‘We listen,’ says Cisco Senior Vice President Tim Coogan. ‘I think we found ourselves in a more stable position with the market moving forward. We consider feedback a gift.’
Cisco channel chief Tim Coogan said the company was being responsive to customer and partner feedback when it reinstated compute deal registration on April 15, two months after it eliminated the popular partner profitability incentive.
“We listen,” said Coogan, the senior vice president of global partner sales in an interview with CRN on the decision to bring back compute deal registration in the wake of a firestorm of criticism from partners. “I think we found ourselves in a more stable position with the market moving forward. We consider feedback a gift. At Cisco, I think one of the things we pride ourselves on is being flexible and being a listening organism and mechanism. Our customers and partners gave us feedback, we listened to that feedback, and I think we responsibly put together a program that brought it back on compute in a way that we’re all comfortable with.”
As to the feedback from partners, Coogan said: “The feedback from the partner community was they understood why we did it. They weren’t happy about it. Of course, nobody is happy with change, and if it impacts profitability, I get that. They are incredibly happy that we brought it back in a way that is meaningful to selling the full stack Cisco portfolio solution.”
Cisco’s decision to eliminate compute deal registration sparked outrage from partners who complained the policy took away partners’ opportunity to earn an additional 8 percent margin on a deal to protect their investment in winning compute deals in the midst of the unprecedented memory shortage which has sent hardware prices soaring.
Coogan, who cited “unprecedented market volatility” in canceling compute deal registration, said he stands by the original decision to eliminate compute deal registration.
“I, of course, support the company,” said Coogan when asked if he supported the decision to cancel compute deal registration. “I was part of that process. I would never, ever place blame on anyone. I am the leader of the channel organization, and we did it in light of a volatile and dynamic pricing situation inside of the compute piece of our business.”
“We always look at ways to optimize our go to market, the go to market of our partners,” said Coogan. “And I think that was just indicative of a volatile time that we made an adjustment. It’s something that we’ve done for the entire 40-plus-year history of our company.”
A Huge Boost To The Channel
Harry Zarek, founder, president and CEO of Compugen, Cisco’s 2024 Networking Partner of the Year for the Americas, said the move to bring back compute deal registration is a “huge” boost to the channel.
“Deal registration allows us to invest in understanding and developing customer solutions,” said Zarek. “Without deal registration the industry will deteriorate to three bids in a box and the lowest price wins. You don’t have the opportunity at that stage to demonstrate your value with a customer-crafted solution. Deal registration is an investment in pre-sales activity and technical advice to customers. That can’t be free. Deal registration is a recognition for those of us who have invested in nurturing those customer relationships.”
Zarek said Compugen registers all its deals. “We would never do a deal that isn’t registered,” he said, noting that it is much-needed price protection for the work put in by partners to create a custom solution that is optimized for a customer. “The partner that has done the work should be recognized for it.”
Manak Ahluwalia, president and CEO of Aqueduct Technologies, one of Cisco’s top partners, No. 314 on CRN SP500, said he greatly appreciated Cisco reinstating compute deal registration.
“Deal registration is a vital, core component of the profitability for partners as we evangelize and advocate for Cisco based solutions in the field,” he said. “The reason deal registration programs exist in the first place is there is a significant cost of sales to help a customer identify the business and technical challenge, develop a solution that makes sense and then provide them a proposal that is inclusive of an OEM’s hardware. The reality is a good chunk of the overall total cost of ownership of whatever we are proposing is going to be a very heavily weighted to a portion of the product the customer is acquiring. So not having the ability to be profitable on the products almost de-invests an organization’s ability or desire to lead those sales efforts because we cannot recoup our cost of sales.”
When asked about any data on the net economic impact of bringing back compute deal registration, Coogan said: “The data point is that our partners know that we listen, and they know that unlike anyone else in the industry, we are deeply committed to listening to our partners and responding to their feedback, as we have done throughout our entire history.”
