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Cisco to partners: What’s your business worth?

April 18, 2012
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Networking vendor looks to help partners focus on building their valuation

Edison Peres, Cisco's global channel chief

, Cisco's global channel chief

SAN DIEGO – Cisco partners know – and if they don’t, company staff from on down will remind them – that Cisco loves to measure things.

The company has made measurements of customer satisfaction key to its partner recognition programs, as a measure of the value solution providers bring to the company and their joint customers.

But now, it seems like Cisco is poised to provide partners with some tools by which to measure the networking giant, and the value it brings to its solution providers. Global channel chief Edison Peres used a good part of his keynote discussion at the company’s Partner Conference here to discuss the concept of “return on Cisco” and using its programs to help partners add to their own valuation.

“Our goal in addition to supporting your profitability … is we want to maximize your business value and optimize your return on Cisco,” Peres told partners at the event.

Peres described an expansion of the company’s existing “return on Cisco” mantra that would measure not only the profitability of partners working with the vendor, but also taking a look at how working with Cisco adds to a solution provider’s valuation.

In preparing for the effort, Peres said he had talked to a number of investors who had either acquired, or were in the process of acquiring, Cisco partners, about what had drawn the investors to those particular organizations. In doing so, he said he found four common factors: operating profits, the potential for growth, the business risk around the company, and the sustainability of the partner’s business model.

“These are four areas we believe we can influence,” Peres said, adding that future will be measured in terms of their ability to drive those specific metrics.

Peres called the shift the next evolution in Cisco’s approach to thinking about partner value, which has already shifted dramatically from product margins to relationship ROI. That said, Peres reassured partners that he was not tossing out the company’s focus on profitability, just adding the long-term view to its pictures.

“Our focus is on helping you build a strong, highly-valued business,” he said.

The change appears to be a directional shift in the spirit of the one made a decade ago by then-channel chief , when he announced that the company was going to shift the focus of its partner programs from rewarding partners for the volume they sell to rewarding partners for the volume they provide.

In the future, the company will orient its programs towards ways to boost the valuation of its partners. But what happens when it cannot do so, or when the policies, programs and procedures it uses with partners do just the opposite? , CEO of , muses on just that topic in a blog post from the event.

One prediction is the Cisco will find out that they inadvertently do things that actually take away from partner business value rather than enhance it. That would be a defining moment in the maturing of the relationship between Cisco and its partners.

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