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Cisco talks up channel collaboration

by Stuart Wilson, Thursday 10 April 2008

Networking giant Cisco has claimed that collaboration among channel partners contributes 31% of their sales. The results of the study were revealed during Cisco’s global partner summit in Honolulu. Cisco is doing its part to help resellers work together with the lauch of Partner Exchange, a network designed to help partners team up for projects.

The global study showed that there was a growing trend for collaboration between channel partners. Cisco claims that its Partner Exchange will help partners boost sales, extend their expertise and deepen their relationship with customers.

The study, which was commissioned by Cisco and conducted by Illuminas Research, polled more than 1,300 customers and almost 500 Cisco channel partners across 12 countries: Australia, Brazil, China, France, Germany, India, Japan, Korea, Mexico, Russia, United Kingdom and the United States.

According to the study, 31% of revenue for the Cisco partners polled was through collaboration and this was growing by 15% year-on-year. Cisco partners work with an average of eight other partners on a regular basis and 62% of resellers polled reckoned that collaboration will continue to grow over the next five years.

The Cisco Partner Exchange aims to help partners find, connect and collaborate with the right group at the right partner. The collaboration network is now available to more than 8,500 Cisco Certified Partners, managed-services providers, distribution partners and application partners from all over the world.

According to the study, customers now demand greater breadth and depth of expertise from resellers to match the greater complexity of solutions. Collaboration, building an ecosystem of partners and coopettition are becoming the norm as partners rise to the challenge.

Reasons to collaborate

The Cisco study came up with the following conclusions:

1. Larger Projects, More Revenue: Cisco partners who collaborate with others have developed deeper customer relationships and delivered more value to customers. Collaboration enables 78% of these resellers to win larger projects, 75% to acquire new customers, and 74% to increase their revenue.

2. Customer Satisfaction and Loyalty: Customers overwhelmingly report that collaborative resellers reduced the complexity of their IT business solutions. Customers also enjoyed the single point of contact with a partner versus working with the different vendors individually.

3. Broader and Deeper Expertise: Partner collaboration also helps resellers broaden and deepen their expertise and, as a result, differentiate themselves from their competition. Specifically, due to collaboration, 56% of Cisco partners witnessed improved levels of service; 78% achieved greater technical differentiation; and 66% improved industry-specific expertise.

4. Slow Adoption of Collaboration Tools: Despite the extent of partner-to-partner collaboration, surprisingly few partners are taking advantage of collaboration tools to work more effectively with other partners and customers. Only 33% of Cisco partners use web-conferencing tools, 20% use collaboration and document-management tools, 20% use project management software, and 15% use shared electronic calendars.

CE ANALYSIS: Collaboration, co-opetition and reseller ecosystems have been mooted as the way forward for the channel for many years now. Admittedly, delivering complex solutions typically requires best-of-breed expertise from multiple companies. To maintain control and maximise margin, the most important point for partners to focus on is ‘owning the customer’.

Customers do not want to see the complexity of the reseller ecosystem and typically want one point of contact – the famous ‘one throat to choke’. The reseller ‘owning the customer’ is in charge of establishing the collaborative relationships required to complete a complex project. While the IT industry likes to refer to it as collaboration, in many other sectors it is simply referred to as sub-contracting.

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June, 2020

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