Cisco CEO Chuck Robbins told IT professionals that now is the time to build out more robust technology infrastructures to prepare for whatever comes next during the Cisco Live 2020 digital event. Oliver Tuszik, senior vice president of Cisco's Global Partner Organization, mirrors that sentiment.
The COVID-19 pandemic has upended plans, projects, budgets, and requirements for most businesses around the globe. Digital transformation is no longer a goal on the horizon, but a requirement. Solution providers were busy putting out fires at the start of the pandemic to get their clients up and running from home, but now, several months in, the channel should be looking at long-term opportunities for growth in the new normal. These opportunities, Tuszik said, will include managed services and everything-as-a-service.
Tuszik, during Cisco Live, virtually sat down with CRN USA to talk about the firm’s focus on flexible consumption models, how partners can turn free trials of Cisco security and collaboration solutions into new revenue streams, and where business recovery begins in a post-COVID-19 world that has resulted in a global economic downturn.
Here are excerpts from the conversation.
Cisco has been talking a lot about the future. Are partners in a place where they can now focus on longer-term opportunities that are emerging on the other side of COVID-19?
I've been talking about preparing for the new normal. The fact is, the new normal is here. It's not waiting -- it's still shaping -- but it's there. It's great to see that not only have we as a company, together with our partners, have adapted, but it's kind of positive to me how good we were as human beings and companies to adapt to a completely changing situation. We're doing meetings from our home office and it no longer feels artificial or wrong. No one said: "Let's wait for the new normal," We immediately jumped in.
We started with a prompt response and then we shaped it to serve new demands. We helped [partners] get the home office securely connected. You may remember my "perform and transform" story. Perform was mainly about higher automation and digitization, and this is what is going on right now. We're helping [partners] run their business in a more automated way because they don't sit in an office next to each other anymore and they can just ask colleagues next to them how they handled a situation. We're helping them use the tools and increase the power of the tools. This is what our partners need right now and not because they are all remote. This is a tough time when it comes to margin and profitability. Wherever we can help them increase productivity -- that's key. "Transform" is still the same -- it was mainly about addressing new buying centers and as a service [offerings]. We are now talking about Cisco-as-a-Service. Think about the entire portfolio - if an end customer wants to buy it in a different way, how can we give them whatever Cisco offers in an as-a-service model, together with our partners? When we talk about managed services, we might talk about high-end, full-capsulated managed offerings, but it starts with integrating a simple switch into a managed offering. We are working on making it easier for partners to bundle it into their existing management system to have a flexible consumption model they can offer.
Are customers who took advantage of the free trials of Cisco Webex and Cisco's security solutions starting to become profitable for partners?
Webex is growing -- [adoption] is three times higher. A big chunk of this [user base] just started to use Webex over the last three or four months. Some of them are using the free trial, which, in a sales process for our partners, is a very important starting point because the customer has the product and is using it. How do you turn a free trial into something that generates revenue? Very simple. Create an amazing customer service. Partners need to be close with their customers and help them get all the benefits from Webex, and by the way, it’s the same for the security solutions. Then, when the free trial runs out, it's not a question with the customer of "should I renew?" It will be; "how big should my subscription be/Should I connect everyone?"
We have a big campaign that we started internally, along with our partners, to really push our collaboration portfolio. We take all the free trials and share that information with partners and ensure that we approach customers, and not just in a simple "how would you like to pay?" approach, but we want to help [customers] get the maximum [benefits] out of these solutions and give our partners an amazing chance to upsell. We have a huge amount of new customers that haven't used Cisco solutions before, and with this [COVID-19] situation, they were looking for stable, secure, high-end solutions, and this is clearly our strength. This is what we want to be. We want to be the solution for these kinds of demands. We will not become a consumer brand, to be clear.
Did the COVID-19 pandemic speed up the shift to the Everything-as-a-Service consumption model?
I believe COVID-19 and everything happening around it brought the last remaining reluctant companies to the kind position where they realized they need to have a more flexible, agile environment to handle such a situation. COVID-19 showed us all what would happen if our supply chain wasn't working, if our teams couldn't work in the usual environment and [that] all the ways we engage and interact with partners and customers wouldn't survive in the old world. COVID-19 -- and I don't want to say anything positive about it -- but based on calls I've received from partners -- [I'm hearing them say] "thank you, you pushed us so hard to build out an agile and secure environment to connect our people wherever they are because we were ready to move everyone to the home office in a weekend. There's other partners calling and saying "You're right, we need your help right now. I need a secure home office solution for 70,000 people in a week." We see from partners the demand for change projects. It's about ‘How can I work as a company when I can't see half of my customers and partners?’
What is the biggest challenge partners are dealing with right now?
It's different by regions … but companies are reopening, and they are looking for ideas to create a different, more secure -- especially in regard to health -- environment. Old business models are dying and it's about how fast and flexible you can be to manage through this change.
It wasn't the same kind of crisis, but I think back to the financial crisis. I believe there are two things that are absolutely essential. The first one is manage your team. Be there for your team. Uncertainty can create a lot of side effects. This is a time where people-management is the most important thing. People managers are normally overpaid in good times -- it's pretty easy and you don't need that much during good times to be a good people manager. But in these times of uncertainty -- talking about no bonuses, possibly unemployment, etcetera -- this is a time where it's so important to lead your team and show your vulnerability through all these changes. We see a lot of partners doing an amazing job of finding the balance to be there for their employees and taking care of the people around them and helping their local communities. They also have been still performing and transforming their companies. They all need to find out how they can stay stable through the next six months with lower bookings, revenues and profits. You need to be very close with your CFO to make sure you can manage through this crisis. But there is still demand -- it's not like customers shut off their IT. The demand is different, and it is less, but it’s about serving the demand and getting your share of the business that is still in the market. Then, you need to focus on the next six-to-12 months and the new world -- the new normal, which is here right now. You make a plan and review it every month because the world around us is changing so fast. Your assumptions can be completely wrong, so work as a startup instead of an old-style company that makes three-year plans. Make an assumption, make a plan, and be very ready to change.
What's your message to partners heading into the second half of 2020 and, hopefully, a post-COVID-19 landscape?
First of all, our partner strategy didn’t change. We are partner-committed and we still want to perform and transform together and continue to help them own their edge, which has become even more important right now because it's about how you differentiate in the new normal. Whoever is ready for these new demands will be in a very strong position. As [Chuck Robbins] (pictured) said, we are not only going to continue with our strategy, but we are also adapting our portfolio. There will be new offerings and easier ways to go to market and we will continue to continue to invest in digital marketing. Keep in mind, we're not doing nice events where we're meeting our customers and partners for dinners [right now] and I can't remember in the last 25 years a time where that didn't happen for four months. So we need to adapt to these changes, and we will. We are changing our programs. The good thing is, we had this digital motion in our marketing and lead generation, and we are improving.
Last, but not least, this has been said pretty often, but it's true: There is an opportunity if you find the right balance between perform and transform, especially for companies in the IT industry, which includes a lot of our partners. I believe most of our partners will be able to manage though this difficult situation and prepare for the new situation. We have a chance to come up even stronger. It will take time and it will be hard work, but we'll be stronger in the future together.