June 15, 2022
CISCO LIVE – Cisco Systems is encouraging partners to come along with it in its software-based, as-a-service journey, and in some cases partners are leading the way.
Cisco executives continued to outline their vision for a software-centric future at Cisco Live in Las Vegas. Chairman and CEO Chuck Robbins said the company has evolved from simply selling hardware boxes years ago.
“When I took over [in 2015], basically we sold technology products, and customers bought them and integrated them. And now we have a $17-18 billion dollar run rate software business,” Robbins told journalists and analysts on Tuesday. “We have a solutions that have cloud management with a piece of hardware on-prem, on-prem license software and pure SaaS solutions. We’re trying to provide our customers exceptional choice, however they’re going to consume it.”
Cisco’s efforts to promote managed services among its partners are no secret. Robbins said that while some customers still prefer to be DIY in provisioning Cisco technology, the majority of them want more help.
“Most of our customers are sick and tired of being system integrators,” he said.
Shahid Ahmed, executive vice president of new ventures and innovation for Cisco partner NTT, agreed. He said he sees Cisco making a positive shift to cloud and software.
“Most customers are looking for that software-as-a-service, network-as-a-service and infrastructure-as-a-service model,” Ahmed told Channel Futures. “The things Cisco is working on makes sense and will align to what customers actually want.”
Robbins said Cisco channel partners differ in how well they are keeping up with the shift to software and services.
“As usual, there are a handful of partners that are racing ahead of us, and we’re working with them. There’s a large portion of our partners that will kind of move into second base as we push and work with them. And then there’s some that won’t make the transition,” he said.
Supply chain issues, which Cisco blamed in part for its latest quarterly earnings, loomed heavily over the conference.
Zeus Kerravala, founder and principal analyst at ZK Research, said the massive delays in shipments could lead partners to rethink their model.
“If you assume supply chain problems aren’t going away anytime soon, maybe you need to change the way you sell,” he told Channel Futures.
For example, perhaps their customers would pay a premium to receive a fast-tracked item if partners were skilled in quantifying how much they would benefit from having that product. That means having enough visibility into the customer environment to articulate the value of certain infrastructure upgrades.
“This supply chain shortage we’re in should force them to rethink how they go to market. You just can’t ask customers to buy the way they did before, pay more and wait,” he said.
The Cisco Live conference concludes Wednesday.
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