Cisco Partner Summit 2022 kicks off the Age of the Partner

This syndicated post originally appeared at Zeus Kerravala – SiliconANGLE.

Cisco Systems Inc. held its annual Partner Summit this week in Las Vegas, bringing together thousands of global partners to exchange ideas and learn about the networking giant’s most recent innovations. Cisco has one of the largest and most diverse partner ecosystems in the information technology industry, with about 90% of the company’s revenue flowing through its partners from more than 150 countries.

The event returned to an in-person format for the first time since 2019, which is crucial for this event. Some events are fine done virtually but partner relationships for all vendors, including Cisco, requires a high level of engagement and that can’t be simulated virtually.

The keynotes were kicked off by Cisco Channel Chief Oliver Tuszik, who proclaimed this to be “the Age of the Partner.” Given it was a partner event, a statement like this is meant to pump up the troops, but there is validity to his claim. Deploying and running technology today is significantly more complicated than it was in years past. Some of this is driven by the shift to hybrid work, but the bigger impact is the distributed nature of IT.

Corporate technology used to be deployed in nice, neat silos where resources were limited to a specific domain. Inefficiency led to simplicity because if I needed more resources for one app, I couldn’t take it from another. The cloud, virtualization, software-defined resources and other trends have allowed the industry to decouple functions from hardware. Now we have resources scattered everywhere, leading to much better utilization and efficiency, which has a direct impact on user and customer experience and improved agility, but leads to higher complexity.

Take the wide-area network as an example — an on-premises router connected a branch office to the company HQ using MPLS. It’s a very simple design and about 80% of companies managed this in a “do it yourself” model. SD-WANs use broadband software systems that can be on-prem, in the cloud, at the edge or even on a user device.

This has created a rise in security tools also moving to software and the cloud. The situation is far more complex and has seen a significant boost in managed service demand, putting the partner in a much more strategic position.

Another interesting transition for IT is that chief information officers are now having to make decisions on what technology to purchase 18 months to two years from now because of supply shortages. Although there are signs that things are slowing returning to normal, buying with future needs in mind may become the norm. One way of ensuring products remain current is to use a managed service, since the service provider can build once and serve many, again putting the partner in the catbird seat.

For Partner Summit, Cisco made several announcements, most of them focused on helping partners maximize their opportunities. One of the big areas of focus was innovating in the security portfolio because it presents one of the biggest needle-moving opportunities for Cisco and its partners.

Most of the major industry trends, such as hybrid work and cloud, have created tighter coupling between the network and security, which theoretically have given Cisco security a boost. Although some of Cisco’s security competitors have used this trend to move into security, Cisco has seen marginal uplift, but the company has been busy integrating security into the network, making it easier for partners to attach to the network. Given the size of Cisco’s network installed base, this is important to minimize the amount of friction in the sales process.

The company announced new capabilities across three key categories: zero-trust security, network security and secure connectivity. In a pre-briefing with analysts, Jason Gallo, vice president of Cisco’s global partner organization, said Cisco takes a specific approach to designing products in those categories, which must meet five requirements for security resilience:

  1. Enabling customers to see more by providing telemetry and various open source elements.
  2. Anticipating what’s next by adding actionable and predictive insights to the portfolio.
  3. Prioritizing the actions of risk-based scoring and continuous trust assessments.
  4. Closing the gap with application programming interfaces and integrations for partners.
  5. Simplifying the security operations experience through optimization and automation tools.

In the category of zero trust, Cisco provides secure access via Duo Passwordless Authentication. Among Duo customers, biometrics have been enabled on 81% of mobile devices. The findings come from <Cisco’s 2022 Duo Trusted Access Report, based on roughly 1.1 billion monthly global authentications across more than 49 million devices and 490,000 unique apps. Duo is now available for all customers, who can use their biometric-enabled mobile devices to securely log in without a password. Cisco is simplifying the authentication process for users, while decreasing the risk of phishing attacks.

Cisco has also enhanced its data loss prevention or DLP capabilities in Umbrella, a foundational component of Cisco+ Secure Connect, which is the company’s solution for secure access service edge or SASE. With this enhancement, Cisco aims to make security frictionless for hybrid work by analyzing outbound web traffic and controlling sensitive data within the organization. The DLP capability will initially support Cisco WebEx, Google Drive and Microsoft 365, with support for other apps coming soon.

“All of this demonstrates that we’re making progress towards building out the Security Cloud (an integrated experience for securely connecting people and devices to apps) and bringing our customers closer to true security resilience,” said Gallo.

In addition to security, Cisco reinforced its commitment to applications and announced an API-first strategy. The company is rolling out backward compatibility to ensure that APIs continue working with every release version. Furthermore, there is a new open-source project called API Insights, which will help developers and development, security and operations or DevSecOps teams on GitHub track and improve API quality.

“Some of the announcements are more of a continuous flow of news and changes,” Gallo explained. “The focus is shifting to ongoing innovation and making the entire portfolio more modular, more standardized and easier to deploy.”

At the event, Cisco also made an announcement geared specifically toward partner programs. Cisco introduced six new solution specializations that are tied to key priorities in Cisco’s strategy: full-stack observability (reimagining applications), hybrid work, SASE (securing the enterprise), and hybrid cloud networking/computing/software (transforming the infrastructure). They’re designed to be lightweight, applicable to all routes to market, and customer-relevant, said Gallo.

Cisco is evolving its specialization strategy to reflect changes in the market. First, the specializations will showcase partners’ unique capabilities at the solution level, not just the broader architecture. Second, they will allow partners to bring their broad architecture knowledge to meet specific customer needs. Third, they will provide partners with more flexibility. Lastly, partners will have to earn the specializations as they successfully deliver solutions, rather than completing exams or taking training courses.

The approach that Cisco is taking with partners is not just making their technology available to customers but curating it in a way that’s specific to the partner’s business model. Cisco is betting that the momentum behind managed services continues, and it has created new offers together with its provider partners.

Cisco will be aligning incentives to all of the specializations beginning in the second half of its fiscal year. On top of that, Cisco will be offering a 50% higher payout to those that sell SASE, SD-WAN, and full-stack observability as a managed service from a partner, according to Tuszik. Historically, Cisco has been good about adjusting its compensation to align its sales motion with partner programs and the boost in payout for managed services is a good example.

“We have dramatically shifted our incentives from just selling,” said Tuszik. “You make much money as a partner when you adopt, expand, and drive the customer experience, and at the end, come to a renewal. You get a certain level of protection, so that your investments pay off.”

My final thought from Partner Summit is that Cisco remains partner-first. It seems every year I hear Cisco watchers claim that Cisco is trying to steal business from its partners. Some of this comes from a misunderstanding of why Cisco does certain things.

As an example, when Cisco rolled out lifecycle services, some industry people looked at those as competitive to the partner community, but Cisco is using them to complement its partners. Partners can choose to sell their own or augment them with Cisco’s, but that’s up to the partner.

Cisco makes products, but it needs its partners to deliver its value. At the event, Cisco Chief Customer Experience Officer Thimaya Subaiya summed it up best when he said, “There is no Cisco without our partners.

Author: Zeus Kerravala

Zeus Kerravala is the founder and principal analyst with ZK Research. Kerravala provides a mix of tactical advice to help his clients in the current business climate and long term strategic advice.