A year after the launch of DNA Center — Cisco’s new software-defined network (SDN) architecture designed to enable “intent-based networking” — the company’s top Americas channel sales exec Rick Snyder has three words to the wise for partners: Engage, Enable and Evolve. 

Snyder referred to those “three E’s” when he gave the opening keynote during the company’s Partner Xperience track at this month’s Cisco Live conference in Orlando, Florida. While those are the key to growth, Snyder believes the company’s go-to-market strategy is in synch with its plan to usher customers into the world of SDN, application-centric and policy-driven networking. 

The rollout of DNA Center, based on Cisco’s Application Centric-Infrastructure (ACI), aims to play a key role in enabling business transformation. This new network architecture can automatically apply policies and configurations from the core to the edge. Built on a central network control plane and management platform, its new API-centric approach to networking requires solid software development and infrastructure integration capabilities from partners. 

Rick Snyder

Rick Snyder

During Cisco Live, where Cisco fleshed out its developer ecosystem, Snyder sat down with Channel Futures, where he explained what he’s been telling hundreds of partners over the past years and efforts they need to take to remain competitive moving forward. 

Channel Futures: How has your organization’s engagements changed over the past year since the intent-based initiatives were rolled out? 

Rick Snyder: When we look at intent-based marketing, a couple dynamics in the mix are really important. We want partners that can drive a software and adoption motion. We’re focused on helping our partners build software adoption practices with what we call, LAER, which stands for land, adopt expand and renew. Like Cisco, many of our partners traditionally have been focused on land and renew and now with the subscription-based model, we have to focus and make sure there is competency around adoption and expansion. We’ve been maniacally focused on helping our partners evolve and grow in that area.

CF: How so? 

RS: For example, we have our Lifecycle Advisor program, which is all about our partners building adoption practices, and we’ve helped partners in the Americas. Our goal is to have all of our key partners driving adoption. We’ve helped close to 80 partners now build adoption practices in the Americas as part of the adviser program. We launched it about 18 months ago now and it’s a wildly successful program. Those partners that are in the program get additional incentives for driving adoption. They deliver an adoption scope of work to us and they can receive very sizable bonuses. It’s a great incentive for them. And we’re also coaching and consulting with them on how those practices should be built. 

CF: How many partners do you want to ultimately have in the Lifecycle Adviser program? 

RS: My goal is that ultimately any Cisco Gold Partner should have these life cycle adoption practices. I think that any partner that is master-specialized in enterprise networking or collaboration or security should have a life cycle adoption practice. So, it’s going to be a couple of hundred partners probably when it’s all said and done. Our distributors will help us with the long-tail partners and the smaller two-tier partners there. I would say the number one thing has been driving that software adoption practice. I’d say the second piece is helping our partners become aware of the importance of application development on the Cisco platform. With the announcement that we have 500,000 registered developers on DevNet, we want our partners to all be developing applications using that. 

CF: What activity have partners taken to build or rev up their software development capabilities? 

RS: Some of our partners have acquired software development companies that have this capability and others have basically asked their engineering teams to actually grow into this capability or evolve into that capability. It’s a mixed bag but regardless, all of these partners need to think about their role with application development. 

CF: What role has your organization played in trying to get those numbers to where they are and presumably beyond? 

RS: We encourage them to get involved with DevNet. We help them understand the business model to drive it. We them to DevNet and that capability. That environment is unique. Partners have to want to do it right. They’ve got to have the capabilities and want to do it. 

CF: How challenging was it to get them to want to do it? 

RS: It’s a work in progress. Some of the partners really are into it and see the value. Some partners get it and it has become part of their secret sauce and their differentiation in their value proposition. And other partners are just kind of coming along but it’s all of the above. But at the end of the day I want all my master partners with a level of application development capability because it’s going to be so critical to enable the secure digital platform. 

CF: What are the implications for partners who continue to resist engaging with DevNet or in building strong software development competency? 

RS: Their value proposition will not be as strong as those partners that have it. I think their margins and their service margins will struggle. I think it’s critically important, a key element of differentiation. Partners can continue to exist without it, but they will still struggle with their margins and their profitability. 

CF: How key is that going to be as the Cisco Hybrid Cloud Platform for Google Cloud rolls out? 

RS: I think it plays hand in glove. If you think about the Google mindset and the ability to write an API and automate workloads and things of that nature, whether they’re in in a multicloud, hybrid cloud environment, like Google, or in strictly a private environment, that skill set is required. It’s a part of the recipe book for that for being successful. 

CF: What effect do you think that will have on incenting more enterprise customers to use Google Cloud? 

RS: It’s going to be key. The Google Cloud partnership can be can be game changing. And I think for Google, they have a partner in Cisco. And by extension, they have a partner in our ecosystem of partners who understand enterprise customers. They’re at the table with the CIO, the CTO and now at the line of business. And Google wants to be at that table. It’s interesting: They’re developing a massive sales force and channel presence in the United States. And you know we obviously are already there. So, I think we get great value from the Google relationship because of the cloud. They’re obviously a major participant in the cloud. It’s also important for enterprise customers because if you think about what Google’s best in the world at, it is bringing the simple interface to customers and enterprises want simple. 

CF: Now that you have announced the integration of Spark and WebEx Teams, what programs are you rolling out to address the WebEx and collaboration opportunity? 

RS: You’re going to continue to see incentives as with VIP, our Value Incentive Program. It’s our rebate program for incentives and we are starting to move incentives so that they’re more heavily involved around activating software and driving annuitized software. The incentives are shifting in that direction in the area of Lifecycle Advisor. If you’re a Lifecycle Advisor and you show the adoption of things like WebEx Teams, you can actually receive bonus incentives for that type of activity. Wendy Bahr [senior vice president of Cisco’s global channel organization]  and I along with the other members of the cross-functional partner team will look at how to drive incentives and the right programs through all of our architectures on an ongoing basis. So, the VIP programs run every six months. We look at our enablement programs on an annual basis. With everything we do, we’re really tied at the hip with the business units to make sure the partners are incented appropriately, they are enabled appropriately. And we’re going to do the same thing with WebEx teams and all the new stuff happening in collaboration. 

CF: With all these changes and certainly a push toward software, how much turnover do you anticipate and new partners coming in among your partner base over the next year or so? 

RS: I envision very little. When I meet with partners at Cisco Live, Partner Summit or one-on-ones, what they’re telling me is they get it. They get the whole movement towards the software motion. They applaud us for doing and they’re committed to doing it. They’re working through the operationalization of it, which can be a challenge because it is a different motion, it requires different skill sets and they’re leaning on us for consulting and advice there and we’re helping them. So, when I think about turnover, I don’t see it happening much because, look, we really are a partner-centric company. Ninety-two percent of all of our revenue in the Americas goes through our partner community. I really want all of our partners to evolve with us. And so, we’re looking at it as if they’re can come along with us on this journey. And we’ve moved the incentives there. 

CF: What are you finding as a common thread is the hardest part?

RS: Understanding the model. Making sure they get the skill set right. For example, the skill set of a customer success manager and what their roles are. These are typically what these folks who drive adoption are called. They have to understand how driving adoption is different from a sales motion. And by the way, how that’s different from something a service person would deliver, or an engineer would deliver. So, defining the skill set and roles for the customer success managers is probably something we spend the most time on.

CF: Are you satisfied with where the incentive are on your end in terms of bringing them into this model or do you think they still need to be tweaked?

RS: I think it’s going to continue to be an evolution. You’ve got to do it with the right level balance. If I move the incentives too fast into software adoption and the partners can’t keep up, it creates a profit gap. I don’t want that. I want the right level of incentive at the right time.

CF: Have you brought on new partners that have different types of business models or software capabilities?

RS: Some of our partners already have a background with software. It could be software with Microsoft or Oracle. Where we’re finding the most interesting growth in new partner types is really around our digital solution integrators [DSIs]. These guys are boutique consultants that that add complementary value to our more traditional partners. And typically, they’re in either a technology domain that could be big data, digital, security or compliance. And then many of them are also have expertise in verticals like health care or retail. We have onboarded 25 of these partner types. and they’re complementary to everything our traditional partners do. They don’t resell, but they add all this value. And in many cases, they fill gaps or perhaps the reseller community may be bringing expertise around a specific vertical. It could be bringing expertise in a specific technology suite. And it’s a pretty powerful solution when it comes together. And so, we’ve invested in the DSIs to help them on board with Cisco. 

CF: What are you doing to support the DSIs, and is it paying off? 

RS: We’ve done some funding with them so that they’re incented to go out and do proof of concepts around a specific vertical or a specific area of technology. And it’s been a huge growth driver for us. In our first year doing it, in FY17, we drove over $100 million of new pipeline through this program and we closed over $37 million of new business. In FY18 those numbers are roughly two-and-a-half times that. I don’t have the exact figures, but it’s been a wildly successful program. 

CF: How many DSIs would ultimately like to bring into this program? 

RS: I don’t know the answer. I want these to be super high quality and I don’t want the wrong ones there. Quantity is not as important. If I’ve got 25 to 30 in there, it could maybe be double in the Americas but I’m not really sure where it lands. What I do know is that their return on investment thus far and the receptivity from our traditional partners is off the charts. So, they all keep our keep evaluating it. And if I can get it to 200 and see the same ROI that would be great. 

CF: What other new initiatives have you added for partners that have paid off? 

RS: We rolled out our new Impact 1.0 training program a year ago, and Impact 2.0 rolled out at partner summit in November. Today we’ve trained over 2,500 partners sellers and the feedback is extraordinary. I’m getting 4.8 average scores [on a 1-5 scale] in these training sessions. We’ve actually commissioned our learning partners to deliver the training and I pay for half and the partner pays for half. Another asset is our Unique Value Proposition [UVP] workshops. I have a small consulting team that does nothing but work with the partners on how to improve their business and how to improve their business model. And it’s a true business orientation program that has very little to do with a specific technology or product. 

CF: How does that work? 

RS: My consulting team typically comes in and interviews lots of different people who work for the partner and then give feed back to them explaining here’s your unique value proposition. Here’s what you do different or better than any other partner out there. We’ve condensed that down to a five-hour TelePresence and we do some pre-interviews and the partner walks away with their unique value proposition. 

CF: How many partners have utilized the program? 

RS: We have 70 partners who have completed or are enrolled in these workshops currently. And so UVP is really important because it allows that partner to articulate to a sales guy at Cisco why they’re different, what they do better than the other guy. It also helps them with the customer, to tell the customer what’s different or better about what they do. We’re also training Cisco account managers on the partner models how they make money. We started doing that at right at the Partners Summit in November and we’ve trained about 2,000 account managers as of now.

CF: What effect have you seen from that? 

RS: We track our success via a survey process called the voice of the partner. We put out surveys quarterly; they’re pretty in-depth and the partners address them. We have seen a marked improvement in how we measure alignment and where we ask a bunch of different questions that asked basically how we’re doing as far as aligning with your field sales teams, how we’re doing with helping profitability. And when I look at it from the first half of FY17 to the first half of FY18 we’ve seen a fairly dramatic improvement in both profitability and in alignment which are really important for me personally. These are statements that it’s working profitability of the partner because now our sellers have empathy about their go-to-market model and how they make money. So, they’re working with them more collaboratively.

CF: To address channel conflict — or even perceived channel conflict? 

RS: Exactly. As a result of my one-on-ones, my voice of the partner feedback, the survey feedback and also the pre-event survey coming into the Partner Summit, I said to my team that we need to do some things differently because we were hearing that we needed to improve alignment. By improving alignment we’d also improve the partners’ profitability. And so, we built it. We started to develop these very specific training assets and enablement assets geared towards partner awareness and how the partner model works how partners make money. Part of the training also includes how to leverage our partner incentive programs so that the partners make the most margin transactions. And we were really surprised to learn what the field did and didn’t know about the partner incentives. So, we didn’t assume anything anymore. We developed a curriculum and it’s being consumed and we are seeing a marked improvement.

CF: How much improvement?

RS: We don’t publish the data externally, but I can tell you it is statistically orders of magnitude already in one-year improvement. I’m very happy. It’s still a work in progress but I’m very happy with the results so far.