Last September, Cisco announced its latest Collaboration Flex Plan, Flex 3.0, with three goals:
- Accelerate—Incentivize the move from perpetual licensing to the Flex Plan with the end of sale (EoS) of perpetual calling, provide additional calling functionality and a streamlined transition process.
- Simplify—Deliver simplified quoting and ordering with fewer buying models and a consistent offer across cloud, on-premises and hybrid.
- Better together—Be competitive with aggressive pricing and better-together bundles (i.e., “packs”) for platform adoption and customer stickiness.
Cisco estimates there are 32 million Software Support Service (SWSS) licenses that need to be migrated to the new flex model, representing 28,000 customers. Additionally, two-thirds of those licenses are up for renewal in the 2021 fiscal year, affecting nearly 80% of Cisco’s customers. Partners who transition their customers to the new licensing model can expect longer-term recurring revenue. Cisco reports that Flex customers’ average contract length is 43 months compared to SWSS customers’ 24-month average.
The opportunity is significant, but so is the collaboration competitive landscape. If your customers feel pushed into something that costs too much or doesn’t meet their business strategy, they can easily move to another offering. Here are a few highlights about Flex 3.0 as well as tips to help you transition customers seamlessly and minimize churn:
- Flex 3.0 doesn’t mean “cloud only”—Yes, it’s true that the last day to purchase Business Edition 6000 licenses and SWSS is just a few months away (July 24, 2021). But, on-premises and hybrid calling plans aren’t going away. Cisco is only changing how customers buy technology.
- Enterprise Agreements (EAs) are getting easier—There are no longer multiple tiers for EAs; there’s just one. EA customers (i.e., 250k+ users) can choose Calling, Meeting or a Calling plus Meeting pack (which includes additional financial incentives). EA entitlements have also been simplified; they’re now given upfront. Additionally, Cisco added a new programmatic ramp for Calling that eliminates the need for a letter of agreement (LOA) as well as account manager and legal approval. It’s all been automated.
- There’s more flexibility for Named Users (NU)—To eliminate the hassles associated with delayed stop accounting (DSA) and custom pricing, Cisco simplified its NU Calling offers with three tiers: Professional, Enhanced and Access. It also offers a Calling and Meeting pack, which gives customers a 20% savings.
- Get competitive pricing across the portfolio—Cisco is offering partners a 37% list price reduction for NU Webex Calling and 25% for EA Webex Calling offers as well as 22%+ (on-prem) and 14% (UCM Cloud) list price reductions on EA and NU plans. Plus, NU Meetings are now 38% off list price. NU and EA customers who commit to three-year subscriptions can earn an additional 12% discount.
“Flex 3.0 represents a significant opportunity for our partners,” says Chris Heinrich, Cisco senior technology consultant at Ingram Micro. “Not only are the new annuity licenses competitively priced, but Cisco factors in customer expansion. For instance, the EA licenses including 20% growth allowance, which allows customers to add new users at no additional cost. Additionally, there’s a separate 50% common area growth allowance built in. This allows customers to add phones, video equipment and analog devices such as fax machines in conference rooms and other common areas not associated with an individual user without raising their licensing costs.”
To learn more about transitioning your customers from SWSS to Flex 3.0, contact your Ingram Micro Cisco solutions sales executive or visit the Cisco Flex University
community page to view and download several on-demand resources.