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Cisco Services Rewards Open To Two-Tier Partners

Cisco Systems this week for the first time will begin offering rewards to two-tier partners that reach sales targets for the vendor’s maintenance services.

Through the new Pay for Performance program, initially available to Cisco’s top 250 U.S. partners that source through distribution, the vendor aims to boost lagging services sales among two-tier partners, said Liz Lawson, Cisco’s senior director of channels for Customer Advocacy, the services group at the San Jose, Calif.-based networking hardware vendor.

At issue is the relatively low rate at which Cisco’s two-tier channel—primarily comprising Registered or Premier partners targeting SMB customers—attach sales and renewals of the vendor’s maintenance services to product sales when compared to higher-level one-tier Silver and Gold partners, Lawson said.

The top 250 two-tier partners average a 44 percent sales and 62 percent renewal rate for offerings such as Cisco’s SmartNet maintenance services. By comparison, Gold and Silver partners reach average attach and renewal rates of about 70 percent, she said.

The result is that some two-tier partners are “leaving money on the table,” Lawson said. Cisco estimates that the unrealized annual services opportunity for that partner group sits at some $200 million.

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