DALLAS – At the 2017 Cisco Partner Summit, Cisco Systems launched the Migration Incentive Program (MIP) as part of a new round of channel initiatives along with a streamlined deal registration plan.
MIP has been created to provide solution providers an added incentive to migrate customers from legacy or non-Cisco equipment to an advanced technologies and intent-based networking. MIP will have new margin incentives on hardware, software and services. With this new program, Cisco has retired the old Technology Migration Program that was first introduced back in 2005.
Marc Surplus, Cisco’s vice president of strategy, planning and programs, said MIP aids in the company’s strategy around building new capabilities with partners, giving the channel an incentive to refresh and to move towards new lifecycle and recurring revenue streams.
“The base needs to be refreshed. IDC says 50 per cent want to automate and this means for us that 50 per cent of our customers want to refresh,” Surplus said.
In an attempt to become quicker to market, Surplus said Cisco had to massively cut down from 15 hunting and teaming programs in deal registration down to just two. The goal is to speed up the approval process and allow the channel to focus on selling instead of managing the deal registration program at Cisco.
“Partners can now respond to questions and our techs will figure out the discount instead of them. This is a serious move from us in terms of trying to refresh the base. The back-end rebates will help get the gear returned to us in an environmentally sound way. This is going to keep the gear off the gray market and get it properly disposed of,” Surplus said.
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Cisco, who has a track record of publicizing its margin incentives, did not want to release that information for MIP.
Sandra Flinders, Cisco’s senior director of partner programs, said the company did not want to get into specifics for MIP but did say that MIP can be layered on top of the OIP (Opportunity Incentive Program) and the TIP (Teaming Incentive Program). These will all be stackable incentives that can lead to a significant amount of discount on top of the standard discount.
Flinders added that through deal registration if the partner is doing account breakaway they will get incremental margin through the VIP (value incentive program) program on the back end. “The intention here is to make it easier for partners to get a special deviated price on every single deal. And, we want to protect those deals,” Flinders said.
One channel source close to the situation told CDN that Cisco is assuring partners it would be in the double digits. And, for the Canadian market those deal can start as low as $50,000.
Cisco Canada channel chief Mark Collins said the process for Canada will come down to communicating to partners they need the training on all these new tools. “It goes back to simplification in the system and the partner feedback I get is that they love the fact we have never wavered from making them profitable,” Collins said.
He added, the one portal systems will give partners a path to find the upgrade and get an offer back all in a single transaction.
VIP will get a boost in the way of two new incentives for Lifecycle Management specific to software-based networking.
There will be a VIP activation increase as a back-end rebate for Cisco ONE and Digital Network Architecture (DNA) Advantage.
Finally, partners should look for a new VIP Annuity in enterprise networking and data centre for solution providers who are going to market with a recurring revenue model.