Cisco’s decision to eliminate deal registration for its compute business has sparked a partner backlash, with many warning of lost margins and lost trust as memory prices surge. Partners call the move ‘out of character’ for the channel-friendly tech giant.
Cisco’s deal registration program—which is still in effect for Cisco’s other product lines—has been a long-cherished component of the company’s sterling reputation for protecting partners’ investments in building solutions for customers. Cisco partners contacted by CRN said they were stunned by the San Jose, Calif.-based company’s decision in February to eliminate deal registration for its Unified Compute System (UCS) lineup as it deals with fallout from the industrywide memory shortage, calling it “out of character” for the channel stalwart. The solution providers all asked not to be identified to protect their ongoing business relationships with Cisco.
A top sales executive for one of Cisco’s largest partners said his company has been absolutely “shocked” by Cisco’s decision to eliminate deal registration for its compute business. “This is out of character for Cisco,” said the sales executive. “It changes our view of Cisco. We’re asking ourselves, ‘Why did they do this?’”
[Related: Cisco Cancels Compute Promotions, Deal Registration Discounts In Wake Of Rising Memory Prices]
The top sales executive said the elimination of deal registration poses a thorny problem for sales reps who have proactively sold UCS into accounts over many years but now find themselves flat-footed with a product that is less profitable. “If you want to make more money, you have to sell a substitute,” the sales executive said.
A vice president for a large Cisco partner said the change stems from Cisco looking to “claw back” some additional margin from partners amid the memory crisis.
“Why would I sell Cisco in that scenario if you’re not even going to protect me with deal registration?” said the vice president. “Why should I be loyal?”
The CEO of a CRN Solution Provider 500 company said sales reps are looking at moving Cisco compute deals to other vendors in the wake of Cisco’s decision to eliminate deal registration for its compute business.
In fact, the CEO said, a top sales rep for the company is currently looking at moving a Cisco compute deal to Dell Technologies or Lenovo.
“The sales reps are savvy; they work with multiple OEMs and typically own the customer relationship. The customer is going to listen to them,” said the CEO. “We are not going to watch our percentage margin drop to nothing. The channel is looking for the fastest and best path to success for their customers. What Cisco has done is the complete opposite. They have created more complexity, less confidence and [more] uncertainty.”
Deal registration programs aim to protect solution providers that are first to a deal and reward them for the investment they have made in selling and crafting a solution. With that protection gone, partners that spoke with CRN said they are in peril of losing compute deals to the handful of Cisco’s largest national and global partners that get the highest discounts.
“This is going to have a lasting impact,” said the CEO. “Why would you be comfortable quoting a Cisco compute deal when a procurement person can turn around and say, ‘I want to make sure we are getting a fair price, so I’m going to shop it to another partner with better pricing from Cisco?’”
The regional vice president at another large Cisco partner said the removal of deal registration for compute undercuts the premise of Cisco 360, the new channel program that launched at the end of January with the intention of rewarding strategic partners focused on business outcomes.
“It’s in opposition to one of the benefits of Cisco’s new partner program,” the regional vice president said. “If you eliminate deal registration, it’s fair to say the loss to strategic partners could be up to 8 points, as there are transactional resellers that do business at no margin relying on back-end rebates.”
The CEO of a large regional Cisco partner said the deal registration cancellation has made it so there is “no incentive” for a partner to “proactively sell” Cisco servers over its rivals.
“Dell and HPE are doing a better job of being price-competitive, having better supply chain capabilities and better incentives for partners to actually sell their servers right now,” said the CEO. “What I am seeing on the street is Cisco is more likely to lose deals than win deals.”
The CEO said it was disturbing that Cisco would take a step as drastic as eliminating deal registration amid the global memory crisis.
“This is the first time I’ve ever seen them eliminate deal registration, which has created a race to zero in that compute segment,” said the CEO. “They could have easily manipulated list prices to allow for deal registration. It is concerning, [given their] partner-first model, that they have stripped away deal registration.”
The CEO, who also works with HPE and Dell servers, said those vendors have shortened price validity windows and asserted the right to cancel orders—which Cisco has also done—but they did not “devalue” the role of the partner by eliminating deal registration. “That is a worrisome precedent that Cisco has set that was never there before,” said the CEO. “That is a terrible precedent.”
The CEO said the compute policy shift raises the question of just how committed Cisco is to teaming with partners on UCS.
“When UCS came out, it was such a differentiated platform. Cisco really established that market, but that is no longer the case,” the CEO said.
Some partners said that while they don’t like the change, they do understand the drivers behind Cisco’s decision.
The CEO of an East Coast-based solution provider said Cisco’s decision to eliminate compute deal registration is not a reflection on the networking market leader’s long legacy of channel leadership but rather a nod to the “razor-thin” margins in the server market in the wake of the memory price increases.
“Cisco UCS has always been priced at a premium, and there was always a pretty steep discount on it for them to be able to compete with Dell and HPE,” said the East Coast CEO. “At these price points with the huge fluctuation in storage and memory costs, there is no way Cisco can be profitable [with UCS]. They are doing this to protect themselves. This is not them being a bad actor or trying to put partners in a bad place. It is just a realization of the dynamics of the industry and what they are facing in the market.”
For its part, Dell has been mounting a full-court press in the server market against Cisco and is making gains, said the East Coast CEO. “Dell has been eating [Cisco’s] lunch on the server side,” the East Coast CEO said.
IDC’s Worldwide Quarterly Server Tracker for the fourth quarter of 2025 shows Dell leading global server revenue with 10 percent market share, followed by Supermicro with 9.5 percent, while IEIT Systems and Lenovo statistically tied with 4.1 and 4 percent, respectively. HPE was fifth with 3.1 percent market share. Cisco UCS typically falls outside IDC’s top five rankings.
Cisco Grapples With Rising Memory Costs
The changes to Cisco’s deal registration program are hitting partner margins at a time when channel profitability is already under significant pressure due to the worldwide memory shortage.
Cisco declined to make channel chief Tim Coogan available for an interview.
In a statement, the San Jose, Calif.-based company said the decision to eliminate deal registration for compute is a response to ongoing memory supply constraints driven by AI demand, not a shift in its partner strategy.
“Memory supply shortages continue to impact market dynamics amidst the surge in AI demand. We are actively working with partners to help them stay competitive while navigating these unprecedented industry challenges. Deal registration remains in place across our broader non-compute portfolio, and partners can still register full-stack and portfolio deals that include compute. We will continue to update our programs as market conditions evolve,” according to the statement.
With steep price increases coming at a rapid and unpredictable clip, server sales cycles have become significantly more complicated across the industry.
Solution providers have told CRN that the crisis is increasing operational costs as partner sales reps have to check and recheck orders with multiple OEMs to accommodate weekly or even daily price changes.
Like many other technology vendors, Cisco has altered contract terms and reduced price quote validity because of the shortage.
Cisco began reshaping its compute pricing policies in February, citing rising memory costs as it updated contract terms to allow order cancellations up to 45 days before shipment and repricing if component, manufacturing, tariff or currency costs increased. The company made changes to quote price protection the week of Feb. 9, then moved more aggressively a week later to cancel compute promotions and deal registration, effective immediately.
“I know you have questions,” said Coogan, senior vice president of global partner sales, in a memo to partners in February as he notified them that all approved compute quotes for which Cisco had not yet received an order would be reopened and repriced. “I don’t have all the answers yet. What I do have is this: We’re listening to your feedback, and we’re working as fast as we can to give you clarity as this situation evolves.”
Cisco then on March 8 cut quote protection to seven days for compute hardware and 14 days for non-compute hardware.
Cisco UCS prices in some cases are now doubling from the original quotes placed by partners. Those huge price increases have upset customers, too, solution providers said.
“I know of a lot of companies that are trying to get on the phone with [Cisco Chair and CEO] Chuck Robbins. It’s to that level,” said the Cisco partner regional vice president, adding that pricing has changed so drastically and so quickly that solution providers feel they are being left to absorb the impact.
“We had situations where Cisco put the notice [of memory price changes] out and said, ‘As of this date, quotes are no longer valid,’” the regional vice president said. “We had [purchase orders] in hand from days before that, and Cisco said, ‘No, that’s not the price anymore.’ Pricing was changing so much that we would be underwater if we covered it. We’re talking massive changes, an order going from $200,000 to $350,000.”
As a result, some customers that had already decided to buy Cisco are now considering competitive options because of budget pressures, the regional vice president said.
“We’re losing some deals because we were representing Cisco and the client has decided to work with another OEM,” the regional vice president said. “I would estimate perhaps a dozen or so situations like this actively exist ranging from deals moved officially to the client considering other options after a Cisco decision had been made.”
That said, the company’s sales reps are still recommending Cisco where they believe it is the best fit.
“If we’re representing Cisco and believe Cisco is the right solution, we would only shift to represent other solutions if [it was] demanded by the client,” the regional vice president said. “It’s certainly not something where we won’t represent Cisco. It just impacts pricing for the client, and that creates risk.”
Competitors Pounce As Partners Hope For Cisco Fix
With Cisco compute margins for channel partners potentially eroded by the removal of deal registration, competitors are already capitalizing. Round Rock, Texas-based Dell, for example, is mounting what the regional vice president described as a full‑court press to capture Cisco compute share.
While Dell is also feeling the impact of rising memory prices, the regional vice president said the vendor is managing the situation through “side conversations” with customers. “[Dell] is making agreements and commitments in a strategic way,” the regional vice president said, adding that Dell is selectively locking in pricing to exploit what it sees as growing weakness in Cisco’s approach.
Lenovo, meanwhile, is also aggressively working hand in hand with partners to displace Cisco in the data center, solution providers said.
The director of a large, longtime Cisco solution provider said Cisco’s removal of compute deal registration is indeed a “huge concern” for partners, but the networking giant has shown signs that it recognizes it’s not a long-term play.
“In order to react quickly to quickly changing memory prices, deal [registration] for the UCS business was unfortunately the low-hanging fruit to cut,” the director said.
The director, however, remains optimistic that Cisco will reverse the decision to cut deal registration.
“I think we’ll see them revert back on that one because ultimately, deal registration is all about helping us get paid for presales, doing work up front, and how we are going to be more price-competitive over our Cisco competitors,” the director said. “So we do need Cisco to fix that.”
