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Cisco CEO Chambers vows channel commitment

Networking veteran insists market is improving for resellers

John Chambers, chief executive at networking giant Cisco, has insisted that the reseller and pure services channels dominate the company's business and will continue to do so.

Chambers told the Cisco Partner Summit in San Diego that the partner channels are "deeply embedded in the DNA" of the company and insisted that Cisco rarely serves customers direct - with a small number of the biggest clients being the exception.

At the event, Cisco announced a number of initiatives aimed at bolstering the channel, including a programme for companies serving small and medium sized businesses, and a dramatic simplification of dedicated services programmes.

Cisco said it was "making a shift in the vision", with a more extensive focus on how partners add business value, rather than focusing on profitability alone, and Chambers said the company was keen to reward partners adding this value.

The company is meanwhile focusing heavily, in terms of technology, on cloud computing, mobility and video.

There was a big change beginning in the economic environment for channel partners, with a notable improvement in their revenues and their profit opportunities compared to last year, Chambers said. A show of hands from the large audience appeared to mainly support that assertion.

But Chambers conceded some challenges over the complications partners experience dealing with Cisco. "We know at times we haven't been as easy to deal with as we'd like, and we're changing that, fast," he said.

Cisco had acted to "trim fat" in its management, and to become much faster moving and "more responsive" to the channel, he said.

The audience again agreed with Chambers that more needed to be done. He said the changes were being made and that in "12 to 18 months there will be the recognition".

The ever growing shift to services among resellers was reflected in their Cisco deals, he said. Many resellers now generate nearly half of their Cisco sales, and 50 to 70 percent of their profits from the vendors' offerings, from services.

Cisco has faced criticism that by growing its focus on services, it could end up competing with the channel. The company said it had invested "millions of dollars" in developing the services propositions, it said this was in the interests of partners, and added that it "would not compete" with the channel.

"We know that the differentiation and specialism we gain with the channel is vital to us reaching the market, and our focus is helping them deliver those services," said Chambers. "We are primarily a technology company."

Some 2,200 Cisco partners are attending the conference, from 90 countries. Businesses in a further 60 countries are tuning into its webcasts online.

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