Cisco Plans to Spend up to $30B on Midmarket Tech, Services by 2016

Geek Speak

Cisco announced during its Partner Summit this week its intentions on a renewed focus related to the midmarket enterprise segment…basically end users with

100-1,000 employees. According to a blog post yesterday by Andrew Sage, Cisco’s Vice President, Worldwide Partner Led Worldwide Partner Organization, the company is officially turning the spotlight on this segment. “With 1.4 million midsize businesses – which we define as companies with 100-1000 employees – spending an estimated $25 billion on technology and $30 billion on services by 2016, we know this is the right market to focus on with our channel partners,” he said.Sage also noted market trends such as mobility and cloud, which have increasing IT demands and limited resources. Many have the same demands, but not the resources that would be found, say, within a larger company. “They have many of the same needs as a big business, but smaller IT staffs and budgets to meet them. To remain competitive, mid-sized businesses need to be able to evolve quickly to address today’s business challenges and prepare for the future,” he said. “This is where Cisco and you, our channel partners, can help.

According to Sage’s blog, Cisco is planning to help partners focused on the mid-market segment by doubling our incremental investments in Partner Led resources, incentives and programs to $150 million in FY14. “What you’ll see from this investment is continued improvements to our Partner Plus framework that will allow you to evolve your midmarket practice and remain competitive,” he said. “One example is that we are increasing Virtual Engineering capacity for Partner Plus partners by 100 percent. That’s a lot of new pre-sales support available to help you close deals. We also recently introduced the Winner’s Circle an exclusive retreat for your highest performing partner sales reps in recognition of their outstanding contribution to our growth together.

Steve Hilton, lead analyst with Analysys Mason, feels that the midmarket push will help Cisco gain additional partners in the long term, and will renew its focus on this important niche. “Cisco will leverage its success over the past 5 years in SMB/SME (small and medium enterprise) markets to find success in the midmarket,” Hilton said. “Its focus on architectures (more holistic solutions for enterprises) will be a benefit to midmarket enterprises that are looking to have business solutions, not just technology products.”

During the partner summit this week, Cisco also made announcements regarding portfolio additions leaning toward a new cloud managed networking product portfolio, a new switch, and a new smart solution for server virtualization. Note the new additions, in detail, below:

· Cisco Meraki Managed Services Dashboard: With Meraki, a new cloud managed networking portfolio and a new Managed Service Dashboard, partners will have new recurring revenue opportunities with cloud-hosted management, security appliances, switches and wireless access points. The Cisco Meraki Managed Services Dashboard is a new tool from the company’s recent acquisition of Meraki that enables managed service providers to profitably grow their midmarket offerings and allows traditional VARs to rapidly introduce new, profitable managed services.

· Catalyst Switches: The new Catalyst 2960-X switches advance the breadth and depth of our switching offer for customers. The switch provides enterprise class scalability (2x previous gen), higher port density (8 stacking units), enables new BYOD, next-gen workspace, SDN-ready services, and reduces TCO with smart operations and best in class energy efficiency. This is the greenest Catalyst access switch ever built.

· Virtualized Foundation Smart Solution: The Virtualized Foundation Smart Solution leverages Cisco’s strength in networking to help our partners capitalize on demand for server virtualization with midsized customers. The solution helps contain costs and accelerates new application roll out by enabling on-demand provisioning from shared pools of physical and virtual resources.
Sage also discussed the fact that Cisco is committing to generating $1 billion in sales-qualified leads through partner marketing in the next fiscal year. “Using integrated global marketing programs that include a focused set of demand generation activities designed to help customers move from interest to purchase, competitive promotions and smart solutions, we will help build and accelerate pipeline in key focus areas like BYOD, Data Center and Collaboration,” he said.