Cisco Global Channel Chief Tuszik Moves To Modernize Programs, Add Incentives

Cisco Systems' new Global Channel Chief, Oliver Tuszik, is wasting no time reshaping the networking giant's partner programs around software, life-cycle management and recurring revenue strategies.

Cisco at its Partner Summit event in Las Vegas Wednesday teased a host of new incentives and specializations it plans to launch later in the year, including a simplified structure for recurring revenue and a handful of adjustments and new bonuses within its Value Incentive Program (VIP).

Tuszik is trying to strike a balance between the need to propel partners into a new, software and recurring revenue world while acknowledging the importance of maintaining and developing traditional businesses and strategies.

The changes Tuszik is proposing for Cisco's channel programs are spread throughout the year to give the company and its partners time to adjust to new selling strategies and markets, Tuszik said.

"We're saying, ‘Hey partners, we're together on a journey and we'll need to lead together and for the next 12 months you can do your business the way you've done in the past and for those 12 months we'll give you support for learning new capabilities,’" Tuszik said.

Tuszik is aiming to put changes place by the end of that 12-month period, however. In the meantime, he expects Cisco's partner base to help drive those changes as they're developed.

"We'll tell [partners] next year at Partner Summit that we've switched to the new model," Tuszik said. "Normally we say 'next quarter,' or even worse, 'next month' VIP is changing this way or this way. Now, we're saying we've got to change it. We don't have a final answer because we're working with you and we're talking to hundreds of partners right now to understand the best way to drive it. There's no doubt we're going to drive the change, but we're going to do it together. Over the next 12 months, you'll see a lot of changes, but the changes will allow you to conduct [your business] and will not harm your existing business."

A new Business Specialization and an updated Architecture Specialization will be among the first changes to take hold. The specializations are intended to help partners recognize and take advantage of business in previously untapped areas in hardware and software with a strong emphasis on life-cycle services.

A new Customer Experience Specialization also is on the way in July 2019. The specialization builds on the company's Lifecycle Advisor program and keeps its existing incentives in place while developing additional incentives in the next fiscal year.

Partners going for the Customer Experience Specialization will take an online assessment and Cisco will design a step-by-step plan to help the partner build its customer success practice and develop new strategies.

Cisco will then present partners with products that allow them to expand their customer success practices while giving them opportunities for additional incentives.

Tuszik's organization is also aiming to integrate a recurring revenue-based portfolio into a simplified incentive structure with an emphasis on services.

As part of that effort, the company intends to transition its services-related incentives to an annuity-based model that measures partners on monthly recurring revenue, growth and renewals in order to better align services and software incentives.

The effort moves services away from a performance-based incentive to a recurring revenue strategy that the company said will be more predictable while developing an annuity-based services portfolio, paying partners for monthly recurring revenue and paying bonuses for deal expansion and renewal.

Cisco is also making several updates to its VIP, including the addition of a Master Networking bonus; a DNA Center Activation Accelerator bonus planned for the second and third quarter of the 2019 fiscal year; simplification of the Activation Proof of Purchase requirements for DNA Center; continuing Activation eligibility for nine months after the VIP period ends; and potentially add new offerings to the VIP Activation portfolio to accelerate key data center solutions.

Ben Johnson, CEO of Liberty Technology, a Griffin, Ga., solution provider that works extensively with Cisco, said the changes mesh well with practices that MSPs have been using to sell software and services for years.

Johnson said he's especially eager to see the evolution of the Lifecycle Advisor program. "It seems like it's being formalized into a true specialization, which I'm super happy about," Johnson said. "Every MSP in the world has a life-cycle practice already. Partners like myself are born into doing that.

"Cisco is coming down from the enterprise in a really smart way, shifting to software, shifting to recurring revenue, and we already know what to do," Johnson said. "We're already monetizing Lifecycle Advisor services. All of this stuff is like bread and butter to us, and it's what Cisco needs. The biggest challenge will be retraining the legacy partners and helping Cisco field sales understand monthly recurring revenue."

Faisal Bhutto, vice president of corporate strategy at Computex, a Houston-based solution provider that works with Cisco, said the effort to tilt partners toward life-cycle management could help separate the company from competitors.

"By creating these specializations, it's obvious Cisco wants to have distinction, and it gives [the program] more weight," Bhutto said. "People will want to get certified, get in the program. It makes us take it more seriously. I see this as a logical step."