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Despite praise for Cisco’s departing channel exec, the company’s accelerating shift to cloud, software-defined and application-centric infrastructure, portend changes in its go-to-market strategies.
August 21, 2018
By Jeffrey Schwartz
It appears Cisco worldwide channel chief Wendy Bahr decided to leave on a high note, announcing her departure just days after the company reported positive quarterly and year-end financial results.
The 18-year veteran of Cisco’s channel organization says she will leave the company once officials name a replacement. Cisco said it aims to do so before its annual Global Partner Summit in November. A company spokeswoman said Bahr decided to leave on her own.
“We respect Wendy’s decision to leave Cisco and want to thank her for 18 years of leadership at Cisco, most recently leading our Global Partner Organization,” according to a company statement. “Our partner community is one of our strongest assets and we are committed to their success and helping them evolve with Cisco’s transformation.”
Cisco’s Wendy Bahr
Bahr was among the IT’s most respected channel executives, and given Cisco’s strong performance this year and her long tenure, many are inclined to believe she decided now is a good time to move on to something new.
“Wendy is a legend that defined a lot of channel programs,” said Tom Clancy Jr., CEO of Valiant Technology, a New York-based MSP and Cisco partner. “The other players in the market followed in Cisco’s wake, for great margins and great events and attendance at industry events.”
One partner, who spoke on condition of anonymity because he works closely with Cisco, said the time is right for a change in channel leadership.
“Wendy was legendary, but Cisco isn’t the same as it was 20 years ago,” the partner said. “Changing of strategy and massive changes in all the organizations is good. Old dogs, new tricks.”
Surinder Brar, who spent 15 years as a Cisco channel executive until 2015 and is now an independent consultant who advises technology companies on their partnering strategies, agreed.
Here’s our list of channel people on the move in July.
“I think Cisco’s business model is going through a major transformation and leadership changes are inevitable under these circumstances,” Brar said. “The company’s reseller partners will continue to become less relevant as the market further transitions to cloud offers.”
Does that portend that Cisco will try to take more of its business direct? Clancy said he’s already encountered at least some attempts of that.
“Aggressive smart internal sales people [have called] on our customers,” he noted.
“Cisco still needs partners, but instead of the resale role, they need to play consulting and developer roles,” Brar said, adding that this a trend he often discusses. In a blog last December, Brar emphasized these changes.
“The legacy reseller partner model has folded and [been] replaced by software development and professional services to support cloud offerings,” Brar wrote. “Successful channel partners now focus in these areas along with typically offering full life-cycle managed services.”
On the surface, Cisco’s business has shown more growth than expected over the past year. In last week’s quarterly earnings report, the company pulled in $81 million more in revenue than expected. Revenue of $12.8 billion in the fourth quarter of its 2018 fiscal year rose 6 percent, with all key segments performing well. Infrastructure revenue topped $7.4 billion, posting a 7 percent year-over-year jump; the security business was up 12 percent, topping $627 million; and Cisco’s applications business rose 10 percent. The company also expects revenue for the next quarter to rise between 5 and 7 percent.
Yet to Brar’s point, Cisco’s business model is undergoing …
… a significant shift. The launch of Cisco’s DNA Center signals a move from its traditional networking model to a software-defined, API-centric infrastructure.
Does that mean new blood is needed from outside the company, or will a senior executive in Cisco’s channel organization, such as Rick Snyder, SVP for the company’s Americas Partner Organization, get the nod? While Clancy believes there’s a good chance someone could be promoted, it will likely depend on what the trend line looks like in Cisco’s 2018 annual report.
“Just basing my opinions on the 2017 annual report, I can say that certainly the past few years have had some troubling signs like shrinking top-line revenue and less earnings per share,” he said.
Gerri Elliot, Cisco’s executive VP and chief sales and marketing officer, will likely have a say in that decision. Elliot, Bahr’s boss, who came on board in April, is a seasoned tech executive who has served in leadership positions at IBM, Microsoft and Juniper Networks. The company said it’s not commenting beyond the statement it has issued.
Nonetheless, Bahr’s move comes with Cisco’s fortunes on the rise. Shares are up approximately 50 percent over the past year. Much of that credit of course goes to moves made by CEO Chuck Robbins, who analysts have praised for how he restructured the company’s engineering team, and stepping more aggressively into software-defined networking, cloud and application-centric infrastructure.
Bahr’s stewardship of Cisco’s channel has played a key role in how the company was held as a model for best practices in partnering. Bahr took over as senior vice president of the global partner organization after Bruce Klein’s short tenure. She followed in the footsteps of several Cisco channel chiefs who faced a variety of challenges throughout their tenures. For early Cisco chiefs, keeping up with runaway sales growth, massive product shortages and other channel initiatives dominated their focus.
After the dot-com bust in 2000, just when Bahr arrived after a decade at Verizon, Cisco’s channel leaders were consumed with reducing a bloated channel inventory, rampant price and margin erosion and, in some cases, partner insolvency. Then there was a near revolt of 2005.
At the time, many Cisco partners were losing money on the sale of Cisco goods. To buttress their margins, some turned to the gray market seeking to boost profits. Others vowed to walk away from Cisco altogether.
That’s when then-Cisco channel chief Paul Mountford approached the company’s executive management with an outlandish idea that few believed would get a green light. Mountford, who is now CEO of Riverbed, asked for more than $1 billion to be used specifically to give to partners after the sale of products.
The bold move was critical, Mounford pleaded, because the Cisco channel was in revolt. Recognizing that the channel was a strategic component of the company’s go-to-market strategy (it still accounts more than 85 percent of the company’s business) Cisco’s board of directors approved Mountford’s request for channel incentive funds — even though the money took directly from Cisco’s bottom line.
Instead of bouncing from opportunity to crisis and back, subsequent Cisco channel chiefs tried to stabilize the company’s programs over time. They invested more in …
… certification, specialization, enablement and rewards.
And they devised programs to help partners of every size, focus and strength make money from selling Cisco goods and services. Among those who perhaps made the greatest gains in this area was former senior vice president Keith Goodwin. Under Goodwin, Cisco became more predictable and consistent than before.
Bahr lived through all of that, spending her first decade at Cisco as SVP of channels covering the U.S. and Canada, according to her LinkedIn profile. In 2010, she took on a global role as SVP of Cisco’s Transformational Partner Organization, where she helped create partnerships with a newly created value-exchange model developed to serve both the company and its partners.
Two years later, Cisco tapped her as SVP of the company’s Americas partner organization, where she oversaw 700 employees and more than 23,000 partners. Three years ago, Bahr was promoted to lead Cisco’s Global Partner Organization.
Whoever takes over, has one of the most challenging jobs in the industry. Cisco, which along with Microsoft, boasts one of the largest and most active partner bases in the industry, pioneered or advanced many of the popular conventions that have become staples in almost all great programs today. These include:
The shift from “volume-based” programs to “value-based” programs.
Advanced certification training that was tied to partner program status.
After-market incentives and rewards given to partners that met specific targets.
Coordinated regional sales plans combined with quarterly partner sales reviews.
Company-support training academies situated throughout the world.
Cisco’s Robbins tweeted the news late Friday. “Special thanks to @wybahr for all of your great contributions to @Cisco. We will miss you but we wish you the best in all you do and we will always value our friendship!”
— Chuck Robbins (@ChuckRobbins) August 17, 2018
Yet until Cisco names Bahr’s replacement, some partners will be on edge, at least to some extent.
“I’m excited about the possibility of change,” Clancy said. “But of course, cautious that any new channel lead is going to look for a way to eke out a couple of extra points that will inevitably come out of the partners’ end.”
Channel Futures/Channel Partners staff contributed to this report.
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