There’s a reason billions of private equity dollars are pouring into managed service providers these days. It’s the same reason Cisco is making big investments in MSPs.
“We’ve seen a tectonic shift in how IT is consumed and delivered in the last couple of years,” says Alexandra Zagury, the vendor’s vice president of managed services and as-a-service sales, in a conversation with ChannelPro at this week’s Cisco Live conference in Las Vegas. “Customers are saying that they don’t want to manage the complexity around IT. They want somebody else to do it for them.”
They also want to pay for that support and the technology being supported on a subscription basis, she adds. “More and more customers don’t want to own the asset.”
Cisco sees a giant opportunity in those converging trends. “By 2025,” says Zagury, quoting an in-house market study, “about 45% of Cisco’s total addressable market, which is equivalent to $113 billion, will be sold as a managed service.”
Hence the decision roughly 18 months ago to create the team Zagury now leads and task it with readying Cisco’s products and partners to grab an outsized share of that spending.
“We help MSPs of all shapes and sizes build services based off of Cisco, and then we help them sell it with our field,” she says.
It’s a big, complex job that impacts almost every part of Cisco’s org chart. “It requires us to think about how we engage customers with our partners differently, how we build our technology differently, how we do our programs differently,” observes Zagury.
Her strategy for completing the mission revolves around what she calls “the three Ps”: platform, preference, and performance.
The platform piece of the formula involves ensuring that Cisco products are “managed ready.” Drawing on input from partners, Zagury’s team has identified “minimal viable partner requirements” for various solution categories, some of which will come as no surprise to MSPs.
“We’re really looking at how we close the gaps on multitenancy,” Zagury says.
The second P, preference, is about recruiting current and aspiring MSPs and arming them to sell managed services alongside Cisco. Zagury has hired a substantial team of people to drive that effort in areas ranging from enablement to marketing to offer development.
“We’ve tripled the amount of people we have doing service creation with our partners,” notes Zagury, who has an entirely separate team of “sales acceleration” specialists working to take those services to market. Cisco is adjusting compensation policies for its field salespeople as well to make that undertaking easier.
“There were some legacy policies where the field didn’t want to work with a service provider because they wouldn’t retire full quota,” Zagury explains. “All of that is gone.”
Cisco’s service provider partner program is instituting changes too based on requests from MSPs. “A lot of our provider partners say, ‘we don’t want backend rebates. We want more help with front end discounts,'” Zagury notes, pointing to partner incentives for Secure Connect Now, Cisco’s recently released SASE solution, as a concrete example of the company acting on that feedback.
To compound the complexity of Zagury’s assignment, her team must accommodate the needs of everything from mom-and-pop MSPs to giant service providers with Fortune 500 clienteles. Those bigger partners are supported by assigned account managers, among others, but reaching the far larger pool of far smaller MSPs requires a different, more scalable approach.
As Michelle Ragusa-McBain, Cisco’s global community lead and channel evangelist for MSP and everything as a service, told ChannelPro earlier this year, an AI-powered onboarding resource called Partner Journeys will play a key role in that plan. Launched last month, the self-serve tool is designed to simplify and clarify an otherwise bewildering process.
“If you’ve talked to any Cisco partners ever, they’ll tell you we’re not the easiest company to do business with,” says Cherie Caldwell, director of sales business development for ecosystem expansion at Cisco, whose team built Partner Journeys. “We’re massive, and we have a lot of business units, and every business unit can kind of do their own thing.”
Partner Journeys cuts through that complexity for MSPs by walking them step by step through everything required to become a Cisco partner, develop an offer, and sell it through VARs and Cisco’s own salesforce.
Becoming a Cisco MSP is one of several journeys supported by the tool at present, which includes content for developers, Meraki ISV partners, and others too. Cisco plans to add five to 10 additional journeys every quarter, one of which will be tailored to assist Andrew Sage, the company’s vice president of global distribution, who assumed responsibility for Cisco’s SMB sales organization in April. Attracting more SMB partners is a big part of his role.
“Being able to onboard them, enable them, and do all that in a touchless digital way and track it will be massive for Andrew’s organization,” Caldwell says.
Without citing specific numbers, Zagury says her group’s efforts are already bearing fruit. “Oliver, when we started this journey a year ago, said, ‘you need to grow [revenue] 15%,’ and I can tell you we’re growing faster than that,” she says, adding that service creation is another key metric on her scorecard. “We stopped counting at 2,150 offers that we already have built with partners out there.”
To sustain that momentum, Cisco has ambitious plans in the year ahead to get MSPs selling its SD-WAN platform, along with its “full-stack observability” suite, which includes the AppDynamics application performance management system, the Intersight cloud management platform, and the ThousandEyes “digital experience monitoring” application.
“It will provide all this different data that partners can really monetize and use to provide really great outcomes to customers,” Zagury says, adding that some MSPs will also re-sell the offering to co-managed IT clients.
To accelerate deal velocity, more predictable quoting is on the way as well. “You’ll see us get much stronger at programmatic pricing,” Zagury says.
As-a-service products figured prominently in keynotes yesterday at Cisco Live, which concludes today.
