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 Channel Futures

Best Practices


Cisco Advises Partners on Differentiation in Cloud Market

  • Written by DH Kass 1
  • July 6, 2012

With increasing frequency, several prominent vendors have gone to greater than usual lengths recently to detail for channel partners their view of how value-add, differentiation and profitability looks and plays in the cloud marketplace.

For example, Mark Hennessy, IBM’s (NYSE: IBM) new channel chief, has been talking up the vendor’s strategy to help partners “move to higher-value spaces to drive more value to their clients.” His context? The cloud and business analytics, naturally.

Along similar lines, Surinder Brar, Cisco Systems’ (NASDAQ: CSCO) Worldwide Partner Organization chief strategist, last month quietly outlined four points of differentiation and value-add for channel partners, framed around the notion that reselling cloud services differs greatly from selling on-premise equipment and thus requires a completely different value proposition.

“The more unique this differentiation, the higher is the partner margin on the transaction; and, the more relevant their proposed solution is for the customer, the higher is their probability of winning the order,” Brar wrote in a blog post.

  • Understanding the customer’s business tops Brar’s list for how partners can differentiate themselves in the new cloud era. “This has always been important but it is even more critical as a foundation for identifying and proposing cloud solutions,” he wrote. “Customers are expecting improved business agility when they move to the cloud, which requires a much deeper understanding of their functional processes by the partner.”
  • Picking the right cloud solution to sell also is important, Brar noted. “This is obviously based on the needs of the customer but is more difficult than selecting hardware for customer premise equipment based on speeds and feeds,” because the customer “wants to pay for the cloud solution over time through operating expense instead of capital expense.” An ongoing service level agreement (SLA) that reflects the performance of the service and the volume of usage is vital, he said. “Crafting the SLA and the payment terms can become a differentiation as the partner must match the proposal to the exact needs of the customer – not more and not less.”
  • Selecting the right cloud services supplier to represent is a significant partner differentiation point because it reflects the reseller’s “due diligence on the cloud offer itself, the provider of the offer and the supplier of the infrastructure,” said Brar.
  • Cloud-related professional services, Brar noted, is “perhaps the single largest area of differentiation and profitability for partners. “Moving to the cloud changes the economics and success metrics for IT investments, including how to evaluate the role of the IT function itself by the customer. Since the role of IT shifts from control of assets to coordinating their usage in the cloud environment, partners can now become a direct extension of the internal IT department at the customer site,” he wrote.

The net-net of Brar’s, and, by association, Cisco’s perspective on partner differentiation and adding value in the cloud era? First, understand your customer’s business; next, be smart about selecting the right cloud solution to meet their needs; third, be careful about finding the correct cloud supplier; and fourth, be services-oriented.

It seems so simple. Maybe that’s why Brar referred to his blueprint as a “return to basics.”

Reselling cloud services “provides an opportunity for partners to both reinvent their business model and create new differentiation for competitive advantage,” he said, noting that “few market transitions have had the potential to change the channel landscape as dramatically as is happening in the transition to cloud.”

We do, indeed, live in interesting times.

Tags: Cloud Service Providers Digital Service Providers MSPs VARs/SIs Best Practices Channel Programs Cloud Leadership Networking Sales & Marketing

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3 comments

  1. Avatar jo July 7, 2012 @ 1:56 am
    Reply

    V.I.P has performed some wonderful analysis and through this they have provided some compelling information, which has assisted me in the decision making process and now I have a better understanding of CSCO, check it out at, vippen nystocksite.com

  2. Avatar jimbo July 9, 2012 @ 9:31 pm
    Reply

    nice spam Jo….

  3. Avatar The VAR Guy July 10, 2012 @ 12:04 am
    Reply

    Jimbo: Sorry that spam comment slipped thru. The VAR Guy usually weeds it out. Or calls out the spammer — which you did! Thanks for reading and for patrolling our comment boards with us 😉
    -TVG

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