Cisco partners aren't yet concerned that new cloud collaboration applications announced last week will block on-premise hardware sales.
That's because many just returned from a couple of days at a press-free Cisco unified communications (UC) summit, where the networking hardware giant explained that the approach to selling WebEx Connect cloud collaboration applications isn't necessarily to replace on-premise hardware but to show customers that they need both.
"Some of the offerings that WebEx Connect and WebEx provide are also the same as what the premise-based [systems] provide. Before now it looked like they would compete," said Ethan Simmons, president of Boston-based Cisco UC partner NetTeks Technology Consultants, who had just gotten off a red eye from the Cisco event. "But they communicated how they can actually work together and both be used."
That strategy may be why Cisco announced the new WebEx Connect cloud collaboration offering, which includes integrated collaboration applications, enterprise instant messaging, collaborative workspace, document management, calendaring and impromptu voice or video conferencing as part of an overall UC portfolio. That portfolio also includes Cisco UC System 7.0 and a new telepresence application for the contact center.
Dave Elsner, vice president of sales and marketing at Cisco partner Nexus IS in Valencia, Calif., agreed with Simmons, saying WebEx on-demand video and voice conferencing, for example, can be used in the on-premise UC environment. WebEx Connect can be worked into existing Cisco call center or UC technology, enabling operators to launch conferencing sessions or collaborative workspace from an incoming instant message that may have originated on an on-premise system, Elsner said. Because WebEx has open APIs, it's possible to customize applications that can be used within the WebEx/on-premise UC environment, improving both, Elsner said.
Partners said they don't expect WebEx Connect to cut into other sets of Cisco hardware products.
"You're still going to have network infrastructure and phones at the desktop. You're still going to have traditional needs, so we're not going to stop selling hardware completely," said Don Seiler, business development manager for World Wide Technology, a Cisco UC partner in St. Louis. "This just allows us to play deeper and broader."
While selling hosted services may not initially be as financially attractive as hardware sales, over time, it will pay off, partners said. Cisco made sure that partners would get a cut of cloud application subscription fees for the life the contract.
Partners who resell WebEx Connect as a subscription service will get a 12% commission on the first year, plus 8% if the deal is developed and registered by a partner. WebEx Connect subscription renewals provide an 8% annuity payment to the partner. Eventually some solution providers will be able to host WebEx services as their own conferencing applications from their own networks. And in both cases, partners can earn more money by developing customized applications for the collaboration suite.
"There was a lot up in the air. Now that there's a partner program in place, the framework is set up on how you are going to be compensated. They have really clarified the product and how to approach selling it," Simmons said. He added that pricing seemed fair and is comparable if not better than other companies offering Software as a Service (SaaS).
Now that there's a partner program laid out for cloud collaboration applications, and WebEx Connect is part of the UC portfolio, Seiler said WebEx services as a whole will get better use in the enterprise. Previously, in a large enterprise, various departments would buy accounts, "put [WebEx] on a credit card" and only use it within their own framework, Seiler said.
"You could have a Fortune 500 and you might find there's a hundred different WebEx accounts. You may have four or five desktop versions of these applications with no control, no security," Seiler said. "Now we offer a single [system] to work with. We can arrange evaluations of what's available and offer it as a service model." The Cisco UC portfolio extends UC and WebEx Connect out to any workspace securely.
"Microsoft partners are not voice- or network-centric partners, so they have a huge learning gap to overcome there," Seiler said. Cloud collaboration and UC are about leveraging voice in the mix -- and connecting to phones, a strategy that Microsoft doesn't necessarily agree with, he said.