trim costs to combat the economic downturn; this included its Australian workforce.

And the dramatic fall of the Aussie dollar – which dropped by up to 25 per cent in the space of six months – forced Cisco to up its prices on all products by 18 per cent at the end of 2008.

But the negative sentiment creeping out of the global economic crisis is only a fraction of the story. At the same time, there has been a steady stream of new and positive developments, particularly from a channel perspective.

Kicking off the good news element was the launching of a new small business group and range of products as part of efforts to grow its presence in the sub-100 customer segment.

Cisco invested $US100 million into building up small business marketing, services, product and staff capabilities and established a new Small Business Technology Group (SBTG) with dedicated headcount.

Then the vendor put together a new go-to-market program to facilitate partner-to-partner collaboration worldwide, called Global Resale Agent. The model allows partners to locate an agent partner from another geography to provide customer installation services on their behalf.

And the developments kept coming: Cisco announced Michael Lehmann would take on the role of partner operations director vacated mid-year by Jeff Sheard; it launched the Cisco Consumer Channel Network (CCN) to provide resellers with benefits and incentives around the Linksys by Cisco range; it unveiled plans to buy Pure Digital Technologies, the maker of the popular Flip Video handheld camera, for $US590 million in stock; CEO, John Chambers, took the wrappers off a new "unified computing" initiative which included a blade server code-named California; it upped the ante with a new top certification in the Cisco Certified Architect; it revamped its managed services program and launched new financing and rebate offerings; and launched a datacentre partner program and individual certifications.

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To top it all off, Cisco took the crown off HP for ARN’s Channel Choice Vendor of the Year in 2009.

“We are incredibly honoured to be recognised for what we think has been a lot of good work that we have focused on,” Cisco SMB director, Sara Adams, said. “We spent a lot of time in the last year really listening to our channel and the fact we get recognised for that is a huge honour.”

Along with all the big moves made this year, the vendor also does all the standard surveys and talks to its distribution partners, who of course, in turn talk to the reseller partners on a regular basis.

“We have channel account managers who have ongoing relationships on a daily, weekly, monthly basis with our partners and it is all used to come up with out longer-term strategies,” Adams said. This, along with aiming to maintain a diverse channel base, has been a factor in the vendor’s success, but so too have been the decisions to introduce new technologies like the Unified Computing System (UCS) and new programs and certifications.

“We have got some new technologies like UCS which require some specialist skills but we are also launching into small and medium business, which require some different skill sets from partners and different product sets,” Adams said. “We have learnt to embrace a diverse channel and are really looking to get coverage across all the key areas that customers want to interact with Cisco.

“We’ve also put in some support mechanisms. We have a separate dedicated small business support centre for resellers to be able to access to really look at the products they are selling to get the appropriate level of support they need for it.”

The big question now is will Cisco continue its hectic pace going forward? Adam’s message is telling.

“We will have a continued push around making Cisco easier to do business with and that ties back to the diversity of our channel. We will really be trying to work more into the types of partners we have and how best to service them and work with them for their growth and our growth mutually,” Adams said. “I think as technology keeps changing it is working on increasing the partners skill and knowledge.”