This is the third in a series of blogs that demonstrate the critical role that Cisco’s consulting groups are playing in transforming Cisco (my June 6 blog) from a box pusher into a solutions vendor, and in expanding into new, “adjacent markets” (my May 31 blog). This blog highlights a third role that Cisco’s increasingly strategic consulting groups play in the company’s growth strategy—enabling and helping the company’s partners to open new markets for Cisco technologies though the company’s build/package/scale model.

Cisco’s strategy for migrating technology services out to its partners is quite well understood. As I discussed in a 2008 report, “Cisco Services 3.0—Transforming Product Support into a Competitive Differentiator”, the company’s new generation of “Smart Services” will allow Cisco to sell services to customers that cannot be reached by the company’s direct sales force while simultaneously, helping Cisco’s partners diversify away from rapidly commoditizing maintenance services, into higher value-added diagnostic and planning services, and build more reliable annuity-based revenue streams. As I discuss in this blog, the company’s consulting services play an instrumental role in helping Cisco and its partners extend their current positions into new markets. Both initiatives, not coincidentally, will also help bind these partners even more closely to Cisco.

The Expanding Roles of Cisco Partners

Cisco is already a very partner-friendly company. For example, it distributes 100% of its SMB products and more than 80% of its enterprise products through partners and encourages and often brings channel partners into these accounts. It is doing the same with its newest support services. Cisco Smart Care Services, for example, is sold and delivered exclusively through partners to SMBs and it plans to provide some of its enterprise network-level offerings (which are just now being rolled out) to some of its most capable and sophisticated partners.

Partners will also play increasingly central roles in delivering Cisco consulting services—especially to smaller and mid-sized customers, but also to the company’s 500 largest, most strategic “Transformational Accounts—those customers with whom Cisco’s Advanced Services consulting group directly engages (see my June 6 blog).

Although most of Cisco ‘s partner relationships are intended to sell, implement and support large volumes of the company’s traditional products and services, the vendor increasingly sees partners as a critical vehicle for helping to launch new products and services into broad new markets and for capturing customers with whom Cisco has little experience or direct relationships. As I will examine in greater depth in future articles, the company is:

• Expanding its channel presence well beyond traditional networking partners to establish a presence in channels with deep experience and established customer bases in four particularly critical target markets (borderless networking, data center virtualization, collaboration and video);
• Recruiting and developing new engagement models with services (such as systems integrators), technology partners (such as ISVs) and influence (such as management consulting) partners, in addition to reseller partners; and
• Dramatically expanding its partner presence in emerging markets in general and BRIC countries in particular.

It is also changing what it looks for in partners and the ways in which it supports them. It has moved beyond its historical focus on attracting and rewarding partners that sell large volumes of products to add partners that can help the company build demand for new, increasingly sophisticated products and services and consistently architect and implement successful customer implementations.

The company, for example, now has more than 1,000 system integrator partners and a growing number of OEMs, such as SAP, who integrate Cisco collaboration software into their own products. It is now in the process of developing new programs that will create much deeper relationships with a relative handful (probably a few dozen worldwide) leading–edge partners that develop “big architectural plays around Transformational Accounts in transformational technologies (such as collaboration and virtualized data centers) and initiatives (including Smart Grid and Connected Real Estate). Meanwhile, Cisco has created a new strategic partner organization to identify and engage with new types of strategic influencer partners. Under this program, Cisco will indirectly engage with pure management consulting firms, such as McKinsey and Bain, who do not directly work with Cisco products or deliver Cisco-verified services.

The company is increasingly segmenting and rewarding partners on the basis of demonstrated skills, established market presence and industry expertise and has added new certification levels and requirements. Those partners that go through advanced training and demonstrate strong capabilities and commitments to Cisco offerings receive benefits including enhanced training, larger discounts, earlier access to sophisticated new products and services and priority access to leads. They are also more likely to be invited to partner with Advanced Services in leading-edge implementations in large accounts. The company will even work directly with a small number of particularly strategic partners to help them build new service practice models around key architectural focus areas.

But while Cisco is clearly committed to extending its build/package/scale model, it will release no new offering before its time. Rollouts of new consulting services, such as the collaboration services suite discussed in my May 31 post, will not occur until initial partners are fully trained and up to speed. Even then, additional authorizations will be controlled and selective to ensure that current channels are strong and profitable.

Launching and Supporting New Partner Consulting Services

Overall, the company’s Advanced Services group facilitates new partner consulting service roll-outs in three primary ways. It:

1. Develops, tests and codifies the intellectual property on which new partner consulting services, designs and methodologies are built;
2. Works with Cisco’s Advanced Services Education and Global Services Partners & Alliances team to create partner training and certification programs and with Cisco’s partner enablement team to to help key partners develop and optimize service practice models; and
3. Directly supports partner consulting projects by providing partners with the tools and skills required to deliver successful engagements.

Once partners are trained and certified to provide Cisco consulting services, Advanced Services can support the partners in a number of ways. For example, it often brings partners into Cisco-led engagements as sub-contractors or participates in partner-led projects as a sub or as a consultant. It can also help in those engagements where the partner wishes to be the only face to the customer, as by providing virtual access to remote Cisco experts. These background support services were recently enhanced through an expanded version of Cisco’s virtual partner support service, called “managed capacity release”, in which Advanced Services consultants help partners who have been trained and certified to deliver particularly sophisticated consulting services, such as those surrounding Cisco’s collaboration and virtual data center products.

So while Cisco’s Advanced Services group devotes much of its efforts to working directly with large, leading-edge customers, it also plays a central role in making these services available through the company’s large and growing partner base. It packages its consulting services in ways that make them accessible to third parties, helps deliver the methodologies for training these partners, brings them into corporate accounts and provides much of the go-to-market and technical support to help these partners succeed.

This may lead one to surmise that Advanced Services is effectively trying to put itself out of business by training partners to deliver the services that it developed. This is, to an extent, exactly what it is doing. While Advanced Services will continue to work directly with those 500 Transformational Accounts that require its help as well as other accounts involved with pre-chasm technologies, it will channel consulting projects to all other customers through partners and will also increasingly bring qualified partners into Transformational Account engagements. This will free Cisco’s own consultants to develop new services around new pre-chasm technologies and then, when the services and market are ready, package and roll these out to partners to drive scale in the market.

I will discuss Advanced Services role as partner enabler in more detail in future blogs.