MaintenanceNet acquisition means non-Cisco vendors likely leave

Cisco acknowledges it acquired MaintenanceNet because it was uncomfortable with its longtime partner’s drive to sign on more OEM clients, and indicates that while Cisco doesn’t plan to fire those clients, it won’t have to.

Cisco_logo sliderThis week, Cisco announced the $139 million acquisition of MaintenanceNet, whose cloud-based software platform uses data analytics and automation to track, manage and renew recurring customer contracts. Cisco and MaintenanceNet were long-standing partners, but MaintenanceNet also had other customers. Cisco says that it does not have a policy of terminating those customers. However, they also acknowledge that they are likely to choose to leave on their own.

MaintenanceNet, which was established in 2004, became a Cisco partner in 2009 and that partnership gradually expanded to the point where it became a majority of MaintenanceNet’s business. Their core competency is Big Data and data analytics and they automate that data to capture information about annuity contract revenue opportunities, which is then forwarded to the customers’ channel partners as actionable items

“MaintenanceNet’s software identifies customers with service contracts that are coming up for renewal, overdue, or with products that are not yet covered,” said Debbie Dunnam, Cisco’s senior vice president for global customer success. “Their low-touch solution enables automated quoting, notifications, and, in some cases, ordering online. This helps Cisco partners capture high-volume and low-dollar sales opportunities that may risk being overlooked. This streamlined process enables services contract opportunities to be pursued quickly and efficiently.”

While there are other companies that provide a similar service, Cisco chose to work with MaintenanceNet because their platform is fully-automated.

“Other players in the market use a combination of automated systems with manual input to provide similar capabilities,” said Robyn Jenkins-Blum, corporate PR manager, Cisco.

Jenkins-Blum said that bringing MaintenanceNet in-house provides Cisco with several advantages.

“Today, the same renewal process is being used to quote and book a $2,000 order as a $2,000,000 order,” Jenkins-Blum said. “By acquiring MaintenanceNet, we will be able to further scale the work we’ve been doing with our partner community and apply these capabilities more broadly to help reduce costs using the automation processes that the MaintenanceNet software provides, and drive increased revenue for both us and our partners.

“We evaluated the cost and implications of building this capability in house, and decided that acquiring MaintenanceNet would accelerate our technology roadmap and be a seamless transition for our customers and partners,” Jenkins-Blum added. “We are known to the MaintenanceNet team as we have been working together since 2009, and feel they are a good cultural fit with Cisco and will augment our organization.”

Shortly after channel veteran Justin Crotty was hired as MaintenanceNet’s new Vice President of Global Sales this February, he told ChannelBuzz that they would not be satisfied until every OEM was a customer. That was not, however, Cisco’s vision.

“As MaintenanceNet began growing and adding new customers, it became clear that the needs of Cisco, our customers and our channel partners may not remain aligned with the needs of a broader, more distributed MaintenanceNet customer base,” Jenkins-Blum said. “The MaintenanceNet capability is increasingly strategic for Cisco, so securing that capability directly became a priority.”

Multiple distributors, including Tech Data, Ingram Micro and Comstor, also use MaintenanceNet in their own offerings, and it appears that those offerings, where they are centred around Cisco’s SMARTnet ordering solution, will continue.

“Several of Cisco’s key partners and distributors use MaintenanceNet as well,” Jenkins-Blum said. “We are aware of this, and are committed to a seamless integration throughout this process and on behalf of our customers. Cisco believes that this acquisition will make it easier for partners to do business with us.”

The future of other MaintenanceNet clients’ systems is much more murky.

“Although there is no immediate change to MaintenanceNet’s customer contracts, we anticipate that the announcement of Cisco’s acquisition may cause MaintenanceNet’s customers to consider alternative options,” Jenkins-Blum said. “We will work with customers to minimize disruption to their business and ease the transition.”