Cisco eyes lower enterprise agreement limit

Mark Hill, vice president of digitization, Cisco

Mark Hill, vice president of digitization, Cisco

DALLAS — Cisco will look to make its new Enterprise Agreement available to more customers by reducing the revenue commitment required to qualify, an executive told at the company’s annual Partner Summit here.

Introduced in June, the new Enterprise Agreement aims to both simplify the experience of buying the company’s software, and cover more of Cisco’s ever-expanding software lineup. At launch, the new EA had options covering the company’s collaboration, security, and Cisco One infrastructure software offerings.

Each of the suite areas had a revenue minimum attached to it for a customer to qualify for an EA — but the company is looking to reduce those minimums in the near future to make EAs more inclusive, said Mark Hill, vice president of digitization at Cisco.

“We’re deep in the throes of lowering that amount based on feedback from customers and partners,” Hill told “We’re looking at resetting the minimums so more enterprise customers can step up.”

In fact, the company’s ultimate goal is to make the EA attractive for all of the company’s enterprise and commercial customers. It just didn’t feel that it could start that way.

“We set the bar high so we could test the model, and make sure the processes work. Now we’re looking at ways to remove friction so partners can make it higher-volume,” Hill said. “We were conservative with the launch, but the volume is spinning up well, so why not?”

That removal of friction will be key if Cisco is to attain its lofty goals for EA. At the same time as it looks to improve volume by making it financially attainable and attractive to more customers, partners will have to be able to get deals at lower price points done more quickly and with more automation.

Hill also suggested that EA would be extended to cover additional areas, most notably today Internet of Things and analytics, although it would in the future cover all of the company’s software offerings. The company will also eye a “sister EA” structure for service providers, essentially extending the EA approach to cover utility managed service pricing.

There’s reason for optimism in moving more of the business to the EA structure. Hill said that in the four months the agreements have been available, the company has seen customers spending on average 25 per cent more than they did before being on an EA.

“When customers are purchasing multiple infrastructure areas, it creates a process for them — if they’re going to purchase an all-up agreement, let’s look at all the different groups that can be under it. It’s a vendor consolidation discussion,” he said.

Hill said he believes that spike in revenues for customers covered by an EA is sustainable because it represents a customer buying in to Cisco’s approach to solving some business problems.

“It’s not about ‘supply me six units,’ it’s bout moving quickly and acquiring the technology they need, but being able to change as their needs change,” Hill said. “That’s not new. That’s just what customers want, and we’re playing into it.”

In fact, Hill noted the company is just starting to see its first EAs covering multiple architectures. And in those deals, he said, partners are seeing that “the hardware pull has been even bigger,” suggesting the opportunity for further growth as the EA suite itself expands.

At the same time, Hill said Cisco is going to focus on further enabling partners in what is, for many, a new sales motion and model centered around software, annuities, and solution selling. But Hill stressed old skills aren’t being thrown out in search of new ones.

“We don’t want hardware sellers. We don’t want software sellers. We want networking sellers, whether it’s hardware or software,” he said.

Still, it’s the software side where more of the company’s partner base need to build their skills. Although, for many partners that have practices built around multiple vendors, those skill shortages may be easily solved by looking across the organization. For those multi-practice partners, Hill urges people on the Cisco side of the business to “go spend a ay or two on the other side,” on a practice built around a software vendor, “and see how they do it.”

Cisco will do its own part. Keeping with a major theme of Partner Summit, Hill said Cisco will look to simplify its communications, training, and enablement around software selling in general, and the EA model in particular.

“There’s a huge amount of information out there, but we haven’t yet brought it together,” Hill said. “We need a five-minute video and a ten-page document that covers the basics. Partner may have 100 questions after that, but they will get it. We’re going to build that.”