Cisco Targets Data Center Transformation

Vendor Prods Partners Toward What It Identifies As A $14 Billion Opportunity

Cisco executives took dead aim at the market to transform the data center at its annual partner summit this week, telling resellers it is evolving its channel program to allow them to build a network-centric data center strategy.

“The data center is a significant opportunity, and Cisco and its customers will rely on partners more than ever before,” said Edison Peres, vice president of worldwide channels. He added that transforming data centers into virtual environments will end up saving companies significant amounts of money and result in a $14 billion business for Cisco and its partners during the next four or five years. About $10 billion of that will be in hardware and the rest in services, according to Peres.

To accomplish this mission, Cisco used the summit as a forum for several related announcements. The company released the latest in a series of data center switches, the Nexus 5000. It announced its intention to acquire the remaining 20 percent of Nuova Systems, a start-up focused on the development of next-generation products for the data center. And Cisco rolled out a revision to its channel program that includes more technical and business tools for partners specializing in data center installations.

“Cisco and its channel partners are uniquely positioned to lead the transformation of the data center into an agile and efficient network that revolutions how our customers adopt new IT strategies and respond to changing business needs,” Peres added.

He said the new focus, combined with financial incentives, data center solutions and channel program enhancements, creates “an extraordinary opportunity” for partners to increase their growth and profitability.

Even so, the Cisco strategy will not be simple to execute for channel partners because it will require expertise not just in data center technology, but in virtualization as well. The latter is a growing but not yet perfected area of channel expertise. Company executives, including CEO John Chambers, are encouraging more collaboration among channel partners to accomplish the challenging task. However, it’s not yet clear how willing partners will be to collaborate not only with Cisco but with each other on such complex and elaborate customer installations.

Cisco executives acknowledge that data center transformation is not for every partner and that experience in networking, storage and server sales is a needed prerequisite.

To help entice such partners, Cisco also introduced a Data Incentive Value Incentive Program, which rewards partners who invest in the new business practice. The company also rolled out a business building platform that includes a step-by-step customer engagement model that helps partners sell, deliver and support advanced technology business solutions.

TAGS: services,server,virtualization,Cisco,Storage

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