Why Cisco Is Embracing a Commission-Based Sales Model

Cisco channel leaders are framing the referral agent partner model as key to accessing down-market customers.

Cisco on Tuesday announced a new partnership with the tech solutions brokerage Telarus. The agreement followed an alliance Cisco signed with Intelisys last summer. Both agreements give partner firms an opportunity to sell Cisco Webex in a commission-based model. Although many suppliers have already been offering Cisco-based solutions to agents, many of the agents’ larger customers have been asking to interface more directly with Cisco. On the other hand, many of Cisco’s traditional VAR partners had been asking for a more cost-effective way to transact with smaller customers.

Cisco’s Kristyn Hogan

Cisco vice president of collaboration partner sales Kristyn Hogan said adopting the agent model expands the vendor’s sales footprint and gives customers more flexibility.

“This was an opportunity for us to unlock a whole new partner set and really listen to our customers on how, where and with whom they want to buy,” Hogan told Channel Futures.

Hogan said hybrid work has led to a larger set of customers that are looking for Cisco’s offering.

“It has really unlocked a much bigger market for Cisco, particularly Cisco collaboration,” Hogan told Channel Futures.

More specifically, Hogan said down-market customers, which Cisco doesn’t normally transact with, are more interested than ever. And agents could serve as a bridge to those customers.

“These are folks who have been talking to customers that historically we have not talked to. And these are customers who all have a need now more than ever for a hybrid work solution,” Hogan said.

Enter Agents

That leads to driver No. 2: expanding Cisco’s partner base. It’s not just expansion in terms of customer volume, but also expertise. Specifically, agents know how to sell subscription-based offerings.

“They are not new to this cloud, recurring-revenue road and have been living in this world in some cases long before we have been,” Hogan said.

Athenium’s Jolene Langford

Cisco CEO Chuck Robbins recently said the company was earning just over $3 billion in software subscriptions when he took the reigns in 2015. That number hit $12 billion in fiscal year 2021.

“I think this move reinforces what a lot of people already knew, which is that Cisco was a little slow to pivot away from the hardware business,” Jolene Langford, founder of Athenium Technology Group, told Channel Futures. She said one customer has requested Webex in the last five years.

Langford said she’s enthusiastic.

AireSpring’s Shane Speakman

“It’s always been a little unfair that VARs could sell Cisco and be agents. But pure-play agents like me couldn’t sell Cisco. So this levels the playing field.”

Telarus vice president of UCaaS Shane Speakman said agents will play a key role in helping Cisco penetrate the cloud communications market.

“They’re just not seeing the cloud adoption from some of their traditional channels, and they really see this channel as the future of cloud sales,” Speakman said in an interview with Channel Futures Tuesday.

However, many of these agents have been selling rival collaboration offerings over the last decade.

“The agent community has been selling against Webex for years,” said Kate Jaffe, who leads business development and strategic consulting for Helm Partners .”By making Webex a commissionable offering, Cisco now gets …