Cisco lets rip with SIP

Networking giant Cisco has underlined its commitment to partner profitability with the launch of a solutions incentive programme (SIP). The latest move marks the third stage in Cisco’s ongoing quest to bolster channel margins.

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By  Stuart Wilson Published  April 17, 2005

Networking giant Cisco has underlined its commitment to partner profitability with the launch of a solutions incentive programme (SIP). The latest move marks the third stage in Cisco’s quest to bolster channel margins and sits neatly alongside the existing value incentive programme (VIP) and opportunity incentive programme (OIP). The newly launched SIP initiative rewards channel partners for integrating packaged applications and partner services with Cisco technology to create innovative solutions for specific industries or business functions. “SIP rewards partners for creating an applications-based solutions practice that takes advantage of the full capabilities of the network,” explained Edison Peres, VP advanced and core technologies worldwide channels at Cisco. “Customers benefit from the creation of innovative business solutions that address a specific business need, and channel partners benefit by delivering solutions that garner great customer value, resulting in increased customer satisfaction and profitability.” To qualify for SIP, partners need to meet a few conditions. The solution must be based on an application, it must include lifecycle services such as application support, it must use some Cisco advanced technology and it must be repeatable, according to Peres. Partners must also hold Cisco certified and specialised designations in the relevant advanced technology for their solution and have a focused sales team in place. Cisco plans to split the solutions into two distinct categories: vertically oriented solutions that integrate deep into the network and have powerful business relevance, and horizontal applications that can be deployed in more situations. “We are going to pay partners based on the deals they do,” added Peres. “Partners identify a solution, develop a business plan and Cisco will consider pre-qualifying it for a year. Every deal that partners do during that year, they will receive dollars on the Cisco product that the solution uses.” “VIP, OIP and SIP are stackable and mutually exclusive, allowing partners to see much more margin opportunity,” continued Peres. “The amount received will vary by theatre. In the US, partner deploying a vertical solution will get an extra four points off list price. If they are in OIP and receive 48 points off, the SIP benefit will take this to 52 points.” Within Europe, Middle East and Africa (EMEA), Cisco is looking to pilot the scheme with a couple of specific solutions to gauge its impact before widening the deployment of SIP across the region. However, Cisco has announced the expansion of its OIP scheme in EMEA. Edzard Overbeek, vice president, commercial, channels and distribution EMEA at Cisco, explained: “A unique update for EMEA is the extension of OIP to named accounts. The programme has so far focused on new customers in the unnamed account space. Many partners said that once they had recruited a new customer they were not being rewarded under OIP for additional upsell and cross-selling.” To combat this issue, Cisco is now extending the OIP scheme to include the commercial named account space and will provide partners with the additional 6% if they manage to identify new business opportunities within this space that are not on Cisco’s internal forecasts.

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