Key changes in software licensing and agreements
In January 2015, the launch of Cisco ONE Software introduced a radically different monetization model for infrastructure software. Instead of requiring customers to purchase an assortment of features with each device, they could now purchase a single software suite prepackaged for a particular use case. By separating the software commercially from the underlying hardware, customers benefited from license portability—the right to transfer software licenses from one device to the next, instead of having to repurchase licenses with replacement devices. Finally, Cisco simplified customer licensing for Cisco ONE Software across their environment through the Cisco Enterprise Agreement. The market responded favorably, and over the past two-and-a-half years more than 20,000 companies, including 95% of the Fortune 100, have purchased Cisco ONE Software.
The move to software subscriptions
As part of its Intuitive Network launch last year, Cisco released a new way to license its core infrastructure software, through a subscription based model. This was made available on the Catalyst and Wireless platforms. The company also released subscription offers within its data center portfolio (e.g., Tetration, Enterprise Cloud Suite, InterSight). Over time, Cisco will transition more of its infrastructure portfolio to this model.
Cisco’s research shows that channel partners who lead with software see bigger deals, with 54% of profit coming upfront and the rest from follow-on services. Software also allows easier management of customer accounts and leads to renewal opportunities. Software-focused partners also receive more than $6 in services with every $1 in sales.
Tools, programs and services to help partners boost recurring revenue
To help partners ramp up their as a service revenue, Cisco and Ingram Micro developed several resources, such as:
Cisco Smart Account. Customer Smart Account enables users to manage and activate their licenses to devices, monitor license usage and track Cisco license purchases in Smart Software Manager (SSM). A Partner-Holding Smart Account enables users to temporarily deposit orders until the End Customer Smart Account is identified.
Cisco Impact and AutoQuote. Powered by data-driven automation, these tools and others can give partners entirely new capabilities and a leg up for capturing recurring, subscription and deferred revenue—and competing more effectively as market dynamics change.
Lifecycle Advantage. This program and tool set help partners land, renew and expand their businesses with customers by combining analytics, automation and personalized content to help digitally manage customer relationships. Partners who’ve participated in Lifecycle Advantage and other programs have seen their renewal rates increase by nearly 33% and upsell opportunities by 10%.
Reseller Services Portal (RSP). Exclusive to Ingram Micro, the RSP is directly related to Cisco Impact and AutoQuote, and it’s the perfect complement to the Cisco Lifecycle Advantage program. This free, online services-contract-management tool uses the information Cisco Impact creates to give partners visibility into their customers’ service lifecycles, simplifying the process of tracking maintenance contracts, warranties and leases (renewals and new quotes) and ensuring partners capture 100% of the contract annuity revenue available.
SuccessHub. This one-stop portal guides registered Cisco partners to establish a best-in-class customer success practice. Featuring a rich and comprehensive library of tools and resources—videos, webinars, white papers, playbooks, best practices and more—partners can learn how to build recurring revenue while creating long-term customer relationships.
Join Ingram Micro on Wednesday, Aug. 22, at 1 p.m. ET for a one-hour, instructor-led webinar, “Smart Enablement: The Evolution of Software Delivery.” Learn how Cisco will be delivering software, how this impacts you and how to get started down the path of Cisco Smart Account.