Channel Searching Cloud for Moneymakers, Cisco's Goodwin Says

Partners see cloud computing opportunity but uncertain how it will pay off, vendor's top channel executive says. Company working to prep channel for as-a-service oriented business model while stepping up midmarket sales efforts.

October 14, 2010

D.H. Kass

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While channel partners clearly understand that cloud computing and the associated services-focused business model will have a major impact on IT delivery both near and long-term, many question where the money-making opportunities will emerge, said Keith Goodwin, Cisco Systems Inc. senior vice president, worldwide channels, in an IT ChannelPlanet Interview.

“The cloud is clearly top of mind for channel partners,” Goodwin said. “Partners get that the cloud and the new services consumption model will impact what they do going forward but there are big questions on the opportunity, how will money be made,” he said.

Goodwin, who is responsible for supporting Cisco’s global business with some 60,000 channel partners, said that the vendor’s recent restructuring of its channels organization reflects the company’s strategy to “embrace a broader set of partners in addition to our traditional ones.”

He suggested that up to two-thirds of Cisco’s channel partners are building out their services practices at various stages of involvement but offered that the vendor “wants our partners to grow to higher level services--consulting and managed services—to get ready to understand what’s coming with the cloud,” he said.

“We’re leaving it to the partners how fast they want to move down the services path,” Goodwin said. “About one-third are all over it, another one-third see it as an opportunity but are moving at a speed that allows them to gain experience along the way, and one-third are still skeptical.”

Vendor turns sights on midmarket

Goodwin said that Cisco now is targeting the midmarket in much the same way as it did small- and medium-sized businesses two years ago, when it systematically responded to criticism that it lacked a coherent and cohesive product strategy and channel approach to that segment.

Now it has tasked Dave O’Callaghan, Cisco’s recently appointed vice president, worldwide commercial sales, with mixing and matching successful go-to-market strategies from the vendor’s geographic segments to execute a working midmarket plan, Goodwin said.

“We launched a plan and a set of initiatives a couple of years ago with SMBs for a consistent, global go-to-market model that embraced new ways of working with partners,” Goodwin said. “Now we’re taking that upstream to the midmarket led by our channel partners,” he said.

Goodwin reiterated that Cisco’s recent makeover of its channel organization was the result of a long-range planning initiative—internally referred to as Partner Horizon—in which the vendor identified what it called “four strategic pillars,” or directives, namely, to promote channel investment, build global and transformational partnerships, accelerate commercial business and optimize its partner infrastructure.

He said that Cisco’s reordered partner organization will enable it to capitalize on the industry’s momentum towards IT delivered as-a-service, or cloud-based services.

“This is a new play for Cisco--we intend to become an enabler of IT-as-a-service,” Goodwin said. “There is tremendous change going on right now and our aspirations are to lead this market transition,” he said.

“We know how to lead market transitions and we know how to do that with our partners," he said. "We did it with voice and convergence over IP and now with market adjacencies like smart grid and smart, connected communities, for example—and while it’s difficult, there are huge benefits to leading,” Goodwin said.

TAGS: cloud computing,Cisco,partner,channel,midmarket

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