The significant expansion of the cloud marketplace business has led Cisco to make changes to its support of partners in this area, as they look to do business with the commercial market that learns from their hyperscaler business.
Cisco recently held a focused briefing for analysts and press, part of a series of ‘In-the-know with Cisco’ quarterly briefings they have been offering to provide a deeper dive on specific aspects relating to Cisco’s business. This one looked in some detail at how Cisco and its partners are collaborating to scale software and service sales through Cloud Hyperscalers and Marketplaces. A major theme of the briefing was emphasizing how this route to market has turned from a comparatively small route to market into a very significant one for the company. It has been significantly impacted by the recent change in which the Cisco Partner Sales organization took over routes to market.
“The cloud marketplace business is growing,” said Oliver Tuszik, Cisco SVP, Partner Sales and GM. “We have 88% growth forecast through 2025, and we expect that it will be 50% of our revenues by 2025.”
In addition, Tuszik highlighted growth that extended beyond these core numbers.
“The Cisco cloud co-sell growth rate is over 400%, and more offerings will be available on the marketplaces,” he noted. Meraki is posting 48% growth here. Enterprise switching is in double digits, with switching being 12% and routing being 16%. We see demand in the SMB segment growing faster every year – at 34% year-over-year through Q4.
“We no longer call these a transformational project,” Tuszik said. “With cloud marketplaces, it’s now more about performance. These are already big, growing areas.” No services are on marketplaces today, but these are on the roadmap for next year.
That growth has been reflected in how Cisco handles their Go-to-Market, with some important changes being implemented earlier this month.
“The company has added more responsibility to the partner sales organization with its’ now owning routes to market,” Tuszik stated. “Co-selling is an important sales motion – though not a real route to market.”
Tuszik highlighted four changes that this process has had in how Cisco has adjusted its routes to market.
“First, we have made it easier for partners to use automation of our APIs,” he said. “In addition, the changes to the sales motion requires different incentive systems in how we pay our salespeople and partners. We have account managers in their classic role, but the partner plays a more important role now, especially in managed services.”’
Tuszik said that new sales plays have been another innovation.
“We educate and training people on how to sell to certain segments and solutions,” he pointed out. We also focus on new co-sell and co-creation motions, to sell and create offers in a different way.”
Nick Holden is VP, Global Strategic Partners and Co-sell, who runs the strategic partner group, which since the new changes to the Partner Go-to-Market also includes the co-sell function.
“This includes people who add value, but who don’t necessarily have direct transactions with Cisco,” he said.
“We see that the way the commercial market has bought has changed,” Holden noted. “The multi-year consumption commitments like the hyperscalers get make us committed to delivering cloud native solutions present in the hyperscaler environment and providing more techs in the marketplace environment. We want to do this marketplace commitment through our existing existing routes to market – channel partners. They optimize the cloud migration lifecycle , define workflows, identify the right applications for both the cloud and on-prem, provide consulting, professional and managed services and deliver the right business outcomes in partnership with Cisco.”
Holden said that Cisco has a dedicated team for building out Cisco’s co-sell strategy on several models.
“It depends on the partner type,” he said. “For those who have a programmatic model but who don’t necessarily sell our technology themselves, the issue is how do we become more attractive to software companies like this to bring their value into our selling motion, and bring our value to them. This includes small ISVs and consultants as well as hyperscalers.”
This part of the Go-to-Market motion is still being developed.
“We aren’t at scale yet, to be candid,” Holden said. “This is a new motion for us. But we are peeling back the onion every single day, and we have a roadmap of operational requirements. Jason Gallo is working with our business units to make sure we are building the right assets.”
Gallo, VP of Partner GTM Acceleration, also indicated that Cisco properties Intersight, AppDynamics and ThousandEyes are all already on AWS.
“This will be expanded to others, ensuring that Cisco will continue to discuss hyperscaler marketplaces as a purchase option,” he said.