Any self-respecting channel vendor will loudly and proudly advocate the power of the partner and the importance of the ecosystem -- viewed as 101 in an industry crammed with competition and overflowing with new routes to market.
But for Oliver Tuszik -- having been on the other side of the fence for more than a decade -- such a statement goes beyond mere marketing rhetoric.
“We are in the age of the partner,” outlined Tuszik, speaking as senior vice president of Global Partner Sales at Cisco.
Because as the light at the end of the COVID-19 tunnel starts to shine, customer requirements continue to evolve at pace with growth the order of the day and transformation the name of the game. Yet the path to prosperity isn’t a clear one given ongoing supply chain issues, economic turmoil and the war in Ukraine.
For partners, a perfect storm of opportunity and strife is circling without delay.
“The role of the partner is changing,” Tuszik added. “Of course, it has been changing over the past 20 years but now it's more radical than ever before. The logic of the market -- i.e. the relationship between buyers and sellers and how pricing works -- is completely changing.”
Tuszik observed that the reason the role of the partner is evolving and becoming more important is because customers are demanding less complexity. Instead, organisations want flexibility and agility to allow teams to focus on creating business value.
“Customers lack the time and capacity to build up internal IT infrastructure,” he explained. “Instead, they are looking for outcome value and for partners to take away the complexity of managing multiple product groups.”
And perhaps that’s the salient point here. Vendors asking partners to change is nothing new, but now, customers are driving the shift in approach.
“I believe it’s the best time to be in the partner business,” Tuszik declared. “It will be tough but it's better to be tough in a growth environment than having a tough time in a shrinking environment.”
As the ecosystem evolves in response to fluctuating market dynamics, the decision-making power of the partner with regards to the products and services they sell is also changing in parallel. Now, the question of whether partners and customers place more value on product quality or brand loyalty comes into play.
For Tuszik, in a buyer and seller relationship, “trust is very important” with Cisco’s partners and customers continuing to rely on “reliability and predictability".
“Customers and partners still tend to buy from a brand that they can trust, and trust means we don't let them stand alone in the rain,” he clarified.
In this area, Tuszik acknowledged that Cisco -- fresh from appointing Courtney Dodds as channel leader across Asia Pacific, Japan and Greater China (APJC) -- has a strong hand to play with more than 25 years of brand loyalty linked to servicing customers via the channel - “partners are in our DNA”.
But Tuszik accepted that despite such ties, the balance of the scale has tipped away from the vendor and customer in favour of the partner when selecting technologies.
“The decision of which product is shifting a little from the customer's side to the partner’s side,” he noted. “But it’s less about the best product, rather the best management platform.
“Because at the end of the day, it's not about Cisco or about the partner. The only one who's making the final decision is the customer and together on this path -- and even more so in recent times -- this is a joint approach.”
Supporting growth hungry partners
While Cisco has always relied on a strong partner-led strategy which has become a cornerstone of ongoing market success, Tuszik is refusing to rest on his laurels in the months and years ahead.
Specifically, the vendor’s commitment to bolstering its partner ecosystem remains evident in recent activity such as a partner program refresh -- under the banner of New Cisco Partner Program -- which forms part of a channel overhaul designed to simplify go-to-market engagement.
Also, investment is ramping up to bolster lifecycle and customer experience offerings, alongside establishing new routes to market and cloud marketplaces.
Delving deeper, managed services capabilities are being strengthened while software subscription adoption continues to accelerate and cross-architectural specialisation uptake increases.
In other words, Cisco has built an extensive arsenal of capabilities to support partners in dealing with changing customer demands. The next step? “Simplify it, scale it and make it available across the globe,” Tuszik noted.
Another significant area of partner enablement is the enhancement of training and certifications and more notably, making such offerings “fully available via online training and online certification” programs.
One such program is the Cisco Black Belt Academy -- designed in Asia Pacific and launched globally in 2019 -- with the aim of teaching direct and partner sellers “the skills they need to have richer interactions with customers, interactions that ultimately lead to selling the next wave of digital transformation solutions”.
And such focus is playing out in the Black Belt Academy numbers with over 7,000 partners and distributors, plus 44,000 account managers and engineers, completing 95,000 certifications and recording over $900 million in sales and pipeline creation during FY21.
According to Tuszik, the roll out of such programs represent “a great success” and highlight that “partners are moving up the stack” as they expand skills to support an entire sales lifecycle.
“The aim is to provide significant competitive advantages for customers who need less complexity and more outcome value,” he added.
Overcoming supply chain woes
As plans to build and maintain partner relationships play out, the elephant in the room however remains the impact of ongoing supply chain issues on partner pipeline and growth.
With product availability an ongoing challenge, Tuszik analysed that this factor is “not the only or most important, but it's an additional part of the equation” for partners during the vendor buying process.
Tuszik cited a lack of logistics capabilities and COVID-19 constraints diminishing production capacity as the main reasons for shipment delays, as well as the recent lockdowns in China which added further market uncertainty.
As reported by Channel Asia, issues around supply chain -- often driven by semiconductor shortages -- remain the top concern for most industry sectors despite the pandemic slowing down.
According to Avnet Silica research -- which is based on a study and review of 30,111 earnings call across different sectors between January 2018 and April 2022 -- supply chain issues occupied more than 60 per cent of airtime in earnings calls across all industries in 2022, compared to just 47 per cent and 37 per cent in 2021 and 2020 respectively.
Tuszik emphasised that Cisco is aware of the pains that partners feel and described proactive steps that the vendor is taking to address such shortages.
“We’ve put in additional focus and we've been very creative on finding different ways to source and to produce,” he explained. “We built up new product designs to handle challenges in the availability of components in the market.”
In addition, Cisco is helping to ease the burden on partners by ensuring all payment mechanisms are via credit lines. Despite the challenges, Tuszik is cautiously optimistic that the market will overcome the supply shortages and maintains a positive outlook for partners in the months ahead.
“They have a backlog that will keep them working for the next year,” he noted. “The reason why we have the supply chain challenge is because there is an increased demand for these kinds of services and solutions. So, I think we should celebrate the positive while also dealing with the negative side of the equation.”