Cisco business transformation_playbook

3,054 views

Published on

Published in: Technology, Business

Cisco business transformation_playbook

  1. 1. © 2013 Cisco and/or its affiliates. All rights reserved. 1Business TransformationPlaybookforCisco Cloud Services ResellersAn introduction to the Cisco Cloud ServicesReseller program and guidance on how totransform your business to take advantageof the Cisco Cloud opportunity.This playbook is intended for Cisco Partners that are in the process of making the transition to the cloud. Access to Cisco Connection Online (CCO) isrequired to use this playbook. If you are not currently a Cisco Partner, please click here.Marketing Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverview
  2. 2. © 2013 Cisco and/or its affiliates. All rights reserved. 2Partner Business TransformationUsing ThisPlaybookCloud PartnerProgramCloud ServicesResellerCloudProvidersCisco CloudStrategyWhat is included in this playbook?Are you a traditional Cisco Partner? Are you thinking about or have you recently added CloudServices to your portfolio but are still trying to make the necessary transformation in your businessmodel?The Partner Business Transformation playbook has been developed specifically with you in mind.As a valued Cisco Partner, we recognize that you need help in making the transition to this newbusiness model. The Business Transformation Playbook is intended to be a comprehensiveresource you can leverage to assist you in your journey to the cloud.We designed this playbook to provide you and your teams with the information and resources needed tosupport your business as you make the transition to cloud based solutions offeringsSolution & OpportunityUnderstand the market opportunity andCisco Powered Solutions offeringsServicesRecognize that your services will bedifferent in the Cloud environmentMarketingBe prepared to tell a slightly differentstory to a new set of buyersBusiness ModelIdentify the impacts that cloud solutionscan have on your bottom lineSalesIdentify key changes required in yoursales structure, sales model and salescompensation programsTools & ResourcesLearn how Cisco can help you make thetransition to becoming a Cloud ServicesResellerMarketing Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverview
  3. 3. © 2013 Cisco and/or its affiliates. All rights reserved. 3Partner Business TransformationUsing ThisPlaybookCloud PartnerProgramCloud ServicesResellerCloudProvidersCisco CloudStrategyEnable our Partners to Build, Provide, White-label & Resell Cisco Powered Cloud ServicesEnable Partners to build,provide, White-label & resellprivate, public or hybridcloudsSolutions for Building &Providing CloudsAccelerating TTM, reducingcosts, driving growth andincreasing profitabilityLeverage Assets to DrivePartner LoyaltyRich Ecosystem ofIntegrated SolutionsDevelop & expand anecosystem to develop,deliver & enhance CPServicesResearch In MotionSAMSUNGEnable Partners toaccelerate this transition tonew business modelsDevelop Awareness,Preference & Demand forCP SolutionsWANWebexUsersMarketing Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverview
  4. 4. © 2013 Cisco and/or its affiliates. All rights reserved. 4Partner Business TransformationUsing ThisPlaybookCloud PartnerProgramCloud ServicesResellerCloudProvidersCisco CloudStrategyThe Cisco® Cloud Partner Program defines Cisco’s partner-led, end-to-end cloud solution go-to-market strategy and is designed as asingle program with three tracks that map to the three primary business models in the cloud marketplace.The program is designed to be inclusive and has tracks for all Cisco partners regardless of their size, business model, or marketsegment focus. The program also uses partners’ existing investments in the certifications and specializations of both Cisco and theCisco technology partner ecosystem, thereby lowering the cost of entry.Manage and Sell Cisco-PoweredCloud Services toCustomersResell Providers’ Cisco-Powered CloudServices to CustomersBuild and SellCisco-Centric Cloudsto Customers and Cloud ProvidersCloud Builder Partner Programs Link Cloud Provider Partner Programs Link Cloud Reseller Partner Programs LinkCloudBuilderCloudProviderCloudServicesResellerMarketing Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverview
  5. 5. © 2013 Cisco and/or its affiliates. All rights reserved. 5Partner Business TransformationUsing ThisPlaybookCloud PartnerProgramCloud ServicesResellerCloudProvidersCisco CloudStrategyThe Cisco Cloud Services Reseller program has been designed for Cisco Partners that are interested in reselling a Cisco PoweredCloud Service to their customers but are not interested in building their own service offering. Cisco Partners are encouraged toengage with the appropriate Cisco Cloud Providers that offer the services that meets the needs of your customers.For more information about the Cisco Cloud Services Reseller program click hereResell Providers’ Cisco-Powered CloudServices to CustomersCloudServicesResellerRequirements• Cisco Registered Partner• Valid Contract with Cisco CloudProvider• Dedicated cloud Customerrelationship managerBenefits• Cisco’s promotion of CloudServices Reseller designation• Cisco’s Cloud CompensationProgram• Demand generation marketing andenablement assetsMarketing Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverview
  6. 6. © 2013 Cisco and/or its affiliates. All rights reserved. 6Partner Business TransformationUsing ThisPlaybookCloud PartnerProgramCloud ServicesResellerCloudProvidersCisco CloudStrategyCisco PoweredXaaSDelivered by a Cisco Partner Cloud Provider,backed by Cisco and audited by independent3rd party to guarantee:• At least two existing customer references• An XaaS design based on Cisco Validated Design withmarket leading Cisco Nexus and UCS products• A documented Cloud Management framework in place• A documented QOS, security and reliability framework inplace• A documented SLA capability in placeFor a complete list of Cisco Cloud Providers click hereChoosing the right Cisco Cloud Provider is one the first steps in determining your cloud Go To Market Strategy. Cisco has workedclosely with a number of first class organizations that have built XaaS offerings based on Cisco technology.Marketing Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverview
  7. 7. © 2013 Cisco and/or its affiliates. All rights reserved. 7Partner Business TransformationCloud MarketOpportunityThe CiscoDifferenceCisco XaaSSolutionsConferencing andCollaboration aaS2013 – $6.23BPredominantlydelivered as a servicetodayHosted and aaSContact Center2014 – $1.97BOn-prem is $2.7Bmarket with 3.5%CAGRUnified Communications2015 – $14.5B17% of buyers wantUC delivered as aserviceSocial Softwarefor Business2016 – $6.4BProfessional Servicesis approx 1/3Source: 2012 Forester ResearchCustomers are considering cloud solutions now more than ever and at least 75% of all Solution Providers have or are consideringadding cloud solutions to their portfolio. The decision is no longer a question of “Should I offer a managed or Cloud Service”, butmore about which one(s) and how to effectively build a profitable “X as a Service” practice.Over the next four years, almost half of all CIOs expect to operate the majority of theirapplications and infrastructures via cloud technologies. Gartner, 2011Marketing Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverview
  8. 8. © 2013 Cisco and/or its affiliates. All rights reserved. 8Partner Business TransformationCloud MarketOpportunityThe CiscoDifferenceCisco XaaSSolutionsCloud Infrastructure andServices Spend isexpected to be almost30% of all IT Spend by20202010 2014 2020$61B $61B $61B4%8%27%Source: IDC Black Book 2012; SMO analysisMarketing Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverview
  9. 9. © 2013 Cisco and/or its affiliates. All rights reserved. 9Partner Business TransformationCloud MarketOpportunityThe CiscoDifferenceCisco XaaSSolutionsCisco Partners have atremendous opportunityto participate in marketsgrowing at greater than20% CAGRCloud Infrastructure ($B) Cloud Services ($B)CAGR(‘11-’15)24%CAGR(‘11-’15)35%26.26020.852.1CY2011 CY2015CloudProvidersPrivateEnterpriseCloud$47.0B$112.1 BCisco directlyaddresses 25% ofavailable market1351.714.752.14.914.91.810.3CY2011 CY2015Cisco directlyaddresses 5% ofavailable market$34.4B$113.6BPaaSIaaSSaaSVPCSource: Cisco SMO and multiple analyst dataMarketing Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverview
  10. 10. © 2013 Cisco and/or its affiliates. All rights reserved. 10Partner Business TransformationCloud MarketOpportunityThe CiscoDifferenceCisco XaaSSolutionsPARTNER | n= 107Base = All respondentsPlease specify which of the following infrastructureservices your organization delivered to customer(s) viaa public cloud based solution in 2011 as well as thoseprojected to be delivered via public cloud in 2013.• In the past 2 years, there hasbeen a growth in delivery ofnearly all types of infrastructureservices that are beingdelivered via public cloud• These services will continue togrow as the adoption of publicand private cloud continues tobecome more prevalent in workenvironmentsMarketBridge/IPED research shows that solutions providers are providing more and more applications and technology solutions tocustomer via a public cloud offerings each year. The cloud market has changed significantly over the past several years and solutionproviders expect that to continue for the near future.2%33%22%36%34%36%40%42%35%39%40%41%48%50%48%51%59%50%42%56%1%16%16%24%24%27%27%29%30%30%35%36%36%37%38%39%40%42%43%50%OtherPeripheral Mgmt ServicesPrinter MgmtWeb Traffic MgmtSecurity Mgmt: Remote EmailSecurity Mgmt: Connectivity SecurityStorage Mgmt: Storage InfrastructureSecurity Mgmt: Vulnerability & Patch MgmtSecurity Mgmt: Monitoring/ResponseStorage Mgmt: ArchivingVOIP ServicesEnterprise Application Mgmt ServicesStorage Mgmt: Business Continuity/Disaster RecoveryStorage Mgmts: Offsite StorageDesktop Application Mgmt ServicesNetwork/Infrastructure Management ServicesServer VirtualizationStorage Mgmt: Backup and RestoreHelp Desk/Call Center MgmtE-mail Mgmt20112013Marketing Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverview
  11. 11. © 2013 Cisco and/or its affiliates. All rights reserved. 11Partner Business TransformationCloud MarketOpportunityThe CiscoDifferenceCisco XaaSSolutionsCisco’s Powered Cloud Services allow you to deliver a full spectrum of XaaS offeringsHCS IaaS TPaaSHosted Collaboration Solution (HCS)is a package of collaboration productsfor Cisco partners who intend to delivertheir own branded UnifiedCommunications (UC) andCollaboration cloud service forenterprise organizations. Cisco HCSoffers a productized architecturalsolution accompanied by a commercialmodel and joint go-to-marketpartnership. HCS partner cloud offersinclude voice, video, messaging,IM/presence, mobility and webconferencing. Cisco Powered Servicedesignation. HCS certified partneroffers are eligible for Cisco CloudCompensation.Infrastructure as a service (IaaS) is astandardized, highly automated offering,where compute resources,complemented by storage andnetworking capabilities are owned andhosted by a service provider and offeredto customers on-demand. Customersare able to self-provision thisinfrastructure, using a Web-basedgraphical user interface that serves asan IT operations management consolefor the overall environment. API accessto the infrastructure may also be offeredas an option.TelePresence as a Service (TPaaS) isa Cloud-based TelePresence offerwhere the Provider has built theinfrastructure in their cloud and offers asa multi-tenant service to end users.TPaaS supports the CiscoTelePresence endpoint portfolio, andenables customers to leverage thecloud for call control, multipoint calling,and bridging, while providing reportingand SLAs. Cisco Powered Servicedesignation. TPaaS certified partneroffers are eligible for Cisco CloudCompensation.Marketing Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverview
  12. 12. © 2013 Cisco and/or its affiliates. All rights reserved. 12Partner Business TransformationCloud MarketOpportunityThe CiscoDifferenceCisco XaaSSolutionsCisco’s Hosted Collaboration Solution - HCSHosted Collaboration Solution (HCS)Hosted Collaboration Solution (HCS) is a package of collaboration products for Ciscopartners who intend to deliver their own branded Unified Communications (UC) andCollaboration cloud service for enterprise organizations.• A productized architectural solution accompanied by a commercial model and joint go-to-market partnership.• Includes voice, video, messaging, IM/presence, mobility and web conferencing.• Cisco Powered Service designation.• Eligible for Cisco Cloud Compensation.For more information about Cisco’s HCS solutions click hereMarketing Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverview
  13. 13. © 2013 Cisco and/or its affiliates. All rights reserved. 13Partner Business TransformationCloud MarketOpportunityThe CiscoDifferenceCisco XaaSSolutionsInfrastructure as a service (IaaS)Infrastructure as a service (IaaS) is a standardized, highly automated offering, wherecompute resources, complemented by storage and networking capabilities are owned andhosted by a service provider and offered to customers on-demand.• Customers are able to self-provision this infrastructure, using a Web-based graphicaluser interface that serves as an IT operations management console for the overallenvironment.• IaaS is the Cloud infrastructure that other applications ride on top of• API access to the infrastructure may also be offered as an option.• Cisco Powered Service Designation• Eligible for Cloud CompensationFor more information about Cisco’s IaaS solutions click hereCisco’s Infrastructure as a Service Solution - IaaSMarketing Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverview
  14. 14. © 2013 Cisco and/or its affiliates. All rights reserved. 14Partner Business TransformationCloud MarketOpportunityThe CiscoDifferenceCisco XaaSSolutionsCisco’s TelePresence as a Service Solution - TPaaSTelePresence as a Service (TPaaS) is a Cloud-based TelePresence offer where theProvider has built the infrastructure in their cloud and offers as a multi-tenant service toend users.• Supports the Cisco TelePresence endpoint portfolio, and enables customers to leveragethe cloud for call control, multipoint calling, and bridging, while providing reporting andSLAs.• Cisco Powered Service designation.• Eligible for Cisco Cloud Compensation.For more information about Cisco’s TPaaS solutions click hereCisco’s TelePresence as a Service Solution - TPaaSMarketing Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverview
  15. 15. © 2013 Cisco and/or its affiliates. All rights reserved. 15Partner Business TransformationCloud MarketOpportunityThe CiscoDifferenceCisco XaaSSolutionsCommodity Class CloudPerformance Commodity Best-in-Class Optimal IO BandwidthAvailability 99.9%-99.95%99.99%–99.999%*Application Through NetworkSecurityUsername/PasswordRole-Based AccessData EncryptionUsername/PasswordRole-Based AccessData EncryptionFW/IDSVLAN/PVLANPacket Capture, SPANData Leakage ProtectionNATComplianceMultitenant, Limited ControlOver Data HandlingMultitenant or Dedicated, Significant Control Over DataProcessing, Storage, TransportConnectivity InternetInternetVPNMPLS*Dedicated Connection*Storage Flat Tiered—up to 3Not All PublicIaaS OffersAre the SameMarketing Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverview
  16. 16. © 2013 Cisco and/or its affiliates. All rights reserved. 16Partner Business TransformationBusinessIntroductionDeal EconomicsBusinessOperationsPracticeEconomicsInvestmentsBusiness ModelWorksheetThe primary business reasons organizations like yours are adding a cloud or recurring revenue practice totheir business:Expand reach: This might mean selling to a new industry, new segments within your current targetcustomers, or to address new business needs within your existing customers.Generate more predictable revenue stream: One of the most attractive aspects of cloud offerings is thatsolution providers can develop a more predictable, recurring revenue stream. New service opportunitiesmight include assessments, integration and data migration services.Improve profitability: Cloud services allow solution providers to prospect customers outside their localgeography more easily, extending the reach of existing sales efforts. Recurring revenue streams can helpincrease margins and services attach rates.Reduce business risk: There is definitely an element of risk in making the cloud business transition; forone thing, it may take multiple cloud deals to generate the same revenue you previously could expectfrom a large project. But adding cloud services can help your organization create a more predictable cashflow, standardize product deliverables and make better use of existing intellectual property.Marketing Getting StartedBusinessModel Sales ServicesSolution &OpportunityTools &ResourcesCiscoOverview
  17. 17. © 2013 Cisco and/or its affiliates. All rights reserved. 17Partner Business TransformationBusinessIntroductionDeal EconomicsBusinessOperationsPracticeEconomicsInvestmentsBusiness ModelWorksheet“Best In Class” SolutionProviders that havetransformed their business toa cloud or recurring revenuemodel can generate overallgross margins of 45+%.Source: UBM Channel IPED StudyThe big picture for Cisco Partners is that the world is changing quickly. Cloud and services based solutions are here to stay andsuccessful solution providers are realizing that adding cloud and services based solutions to their portfolio can help them takeadvantage of a significant growth market.12-14% is the average grossmargin for solution providersin the product resale business.Source: UBM Channel IPED StudyTraditional resale is growing slower than Cloud markets• Maintaining desired gross margins for on premise product resale continues to bea challenge for many solution providers due in part to product commoditizationand slower growth• For some partners, supporting service margins are also declining becausesolutions are more intuitive and self-enabling• Cloud services are starting to displacing portions of the “product” market-spaceTwo primary growth paths exist for today’s partners• Cisco Partners that have limited professional services capabilities can first buildup basic professional services and managed service capabilities• Cisco Partners that have strong professional services, can shift a portion of theirbusiness toward recurring revenue businesses (managed services and XaaSoffers) to take advantage of market momentumMarketing Getting StartedBusinessModel Sales ServicesSolution &OpportunityTools &ResourcesCiscoOverview
  18. 18. © 2013 Cisco and/or its affiliates. All rights reserved. 18Partner Business TransformationBusinessIntroductionDeal EconomicsBusinessOperationsPracticeEconomicsInvestmentsBusiness ModelWorksheetXaaS Resale is probably themost important model for mostCisco Partners that arefocused on traditional CPEresell to understand because:• Requires limited capitalinvestment• Establishes a recurringrevenue model• Revenue and margin build upover timeBUT, you must add valuethrough your own servicesand/or by aggregating servicesThe first step in understanding the business economics is to determine the type of cloud partner you strive to become. The goods newsis that most Cloud Service Providers offer a low investment alternative to get started.InvestmentMargin OpportunityReferral/Agent3-5%*XaaSResale10-15%*XaaSWhitelabel20+%**Based on industry research and partner interviews. Some solutionproviders state higher margin opportunities depending on the serviceprovider, the partner relationship and product offering.Marketing Getting StartedBusinessModel Sales ServicesSolution &OpportunityTools &ResourcesCiscoOverview
  19. 19. © 2013 Cisco and/or its affiliates. All rights reserved. 19Partner Business TransformationBusinessIntroductionDeal EconomicsBusinessOperationsPracticeEconomicsInvestmentsBusiness ModelWorksheetAccording to research from MarketBridge/IPED, ideal “Partners of the Future” will sell on-premise as well asoffer managed and cloud based services. As a Cisco Partner, you will need to develop the appropriatebalance for your business.PartnerProfile• A Managed Service Provider is typically a VAR who has transitioned to add additional managed or cloud services to itsportfolio• By Selling into the on-premise data center, hosting or reselling cloud services, these partners are well positioned to meetcustomer needs• The recurring revenue services offset the revenue/gross margin loss in the transition from one-time-charge HW, SW torecurring revenuePercent of Revenue from Managed Services50% of Rev fromManaged services~25%20% of Rev fromManaged Services~75%100% of Rev fromManaged Services<5%IT infrastructure VARs whohave added Managed Servicesalso keySweet spot = >50% of revenuesin managed servicesMarketing Getting StartedBusinessModel Sales ServicesSolution &OpportunityTools &ResourcesCiscoOverview
  20. 20. © 2013 Cisco and/or its affiliates. All rights reserved. 20Partner Business TransformationBusinessIntroductionDeal EconomicsBusinessOperationsPracticeEconomicsInvestmentsBusiness ModelWorksheetOn Premiseover 3 yearsIaaS Opportunityover 3 yearsPartner Revenue $44,500 $25,000Partner Margin $7,000 (15%) $4,650 (19%)BIC Partner Margin $7,000 (15%) $5,970 (24%)Assumptions:12% HW & 15% SW margins30% Gross margins on servicesIllustrative IaaS Deal Economics …understanding the realities of the revenue andmargin impacts WILL help you understand thepotential gaps in your business plan….…lower customer costs in the short term CAN helpyou close additional opportunities in a shorter timeframe……to drive margin growth, changes in your overallbusiness structure may be required……your business plan needs to be updated to reflectthe realities of your opportunities in the newmodel……professional services are often the key to successwhen expanding beyond product resale…Assumptions:15% on Cloud Services52% Gross margins on services(BIC)…some opportunities offer payback in 9-12 months…– Cisco Cloud ProviderRecurring revenue opportunities can look very different than traditional resell opportunities. Before you start making changes to yourbusiness, you must first understand the impacts individual opportunities will have on your business model. Therefore, you shouldbegin your transformation by comparing your typical deals and how that might differ in a cloud environment. Below is an example ofhow an IaaS transaction may compare with a similar on premise offering.“ ”Source: MarketBridge InterviewsMarketing Getting StartedBusinessModel Sales ServicesSolution &OpportunityTools &ResourcesCiscoOverview
  21. 21. © 2013 Cisco and/or its affiliates. All rights reserved. 21Partner Business TransformationPracticeEconomicsBusinessIntroductionDeal EconomicsBusinessOperationsInvestmentsBusiness ModelWorksheetThe numbers above are illustrative only based on information provided by Cisco that outlines functionally similar opportunities Assumes deal of 250 usersIllustrative HCS Deal Economics …understanding the realities of the revenue andmargin impacts WILL help you understand thepotential gaps in your business plan….…in some case the total revenue for Cloud dealsmay EXCEED the revenue for on-premiseSolutions……in these cases, your transformation may be morerelated to your ability sell on total value vs. productresale……adding professional services or additionalrecurring revenue services will improve BIC typemargins…On Premiseover 3 yearsHCS Opportunityover 3 yearsPartner Revenue $146,072 $258,422Partner Margin $21,624 (15%) $47,772 (18%)The breakeven in many HCS deals can be 6-9 months…Assumptions:10% HW & 15% Maint margins30% Gross margins on servicesAssumptions:20% on HCS Cloud Services30% Gross margins on servicesNo BIC margins associated“ ”Source: CiscoThe deal economics comparison is critical for you to gain a perspective of the business transformation requirements that are specific toyour organization. In some cases, the revenue and associated margin my be lower initially for cloud deals, but could generate higherrevenue and potentially higher margins over a period of time.Marketing Getting StartedBusinessModel Sales ServicesSolution &OpportunityTools &ResourcesCiscoOverview
  22. 22. © 2013 Cisco and/or its affiliates. All rights reserved. 22Partner Business TransformationPracticeEconomicsBusinessIntroductionDeal EconomicsBusinessOperationsInvestmentsBusiness ModelWorksheet$4.0 M$4.5 M$5.0 M$5.5 M$6.0 M$6.5 M$7.0 MYear 1 Year 2 Year 3 Year 4Revenue ComparisonRevenue - On premise Only Revenue - Balanced PracticeAssumptions• Sample is a solution providerwith $5M in revenue.• Cloud represents 10% ofbusiness in YR1 growing to25% in YR4• Cloud deals are 50% of thesize of on-premise Solutions• On premise revenue isgrowing at 5% per year• Company growth achieved is7 – 20% over 4 yearsThe data contained in this chart is illustrative. Assumptions are included at the back of this document..In discussion with a number of Cisco Channel partners, the transition was completed over several years and included realisticmodeling of expected cloud/recurring revenue. The illustrative model below shows the revenue comparison for a smaller solutionprovider between maintaining an “on premise Only” business vs. a more balanced approach that includes a growing portion of theirrevenues in a recurring revenue model. Every solution provider is unique and should use model their business to gain a betterunderstanding of how the transformation may look for your business.We are seeing 20-25% growth in ourcloud business vs.5% in our on-premisebusiness…– Cisco Cloud ProviderThe next step is to model the REVENUE impact of transforming a portion of your business to a cloud and/orrecurring revenue model.“”Marketing Getting StartedBusinessModel Sales ServicesSolution &OpportunityTools &ResourcesCiscoOverview
  23. 23. © 2013 Cisco and/or its affiliates. All rights reserved. 23Partner Business TransformationPracticeEconomicsBusinessIntroductionDeal EconomicsBusinessOperationsInvestmentsBusiness ModelWorksheetThe data contained in this chart is illustrative. Assumptions are included at the back of this document. .Using the revenue model outlined on the previous page, you need to consider how making changes in your business model canimpact your overall gross margins. Based on interviews and research, solution providers that have a recurring revenue basedbusiness model can generate gross margins that are 15-20+% higher than solution providers that primarily focus on product resale.Using these assumptions can show that adding a recurring revenue (XaaS and/or managed services) can positively impact your grossmargins, but only if you make the core changes to your business. Your evaluation model also needs to incorporate the necessaryinvestments requirements. Some of the more common investments are listed on the next page.The next step is to understand the GROSS MARGIN impact on your business.$.90 M$1.15 M$1.40 M$1.65 MYear 1 Year 2 Year 3 Year 4Gross Margin ComparisonGross Margin - On premise Only Gross Margin - Balanced PracticeAssumptions• 24% overall gross margin ontotal business (product resaleand services) for on premise onlybusiness model• 20% gross margin in year 1-2 toaccommodate investmentsand/or inefficiencies• 35% gross margin achievementin years 3+ based on businesstransformationsMarketing Getting StartedBusinessModel Sales ServicesSolution &OpportunityTools &ResourcesCiscoOverview
  24. 24. © 2013 Cisco and/or its affiliates. All rights reserved. 24Partner Business TransformationPracticeEconomicsBusinessIntroductionDeal EconomicsBusinessOperationsInvestmentsBusiness ModelWorksheetThe figures above are illustrative only and based on information provided from Cisco, partner interviews and MarketBridge/IPED research. Cisco Partners should use themodel to identify how adding a different mix of services can impact your bottom line.ProductResellProjectServicesRecurringServicesTotalProductResellProjectServicesRecurringServicesXaaS TotalRevenue $70.0 $25.0 $5.0 $100.0 $60.0 $10.0 $15.0 $15.0 $100.0% of total revenue 70% 25% 5% 60% 10% 15% 15%Gross Margin $8.4 $7.5 $2.0 $17.9 $7.2 $3.0 $6.0 $2.3 $18.5Gross Margin % 12% 30% 40% 18% 12% 30% 40% 15% 18%$8.0 $8.08% 8%$6.0 $6.0& Administrative 6% 6%$3.9 $4.53.9% 4.5%Sales CostGeneralOperating IncomeCisco Partner with blended Services ModelCisco Partner with Traditional CPE Resell BusinessThe deal economics for many Cisco Partners may not actually be affected over the long term due the nature of lower margins currentlyassociated with a primary resell business model. BUT, there will be revenue and potentially cash flow issues as you make thetransition. Successful solution providers have made incremental changes in their business by shifting portions of their traditionalProfessional Services to Managed Services and replacing a portion of the product resell with XaaS based offerings. The sample P&Lbelow illustrates how a different mix of revenue streams can have a material impact on your bottom line.Marketing Getting StartedBusinessModel Sales ServicesSolution &OpportunityTools &ResourcesCiscoOverview
  25. 25. © 2013 Cisco and/or its affiliates. All rights reserved. 25Partner Business TransformationPracticeEconomicsBusinessIntroductionDeal EconomicsBusinessOperationsInvestmentsBusiness ModelWorksheet(15.00)(10.00)(5.00)-5.0010.0015.0020.0025.0030.000 1 2 3 4 5Operating Margin - Services ResellerOnce you outline the investments requirement as outlined on the previous page, you need to then develop a basic understanding ofthe ROI and potential time to payback on your investment. According to the research from MarketBridge, most solution providersexpect to achieve ROI within 12-24 months.0 1 2 3 4 5Revenue - 69.00 177.15 349.25 477.78 601.45Gross Margin - 10.23 25.83 50.59 68.66 86.1414.8% 14.5% 14.5% 14.4% 14.3%Selling Expenses 1.16 8.98 18.25 29.22 32.59 35.74Administration - 2.76 7.11 13.97 19.11 24.06Operating Income (1.16) (1.51) 0.47 7.40 16.96 26.35-2.2% 0.3% 2.1% 3.5% 4.4%Transition Expense 3.75 8.75 3.75 1.13 - -Pre-tax Income (4.91) (10.26) (3.28) 6.27 16.96 26.35-14.9% -1.8% 1.8% 3.5% 4.4%“”…we made an investment in a small NOC to help with ourmanaged services business. We have found that due to betterpredictability with our cloud offerings, we are able to scale ourresources in conjunction with the revenue stream…– Cisco Cloud Provider Source: IPED/MB InterviewsMarketing Getting StartedBusinessModel Sales ServicesSolution &OpportunityTools &ResourcesCiscoOverview
  26. 26. © 2013 Cisco and/or its affiliates. All rights reserved. 26Partner Business TransformationPracticeEconomicsBusinessIntroductionDeal EconomicsBusinessOperationsInvestmentsBusiness ModelWorksheetNetwork Operations Center• Several solution providers have statedthat adding a basic NOC and managedservices allowed them to be more easilyprepared for XaaS SolutionsTraining (Technical/Sales)• Teach the sales team about selling tobusiness owners, Opex vs. CapEx, andbenefits of cloud• Customers are looking for advice, sotraditional technical “just in time” is ofteninadequate. Investment is required inadvance of opportunitiesLeadership• Assign a knowledgeable leader whocan help the organization drive realchange• Many solution providers created aseparate organization to initially drivefocusMarketing• Education, thought leadership, websiteupdates and social mediaimprovements were the most commonmarketing investmentsIntellectual Property• Solution Providers have realized thatrecurring revenue provides greatervalue for the organization and arestarting to make investments inacquisition, packaged services,application development andimplementing vertical extensionsProfessional Services• Invest in building a deep professionalservices practice that will enable thesale of cloud solutions with pre-saleservicesAccording to MarketBridge/IPED research, most Solution Providers that have fewer than 2 data centers are planning to resell or whitelabel XaaS services as opposed to building their own. This allows for significantly less up front capital investments but someinvestments are still required in your business. The most common investments made by other Cisco Partners have been:Marketing Getting StartedBusinessModel Sales ServicesSolution &OpportunityTools &ResourcesCiscoOverview
  27. 27. © 2013 Cisco and/or its affiliates. All rights reserved. 27Partner Business TransformationPracticeEconomicsBusinessIntroductionDeal EconomicsBusinessOperationsInvestmentsBusiness ModelWorksheetPipeline and Revenue Management.Metrics and Dashboards.Billing and Management.• Usage based billing is required.• Partners with existing monthly billing systems havemade the transition smoothly• Most Cloud Providers offer partners a full toolsetCross XaaS Management.• Applicable for selling multiple XaaS services fromdifferent providers/vendors• This is still an industry challenge but new technologysolutions are emerging daily to address• Many distributors provide cross XaaS platforms• Customer Lifetime Value (CLTV) can drive decisionmaking and discounting policies• Renewal management is one of the most criticalmetrics in XaaS and recurring revenue models.Many solution providers expect 90% renewal rates.• Pipeline management must address “existing bookof business”• New customer acquisition can be as important asdeal management in predominately recurringrevenue businessIn addition to the business model changes required in your business, there are a number of operational considerations that you needto address. Depending on the maturity of your business, these may be relatively straight forward to address or they might becompletely new to your organization. During discussions with Cisco Partners, some partners are implementing their own solutions tothese operational issues while others are looking to their Cloud Provider to help them make adjustments to their back office. The topbusiness operational considerations identified were:Marketing Getting StartedBusinessModel Sales ServicesSolution &OpportunityTools &ResourcesCiscoOverview
  28. 28. © 2013 Cisco and/or its affiliates. All rights reserved. 28Partner Business TransformationPracticeEconomicsBusinessIntroductionDeal EconomicsBusinessOperationsInvestmentsBusiness ModelWorksheetExample P&LTraditional Cisco Partner with CPE Resell BusinessesProductResellProjectServicesRecurringServicesTotal$70.0 $25.0 $5.0 $100.070% 25% 5% 100%$9.8 $7.5 $2.0 $19.314% 30% 40% 19%$6.06%$10.010%$3.33.3%Cisco Partner with Blended Services ModelProductResellProjectServicesRecurringServicesXaaS Total$60.0 $10.0 $15.0 $15.0 $100.060% 10% 15% 15% 100%$8.4 $3.0 $6.0 $2.3 $19.714% 30% 40% 15% 20%$6.06%$10.010%$3.73.7%Blank P&LTraditional Cisco Partner with CPE Resell BusinessesProductResellProjectServicesRecurringServicesTotal$0.0 $0.0 $0.00%$0.0 $0.0 $0.0 $0.00%$0.0$0.0$0.00.0%Traditional Cisco Partner with CPE Resell BusinessesProductResellProjectServicesRecurringServicesXaas Total$0.0 $0.0 $0.0 $0.00%$0.0 $0.0 $0.0 $0.0 $0.00%$0.0$0.0$0.00.0%RevenueGross MarginSales and Marketing CostGeneral & AdministrativeOperating IncomeRevenueGross MarginSales and Marketing CostGeneral & AdministrativeOperating IncomeMarketing Getting StartedBusinessModel Sales ServicesSolution &OpportunityTools &ResourcesCiscoOverview
  29. 29. © 2013 Cisco and/or its affiliates. All rights reserved. 29Partner Business TransformationPracticeEconomicsBusinessIntroductionDeal EconomicsBusinessOperationsInvestmentsBusiness ModelWorksheetBusiness Model Summary• Cisco Partners need to adopt a hybrid approach that incorporates cloud solutions into their overallbusiness model• According to research from MarketBridge/IPED, the most successful solution providers will be the ones that canaddress customer requirements across multiple delivery platforms• Successful partners are making fundamental changes in their overall business to take advantage of thecloud opportunity• Changes are required to your sales, marketing, services and operations to fully realize the business impacts of cloudand recurring revenue services• The transformation has been gradual for most partners and may take 12-24 months to make the transition• By choosing to work with a Cisco Cloud Provider via agent models, resale or white label offerings your organizationmay be able to gain traction quickly and limit your initial investments by partnering with world class service providers• The market opportunity for XaaS offerings is still early but now is the time for Cisco Partners to begin thetransformationMarketing Getting StartedBusinessModel Sales ServicesSolution &OpportunityTools &ResourcesCiscoOverview
  30. 30. © 2013 Cisco and/or its affiliates. All rights reserved. 30Partner Business TransformationSales Team &SkillsSales MessagingSales ProcessSales ModelSuccessful cloud solution providers have made significant adjustments to their selling motion in order to realize theefficiencies in selling cloud based solutions, but one constant remains:The partners that can address customer solutions across on-premise, private and public cloud environments havethe greatest opportunity to be successful.SalesCompensationFor more information on enabling your sales team on the latest Cisco Powered Cloud Solutions, click here• Sales Compensationhas been noted asone of the areas thatshould be addressedimmediately. Salesmotivation can be thedifference betweensuccess and failure.• Are your sales repscapable of leading aconsultative basedcloud discussion?• Is cloud outlined as acore capability?.• Can you besuccessful with ahardware orientedsales team?• How do you handleAccountManagement?• The closing processneeds to be muchshorter and SHOULDbe repeatable.• Can you afford tomaintain your currentselling process?• Should you create aseparate salesorganization?Marketing Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverviewSales Overview Sales MessagingSales Process Team & SkillsSales ModelSalesCompensation
  31. 31. © 2013 Cisco and/or its affiliates. All rights reserved. 31Partner Business TransformationMany successful Cisco Cloud Resellers viewcloud solutions as simply another delivery optionand have trained their existing sales force toeffectively handle selling cloud solutions.Separate Sales Team to drive focus on Cloud SolutionsIntegrated approach to Selling Cloud SolutionsSalesSolutionSalesRepSolutionSalesRepSolutionSalesRepSalesTraditionalTeamCloud SalesTeamThe transition from on-premise to Cloud orrecurring revenue services requires focus acrossthe sales teams.A number of successful Cisco Cloud Resellerscreated a separate sales organization to drivefocus to avoid conflicts and maintain focus onthe current business.This model may be best for yourorganization if you :• Generate 85% or more of yourrevenue from product resell• Have a transaction focused salesteam• Are just starting the migration toselling services or managed servicesThis model may be best for youorganization if you :• Have a services focused sales team• Sell business or vertically orientedsolutions• Focus on customer solutions (vs. techsales)Marketing Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverviewSales Overview Sales MessagingSales Process Team & SkillsSales ModelSalesCompensation
  32. 32. © 2013 Cisco and/or its affiliates. All rights reserved. 32Partner Business TransformationOpportunity Generation Sales Closing Account ManagementOpportunity generation for cloud basedsolutions can be very different thantraditional hardware focused sales. Yourorganization should put plans in place toaddress:• Higher velocity deal flow andqualifications• Web based POCs and/ or demos• New customer acquisition using Cloudas a catalystIn general, the revenue associated withCloud opportunities tends to be smallerin the first year. Therefore, your sellingprocess needs to be updated to ensureyou maintain the proper sales coverage.The critical differences that need to beinvestigated are:• Speed to close• Less customized• Focus on fast qualificationMore than ever before, your team needsto focus on the account managementrole. Renewals and customer adoptionare critical for the recurring sales model.You need to decide:• Will AM be managed by the salesteam or a dedicated AM staff?• Does my process support a goal of90+% renewal rate?• Do I have a formal customer adoptionplan?Your sales process MUST be repeatable and address 3 critical areas:Marketing Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverviewSales Overview Sales MessagingSales Process Team & SkillsSales ModelSalesCompensation
  33. 33. © 2013 Cisco and/or its affiliates. All rights reserved. 33Partner Business TransformationConsultative SalesExecutivesInside Sales Account ManagementContinued focus on on-premise ModelsWe have struggledtrying to get hardwareonly sales people tomake the transition.The salespeople witha services sellingbackground haveadapted mucheasier…– Successful CiscoCloud ResellerComplex, enterprise typerequirementsIT focused salesLower cost, higher volumebased opportunitiesFocused on initialqualificationsCritical in hybrid model tounderstand complex dealsmust be field basedResponsible for securingrecurring revenue streamsCan be separateindividual or part of salesteam responsibilityYou need to carefully consider the sales resources that you have on board and ensure that you have the right skills deployed againstthe right sales expectations. Consider a mix of the following sales personnel /responsibilities depending on your selling model:“”Marketing Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverviewSales Overview Sales MessagingSales Process Team & SkillsSales ModelSalesCompensation
  34. 34. © 2013 Cisco and/or its affiliates. All rights reserved. 34Partner Business TransformationThe sales conversation in cloud opportunities is often very different than the normal feature, function, benefit and price conversationthat is often times typical in a traditional hardware sales opportunity. As your sales teams prepare to engage customers and prospectsin cloud opportunities, they need to be able to effectively address some of the key driving business motivators for moving to cloudsolutions. Solution providers that have successfully transitioned to selling cloud solutions have revisited their sales material to ensuretheir team is prepared to address more business oriented selling messages.• Predictable IT Costsused within operatingbudgets• Mid market access toenterprise functionality• Lower initial cost toimplement• Heavy focus onbusiness outcome vs.technologyLower TotalCostOPEX vs.CAPEXBusinessGrowthAccess toNewSolutionsMarketing Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverviewSales Overview Sales MessagingSales Process Team & SkillsSales ModelSalesCompensation
  35. 35. © 2013 Cisco and/or its affiliates. All rights reserved. 35Partner Business TransformationCompensation Plan Tactics Key ConsiderationsConsider paying commissions on totalcontract value upfront• Requires working capital to offset future customer paymentsPay sales bonus for Cloud deals• Effective way to have sales teams and service delivery team stay focused on Cloudsales• Provides short term rewards to sales teamsOffer accelerators for closing multi-yeardeals• This tactic can help offset the “wait time” to commission on recurring revenue dealsOffer annual incentives for renewal targets• This can keep the sales team engaged with customers to ensure your organizationmaintains the retention revenue and operates at a 90% renewal rateConsider paying incentives for newcustomer contracts• Allows sales teams to generate short term commission payments in support of longterm company objectivesCRITICAL – Define future year recurringrevenue compensation• Future year commission payments policies regarding ownership and transfer needto be put in place from the beginningOption 1 –Allow sales reps to create a “book ofbusiness” like an insurance agent• Future year commission payments are treated like an existing book of business, notunlike an insurance agencyOption 2 –Pay sales reps for the first several years• Some partners are treating this like maintenance contracts (and not payingcommission) or paying commissions for the first several yearsMarketing Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverviewSales Overview Sales MessagingSales Process Team & SkillsSales ModelSalesCompensation
  36. 36. © 2013 Cisco and/or its affiliates. All rights reserved. 36Partner Business TransformationWe pay our sales reps on gross margin only. And we pay on their total book ofbusiness. The smart ones have figured out that going into each month they havea portion of their quota already met from their recurring revenue business. Thissomewhat allows them to balance the need to sell a big deal with the need tobuild a sustaining backlog of recurring revenue. BUT…This may not have workedif our sales team was more transient in nature.– Cisco Cloud Reseller with sales reps that have significant tenure at the companyWe pay our reps on the total contract value upfront. We have enoughcash flow from our organization to cover the sales compensation eventhough the customers have not paid us yet. Our account managers sellour complete portfolio so this helps with potential compensation issuescompared to larger upfront deals. But our reps do not get paid forrenewals. We have a dedicated team that handles that.– Larger (>$100M in annual revenue) Cisco Cloud ResellerWe put an overlay sales force in place to address the issue of having mostlyhardware based sales reps. This will cost more in the beginning, but it is avariable cost on a small portion of our overall revenue right now– Cisco Partner in the process of implementing XaaS solutions but 80+% ofrevenue is still from product resale“”“”“”Marketing Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverviewSales Overview Sales MessagingSales Process Team & SkillsSales ModelSalesCompensation
  37. 37. © 2013 Cisco and/or its affiliates. All rights reserved. 37Partner Business TransformationParticipant: John Q. Sales Yearly Base: $50,000Title: Territory Sales Rep Yearly OTE: $100,000Term: 12 Yearly Quota: $1,000,000 (Gross Margin Target)Effective Date: January 1, 2013 Cloud Target $50,000 (Gross Margin Target)Revision Date: December 31, 2013OTE Summary: On-target Earnings 100% 100,000$Base 50% 50,000$Variable 50% 50,000$Variable PayoutCommission 100% 50,000$Quota 1,000,000$Territory Commission: 50,000$Tier 1 Tier 2 Tier 2Quota Floor (%) 0% 100% 125%Quota Ceiling (%) 100% 125% No CapQuota Floor ($) $0 $1,000,000 $1,250,000Quota Ceiling ($) $1,000,000 $1,250,000 No CapCommission Rate 5.00% 7.50% 10.00%Tier 1 Rates paid until Cloud Target achievedSales Representative OTE Commission PlanSample Solution Provider Compensation Plan - 1The sample sales compensation plan outlines oneexample of how a sales rep is paid on a normal quotabased compensation plan, but also has a XaaS/Cloudtarget that must be met before commission rateaccelerators are paid..This option is a good example for solution providersthat:• Want to have an integrated sales force• Are just getting started with XaaS and want amotivator in place for their top producing salesreps• Have a need to drive current revenue, yet need toget the attention of the sales team to drive somelevel of XaaS/Cloud revenueWe have given our sales reps an XaaS quota,which was relatively small initially. And weput a comp program in place that if they donot meet the XaaS quota, they are not eligiblefor accelerators on their base comp.– Cisco Cloud Reseller focused on Telco market“”Marketing Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverviewSales Overview Sales MessagingSales Process Team & SkillsSales ModelSalesCompensation
  38. 38. © 2013 Cisco and/or its affiliates. All rights reserved. 38Partner Business TransformationParticipant: John Q. Sales Yearly Base: $50,000Title: Territory Sales Rep Yearly OTE: $100,000Term: 12 Yearly Quota: $1,000,000 (Gross Margin Target)Effective Date: January 1, 2013 Cloud Target $50,000 (Gross Margin Target)Revision Date: December 31, 2013OTE Summary: On-target Earnings 100% 100,000$Base 50% 50,000$Variable 50% 50,000$Variable PayoutCommission 80% 40,000$Cloud Sales Bonus 20% 10,000$Quota 1,000,000$Territory Commission: 40,000$Tier 1 Tier 2 Tier 2Quota Floor (%) 0% 100% 125%Quota Ceiling (%) 100% 125% No CapQuota Floor ($) 0 1,000,000 1,250,000Quota Ceiling ($) 1,000,000 1,250,000 No CapCommission Rate 4.00% 6.00% 8.00%Cloud Sales Bonus 10,000$FY Period Q1 Q2 Q3 Q4Quota 12,500$ 12,500$ 12,500$ 12,500$ % of Bonus PaidBonus @ 100% Achieve 2,500$ 2,500$ 2,500$ 2,500$ 100%Bonus @ 90% Achieve 1,250$ 1,250$ 1,250$ 1,250$ 50%Bonus @ 85% Achieve 625$ 625$ 625$ 625$ 25%Bonus StructureSales Representative OTE Commission PlanSample Solution Provider Compensation Plan - 2This sample sales compensation plan outlines oneexample of how a sales rep is paid on a normal quotabased compensation plan, but also has a XaaS/Cloudbonus as part of their overall compensation model.This option achieves a similar result as the firstexample, but provides a compensation motivator forall reps. This option is a good example for solutionproviders that:• Want to have an integrated sales force• Are just getting started with XaaS and want amotivator in place for all sales reps• Want to establish a commission plan that isinclusive of XaaS/Cloud revenue targetMarketing Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverviewSales Overview Sales MessagingSales Process Team & SkillsSales ModelSalesCompensation
  39. 39. © 2013 Cisco and/or its affiliates. All rights reserved. 39Partner Business TransformationReachEngageConvertRe-engageEducateConvertNew Customers Existing CustomersThere are two different approaches when speaking to your customers about Cloud solutions; first thingis to consider who it is you’re talking to…Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverviewMarketingThe New CloudBuyerExisting CustomerMarketingMarketingPlanningNew CustomerMarketingMarketingMessaging
  40. 40. © 2013 Cisco and/or its affiliates. All rights reserved. 40Partner Business TransformationThe New CloudBuyerThey are independent• On average customers progress nearly 60% of the way through the purchase decision making process beforeengaging a sales representative (Source: CEB’s Marketing Leadership Council survey)Hungry for cloud• The subscription web services market is forecasted to grow to $109 billion globally in 2013, up 19.6%, originallyforecasted to grow just 12-15% (Source: Gartner)Need to maximize their technology• On average, CIOs report their enterprises realize only 43% of their technology’s business potential(Source: Gartner)New Cloud Buyers Are More informed, More Social, and Well-Prepared• Web-centric buyers• IT savvy executives• Line of Business Management• Very focused on customer references and referralsGetting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverviewMarketingExisting CustomerMarketingMarketingPlanningNew CustomerMarketingMarketingMessaging
  41. 41. © 2013 Cisco and/or its affiliates. All rights reserved. 41Partner Business TransformationSuccessful cloud partners are focused on business value messages vs.technical feature/function:• Lower upfront costs for both products andservices• Faster time to market• Predictable costs• Greater business value• Business growth and innovation• Flexibility and scalabilityA joint value proposition helps establish your company as a proven value to clientsLeverage the marketing benefits Cisco offers:• Cisco funded and executed awarenesscampaigns to create customer preference• A portfolio of validated cloud and managedservices• Supplemental joint marketing funds andresources• Partner-ready marketing and salesenablement toolsLead with a Cloud Value Message & Leverage Cisco ToolsGetting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverviewMarketingThe New CloudBuyerExisting CustomerMarketingMarketingPlanningNew CustomerMarketingMarketingMessaging
  42. 42. © 2013 Cisco and/or its affiliates. All rights reserved. 42Partner Business TransformationReach new customers with multi-channel digital marketingcampaigns to create awareness of new cloud offeringsEngage early and often through social media and help educatecustomers on the benefits of cloud solutionsConvert prospects into customers by leveraging your website tohighlight your portfolio of offerings that can be tailored to fit theirbusiness needsReachEngageConvertEach individual customer will require a different type of marketing mix depending on where they fallalong the sales marketing funnel. Each stage of the funnel requires a unique marketing strategyCustomer progression along the funnel depends on their knowledge/adoption of cloudGetting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverviewMarketingThe New CloudBuyerExisting CustomerMarketingMarketingPlanningNew CustomerMarketingMarketingMessaging
  43. 43. © 2013 Cisco and/or its affiliates. All rights reserved. 43Partner Business TransformationTraditional marketing tools were“linear”… today’s digital tools are“geometric” in relation to one anotherand feature:• One core strategy• Interconnected messaging• User-generated content• “Rich” product informationReachEngageConvertGetting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverviewMarketingThe New CloudBuyerExisting CustomerMarketingMarketingPlanningNew CustomerMarketingMarketingMessaging
  44. 44. © 2013 Cisco and/or its affiliates. All rights reserved. 44Partner Business TransformationEngaging with your customer and educatingthem through a variety of touch pointsensures that your brand and solutionofferings will be kept top-of-mind whenmaking purchasing decisions.Common tools/strategies used include:• Creating a blog that showcases industry experts and drivestraffic back to relevant product sites• Establishing a twitter or micro blog account to sharecommentary on cloud industry developments and successstories• Participating in LinkedIn or social networks catering tobusiness professionals• Shared demonstrations, tips, and presentations onmultimedia services such as Vimeo, YouTube, orSlideShare.ReachEngageConvertEngageGetting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverviewMarketingThe New CloudBuyerExisting CustomerMarketingMarketingPlanningNew CustomerMarketingMarketingMessaging
  45. 45. © 2013 Cisco and/or its affiliates. All rights reserved. 45Partner Business TransformationConvert prospects into customers bydriving them to your website, whichhighlights the various offerings yourcompany offers.Leverage your website or build landing pages for your newproduct offerings:• Include direct links to trials and demos as appropriate• Collect and track website analytics, all informationregarding site traffic which can help segment and identifyprospects• Educate and establish your organization as cloud savvyand leaders in the adoption of cloud services• Build specific landing pages for marketing campaigns,events, and activities• Direct their experience to a clear call to take actionReachEngageConvertConvertGetting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverviewMarketingThe New CloudBuyerExisting CustomerMarketingMarketingPlanningNew CustomerMarketingMarketingMessaging
  46. 46. © 2013 Cisco and/or its affiliates. All rights reserved. 46Partner Business TransformationRe-engage with existing customers early and often to introducethem to cloud, the benefits of this transition, and how you can helpEducate these customers through a variety of face-to-face anddigital touch points – make yourself their go-to resource for allthings cloud relatedConvert these customers to cloud customers by tackling their cloudissues head on, and establishing yourself as cloud-savvy and a leaderin this spaceReachEngageConvertYour existing customers will require a different type of marketing experience than your new customers.This experience will require a different marketing mix than that of your new customers – one centeredaround educationGetting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverviewMarketingThe New CloudBuyerExisting CustomerMarketingMarketingPlanningNew CustomerMarketingMarketingMessaging
  47. 47. © 2013 Cisco and/or its affiliates. All rights reserved. 47Partner Business Transformation• The first step for primarily product resellers was to invest in professionalservices capabilities and build offerings• Many started by implementing a Managed Services Offering (i.e. Helpdesk,Remote Monitoring, NOC, Support, Training)• Developed services offerings that are packaged and repeatable• Reduced resource intensive, customized consulting offerings• Implemented changes in their processes to speed deployments• Offering services that are more tightly integrated into line of businessrequirements• Integrating and implementing solutions across multiple deployment models (On-premise, public and private)Successful solution providers have re-evaluated their project based professional services delivery capabilities in order toeffectively to take advantage of the cloud opportunity:Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverviewMarketingServicesOverviewProcessImprovementsPackagedServicesTraining andSkillsRevisedServices
  48. 48. © 2013 Cisco and/or its affiliates. All rights reserved. 48Partner Business TransformationConfiguration& Implementation• Provisioning and set-up basedon prepackaged parameters• Data migration• Infrastructure and applicationintegration• Security and access policies/definitions• Testing• Integration of multiple cloudofferingsPre Sales Services• Cloud-readinessassessments andrequirements• Data migration planning (ifappropriate)• Workflow or businessprocess consulting• Industry-specificcustomizationPost Sales• Remote monitoring andmanagement• User training• Managed help desk• Service level and usagereporting• Account management• Managed service offerings• Solution adoption servicesSuccessful solution providers have revisited their professional services offerings to align with customer requirements across pre-sales,implementation and post sales stages. In some cases, traditional technical implementation services are less valued in public cloudsolutions, but the integration of cloud and on-premise services has proven to be growth area for many solution providers. The followingis a list of some of the services offerings that successful solution providers are offering in the cloud opportunities.Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverviewMarketingServicesOverviewProcessImprovementsPackagedServicesTraining andSkillsRevisedServices
  49. 49. © 2013 Cisco and/or its affiliates. All rights reserved. 49Partner Business TransformationManaged ServicesAdditional services for remotemanagement, help desk, networkmonitoring, and managed securityservices.Backup / DisasterRecovery ServicesAdditional services related to managingdata backups, storage and datarecovery.Enhanced ConnectivityServicesAdditional services such as SIPtrunking, MPLS, and offering additionalbandwidth.Vertical/ LOB SolutionIntegrationAdditional service opportunities forimplementing LOB applications withintegration to public and/or private cloudimplementationsOn-premise to CloudIntegrationsAdditional services for integrating on-premise applications, data migrationand data access.As with any emerging technology markets, the acceptance of XaaS offerings is creating significant opportunities for Cisco partners todrive new service opportunities that may not have existed in the on-premise world. Some of the top offerings that were identifiedduring interviews with Cisco partners that have begun the transition were:Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverviewMarketingServicesOverviewProcessImprovementsPackagedServicesTraining andSkillsRevisedServices
  50. 50. © 2013 Cisco and/or its affiliates. All rights reserved. 50Partner Business TransformationPackaged servicessimilar to productofferings• Streamlined, scaled down, fixed price package offerings• Offerings such as: Proof of concepts/pilots, help desk, managedservices, data migration, and assessments.Use templates,checklists andaccelerators• Repeatability is important to manage margins• Limit complex time and material contracts for XaaS solutions on initialengagements.Price offeringsconsistent with cloudmodels• Price services consistent with XaaS pricing (per user, per month, etc)where possible• High upfront priced service offerings can appear out of lineSuccessful solution providers have revisited their professional services offerings to align with customer requirements across pre-sales,implementation and post sales stages. In same cases, traditional technical implementation services are less valued in public cloudsolutions, but the integration of cloud and on-premise services has proven to be growth area for many solution providers. The followingis a list of some of the services offerings that successful solution providers are offering in the cloud opportunities.Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverviewMarketingServicesOverviewProcessImprovementsPackagedServicesTraining andSkillsRevisedServices
  51. 51. © 2013 Cisco and/or its affiliates. All rights reserved. 51Partner Business Transformation• Pre-sales consulting• Business process• Hybrid / data migration expertise• Technical development of packaged offeringsSkills• Pre defined, pre-price• Limited customizations• Delivered via junior resourcesFast Start, fixedpriced SOWs• NOT JUST product training• Training on delivery of appropriate services• Develop internal expertsTraining / ChangeManagementDo you have people who are capable of making the transformation to cloud services? You might need to build out your team or thinkabout bringing on appropriate resources. Some of the skills you might need to emphasize are: Knowledge of business process,understanding of the hybrid models, etc. The job of a services professional in the cloud model usually is to keep encounters as efficientas possible. This might be a switch from an on-premise model, in which services teams might have been encouraged drive revenuedue to longer, complex engagements. Training will require a very different focus. This isn’t about products, it is about understandingprocesses, understanding service levels. So your services team really needs to be experts about the cloud model and how it can aidyour clients.Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverviewMarketingServicesOverviewProcessImprovementsPackagedServicesTraining andSkillsRevisedServices
  52. 52. © 2013 Cisco and/or its affiliates. All rights reserved. 52Partner Business TransformationDepending on the make-up of your services delivery team, significant changes may be required in yourprofessional services process. Some of the key considerations as you evaluate your services offeringsinclude:• Resource assignments and appropriate use of technical resources• Skills development and management• Utilization metrics• Resource allocation expectations (many cloud projects are shorter term andare delivered mostly remotely, therefore resources are often deployed onmultiple projects simultaneously)• Pricing (the process for pricing services in a cloud model are typically moredependent on SLAs vs. time and materials)• Statement of work development and change managementGetting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverviewMarketingServicesOverviewProcessImprovementsPackagedServicesTraining andSkillsRevisedServices
  53. 53. © 2013 Cisco and/or its affiliates. All rights reserved. 53Partner Business TransformationCisco Professional Services can assist your organization as you develop your own cloud capabilities.Cisco Cloud Adoption Strategy Services•Strategy services that help accelerate the adoption of Cloud by taking a proactive approachthat helps partners understand the security needs, risks, and the steps necessary to mitigatesecurity threats as part of migration to Cloud. For more information click here.Cisco Cloud Adoption Planning Services•Planning services that help accelerate the adoption of Cloud by taking a proactive approachthat helps partners plan for the infrastructure, application, and security changes that will berequired with the transformation to Cloud. For more information click here.Cloud Readiness Assessment•An online assessment which allows partners to gauge their readiness for Cloudimplementation. Built around 20 questions which covers five core areas: general, business,technology, people, and process. For more information click here.Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverviewMarketingServicesResourcesTransformationWorkshopMarketingResourcesVODSeriesSalesResources
  54. 54. © 2013 Cisco and/or its affiliates. All rights reserved. 54Partner Business TransformationCisco provides tools and resources to help your sales reps sell cloud solutionsCloud 101•An education module which provides the foundational knowledge of Cisco Cloud. It is an excellentprimer prior to more in-depth trainings and is recommended for anyone new to Cloud and looking fora foundational understanding. For more information click here.Partner Education Connection•An online education portal which provides partners with training on Cisco products, tools, andsolutions. The majority of the courses are free which helps decrease travel expenses while increasingproductivity and sales through education. For more information click here.Cloud Sales Simulator•Enable your sales reps to recognize and qualify Cloud opportunities and generate client interest intalking with a Cloud Specialist. Access is available upon request to authorized Cloud ServicesResellers. Contact your Partner Account Manager for more information.IaaS Total Cost of Ownership/ Return on Investment CalculatorAn ROI/TCO tool that compares public cloud to private, on-premise solutions. This tool is highlycustomizable and intended to create CIO/CFO level business value comparisons. For moreinformation click here.Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverviewMarketingServicesResourcesTransformationWorkshopMarketingResourcesVODSeriesSalesResources
  55. 55. © 2013 Cisco and/or its affiliates. All rights reserved. 55Partner Business TransformationCisco’s partner marketing tools help enable and accelerate cloud salesCloud Marketplace•A new “micro-site” for partners and customers on Cisco.com. Offers customers a “one stopshop” Cloud Marketplace that is searchable by region and technology, expertise and XaaSoffers. For more information click here.Cisco Powered Partner Marketing Kits•Marketing kits which outlines Cisco brand guidelines, messaging, digital marketing assets &copy blocks. Also shares the Cisco media calendar (US) which allows for joint marketingengagements and event integration. For more information click here.Internal Sales Cloud & Managed Service Locator•An internal partner locator tool which helps your organization become more visible within theCisco direct sales force. Allows partners to be searched by offering, region, etc. Get with yourPartner Account Manager to have your information posted.Marketing Development Funds (MDF) Program•A joint channel marketing program which offers approved partners the funds needed to helpwith a Cisco centric Cloud practice building and demand generation activities. Theseactivities include: training, certifications, assessments, marketing campaigns, etc. For moreinformation click here.Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverviewMarketingServicesResourcesTransformationWorkshopMarketingResourcesVODSeriesSalesResources
  56. 56. © 2013 Cisco and/or its affiliates. All rights reserved. 56Partner Business TransformationLeverage the Video on Demand series to facilitate your own transformation sessionsPurposeProvide Cisco partners with self paced approach to supportdevelopment of an action plan to transform their business tothe cloudIntended AudienceAll Cisco CPE partnersFormatSeries of short videos that outline the major components ofthe business transformation workshops (business modelsand operations, sales, services and marketing) that can beused on site with your leadership team.Expected outcomeDevelopment of a custom action plan that outlines keyactions required in the areas of marketing, sales, operationsand servicesComing Soon!Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverviewMarketingServicesResourcesTransformationWorkshopMarketingResourcesVODSeriesSalesResources
  57. 57. © 2013 Cisco and/or its affiliates. All rights reserved. 57Partner Business TransformationTo receive help on business transformation, attend our Partner Business Transformation WorkshopPurposeProvide Cisco partners with a consultative workshopapproach to support development of an action plan totransform their business to the cloudIntended AudienceInterested Cisco CPE partnersFormatIn-person 1 day workshop for 2-3 partners with follow up 1:1sessions on action planExpected outcomeDevelopment of a custom action plan that outlines keyactions required in the areas of marketing, sales, operationsand servicesGetting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverviewMarketingServicesResourcesTransformationWorkshopMarketingResourcesVODSeriesSalesResourcesFor more information contact your Partner Account Manager.
  58. 58. © 2013 Cisco and/or its affiliates. All rights reserved. 58Partner Business TransformationCloud Services Reseller requirements:Cisco Cloud Services Reseller Requirements• Possess a valid resale contractual agreement with anapproved Cisco Cloud Provider• If any service sold requires resale of customer premiseequipment, the Cloud Reseller will need a valid resale channelagreement and appropriate specialization or ATP with Ciscofor any specialty products• POS details on closed sales must be provided to the CloudProvider, to report monthly• In addition, some Cisco Powered Cloud Solutions may haveadditional requirements.For more information, please click here orcontact your local Partner Account Manager.Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverviewMarketingSign Up Build a PlanEvaluateEnvisionSuccess
  59. 59. © 2013 Cisco and/or its affiliates. All rights reserved. 59Partner Business TransformationAre my employees ready to make this transformation?Are my customers ready to make this transformation?Do I have the resources necessary to build out my professional services?Are my financial and back-office systems capable of handling recurringrevenues?Is my website ready for this transformation?Is your business ready to make this transformation?Getting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverviewMarketingSign Up Build a PlanEvaluateEnvisionSuccess
  60. 60. © 2013 Cisco and/or its affiliates. All rights reserved. 60Partner Business TransformationEnroll as a Cisco Cloud ServicesResellerEnsure back-office and financialsystems are capable of handlingrecurring revenue modelEducate and train existing staff oncloud products and servicesBuild out and recruit a new, skilled,inside sales teamNext Steps:Build out professional servicesorganizationUpdate website to reflect the additionof new cloud service offeringBuild out marketing campaigns,leveraging Cisco marketing collateraland toolsDevelop new sales strategies andsales team organizationEducate and market new cloudofferings to existing customer baseSign a reseller contract with one orCisco Powered Cloud ProvidersGetting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverviewMarketingSign Up Build a PlanEvaluateEnvisionSuccess
  61. 61. © 2013 Cisco and/or its affiliates. All rights reserved. 61Partner Business TransformationContact your Cisco Partner Account Manager todayfor more informationOr contact the Partner Help Line by clicking hereGetting StartedBusinessModelSales ServicesSolution &OpportunityTools &ResourcesCiscoOverviewMarketingSign Up Build a PlanEvaluateEnvisionSuccess

×