Cisco’s Top 3 Priorities: Grow, Grow, Grow
Cisco Systems realizes some regional economies remain difficult, but the overall message at Cisco Partner Velocity — a conference in Paris — involves a return to growth. Here are some key economic and channel thoughts from Edison Peres, senior VP of worldwide channels at Cisco Systems. Plus, four steps partners can take to accelerate their businesses.
First, some high-level thoughts from Peres.
“When you’re in a deep recession a lot of mid to small partners that live on month to month or quarter to quarter realities, you can see as much as a 30 percent of a fall-off in terms of partners disappearing,” said Peres, “2009 was about survival and evolving to new consumption models.”
A prime example: Cisco saw 28 percent growth in the managed services market. “That consumption model clearly was becoming a desired model,” said Peres.
Another piece of good news: The number of VAR failures in the recession was fewer than Cisco’s worst-case fears. Also, the number of partners that put themselves up for sale was less than expected, said Peres. And profitability of VARs was up in 2009 vs. 2008, because solutions providers were really focused on cost controls.
“Depending on what market you’re in, the storm is subsiding,” said Peres. “There has been damage to partners. Accounts receivable for many partners has climbed from 45 days to 70 days in many cases.”
Still, economies are improving, asserted Peres. “We’re sending a signal to partners: Navigate carefully, but start to accelerate,” he said. “We’re making acquisitions and we’re starting to make hires. Partners should shift their mindset from survival to growth.”
Peres noted that Cisco Systems CEO John Chambers has three top priorities for the company: Grow, grow, grow.
Still, it’s important to keep that call for growth in proper perspective. Nobody is suggesting a return to dot-com growth periods. And Peres puts the call for growth in context. “You have to be investing into this recovery in areas of the opportunities and being proactive,” said Peres. “There’s this mode, a new headset, where it’s not about survival and protection mode. You have to invest into a growth mode and be proactive.”
Pursuing Growth
So, how can partners lift their revenues? Peres offered four recommendations:
1. Strengthen the foundation of your business: For instance get accounts receivable under control. Here, Cisco continues to offer credit lines to assist partner efforts, Peres says.
2. Capture competitive opportunities: Such as targeting Nortel and Avaya accounts. Also, Cisco is recommending VARs acquire weaker competitors and hire key talent. Here, Peres points to the Accelerate to Collaborate initiative.
3. Uncover customer demand: Target deferred projects as well as stimulus programs. Here, Peres notes Cisco’s commitment to 0% financing, easy leasing and the Velocity conference itself.
4. Expand your boundaries: 37 percent of partners are working with one another. Peres points to the Virtual Computing Environment coalition as a way to push new boundaries.
That’s all from Peres (for now). Nearly time for lunch. And The VAR Guy suspects Peres could use a break from an anonymous blogger’s endless questions…
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