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VIP 17: Creating Opportunities for Partners’ Growth and Profits

February 3, 2011
at 6:51 am PST

A message from Ricardo Moreno--Senior Director, Strategy, Planning, and Programs, WW Channels…

Cisco’s Value Incentive Program (VIP) helps increase partner profits by rewarding you twice a year with a rebate payment for building Cisco-based practices.

The role of the network continues to grow and creates new opportunities for Cisco and our partners. It’s also changing the dynamics of the industry. We’ve heard from so many of you that you really value the VIP program, so we are simplifying and enhancing it to create new growth opportunities, revenue streams, and more profits for you.

January 30 marks the 17th consecutive rollout of the VIP program, or VIP 17 (it runs until July 30, 2011). With this iteration, there are a number of changes that are designed to create new growth opportunities, new revenue streams, and greater profitability for you.

Let’s walk through those changes now…

VIP 17 has three tracks (Borderless Network, Collaboration, and Virtualization). Here is a summary of the changes by track:

In the Borderless Network track:

  • We are adding a Small Business subtrack. So for the first time, partners who sell Cisco Small Business Technology products can be rewarded for building a borderless network architecture practice targeting small business.
  • We are removing the need to register Core Routing and Switching deals via the Opportunity Incentive Program (or OIP).
  • We are expanding the Access subtrack, adding new SKUs, changing the rebate amount and renaming it Core Routing and Switching.
  • VIP 17 also eliminates the need for partners to participate in both VIP and the Cisco Partner Development Funds (PDF) program.

And, in the Collaboration track:

  • We are fueling new growth opportunities by adding TANDBERG products to our Telepresence subtrack.

Finally, in the Virtualization track:

  • We are simplifying this track by combining Data Center Networking and Data Center Storage Switching into a single Data Center Unified Fabric subtrack.
  • To further simplify this track we are updating the Data Center Unified Computing subtrack to include both the UCS B-Series and C-Series.

Head to the VIP website to sign up, to find out more about changes, and for a complete list of VIP products.

And, as always, please post your comments and questions here.

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5 Comments.


  1. VIP 17 is a laughable. Huge reduction in rebates for core products- and Cisco trying to downplay it. Cisco is making a big mistake with this program, since it will drive loyal partners to HP, Dell or Juniper for their profits. Not sure what Cisco was thinking on this one.

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  2. Ricardo Moreno

    Wilson-

    Would welcome the chance to connect with you on VIP 17, please email me (rimoreno@cisco.com) if interested. In the meantime let me point out the fundamental change that was made on VIP 17 for the Borderless Network Architecture:

    With VIP 17, in line with partner feedback and requests, we eliminated deal registration/OIP for our core products, meaning we are now paying a rebate to partners on incremental (hunted) as well as existing core routing and switching business.

    This is a major shift in favor of our partners. And, by eliminating the OIP requirement for certain VIP products, we have increased partner predictability for the deal, and consequently overall business.

    Thanks,
    Ricardo

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  3. Ricardo, hats off for posting my reply(seriously) and good try on the spin but you have also reduced the rebate for an OIP registered deal in almost every case from 12-20% on an OIP registered deal on R+S to 3-5%,and reduced the SKU list from 8000+ skus to about 700. This is not a major shift in favor of partners, particularly partners who use the OIP program the way it is intended. It is a huge reduction in payout for every single partner that sells value over commodity and its very easy to prove if you just look at any partner’s business. Ill take the old program, thank you very much!!

    This program is directly opposed to what you want partners to do- sell architectures. I am sitting at partner summit today and listening to John Chambers say that CORE is the most important part of Cisco’s business- and that we partner for life, yet via this program you are moving partners very quickly AWAY from selling the architecture in favor of a best of breed solution. It will be harder and harder for my company to position Cisco over the competition based on price or smartnet deltas because in the past I had profitability to fall back on- today, I don’t. This program is a backfire, pure and simple. To not see that is to not understand your partners and how they sell, nor your buyers and how they buy. Walk around the partner summit and ask any partner if they agree with me.

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  4. Ricardo Moreno

    Wilson-

    As you know one of the themes from this week’s Partner Summit has been getting feedback. So thank you for continuing to push us to be better. We have one more day in New Orleans and would welcome the chance to talk with you live and per my previous post, here’s my email (rimoreno@cisco.com). Until we can connect, let me share the following points:

    Since its launch 8 years-ago, VIP has been consistently rewarding partners for building a practice. The original focus was to incent partners for building advanced technology practices. Today our focus is on incenting partners to build architecture practices. In this specific case, borderless network architectures.

    In VIP 16 OIP was a requirement for core routing and switching. We eliminated OIP as a requirement from VIP 17 as a direct result of partner feedback for more predictability in their profitability. With the elimination of OIP the partners get the discount and the rebate.

    Hope to connect tomorrow while we are both in New Orleans.

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  5. I can see how there was a conflict between OIP and VIP 16. What you did in 17 makes sense, given the mission of each program. No doubt it’s hard to run all of these incentives without having them ever run afoul of each other. But you seem willing to take the feedback from partners and revise accordingly. And that’s a good thing.

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