Cisco partners: Services programme revamp will hit us in the wallet

Shared Support replacement - with 'retro-rebate' - set for October

Cisco is to overhaul the Shared Support programme from October in a move that is expected to strike a blow to the cash flow of incumbent partners.

The Cisco Services Partner Programme (SPP) framework applies broadly the same discount structure, but rather than making it available at the point of purchase dealers will need to apply for a rebate retrospectively to be paid out at the end of each quarter.

Shared Support, a programme for resellers to flog their own technical maintenance services, was introduced in 2006.

It was initially controversial as it required resellers to collate and register serial numbers for all Cisco kit sold and spare parts held before the vendor would provide tech support: a costly process for the 40 participants in the scheme.

Under the current system, Cisco offers incumbents a base discount but then gathers performance stats from its dealers on 31 July of each year, which Cisco then uses to calculate the buy price for the following 12 months from 1 October.

These include conversion (the rates of renewals for Shared Support at the end of each year); renewals after years two, three and four; the number of enquiries made to the Technical Assistant Centre; RMAs; and a customer satisfaction survey.

"The new system will have a relatively similar way of working but I think we will only get a base discount. The five bonus areas will be paid quarterly in arrears as a rebate – that is the major [programmatic] change," said a channel source.

"Cisco will keep hold of that money for longer which will have cash flow implications," he added.

Shared Support was closed to new entrants and the replacement programme is expected to usher on board additional service providers, with some claiming the mandatory 100 per cent attach rate of services to kit sales will be watered down.

Cisco UK and Ireland partner organisation operations director Richard Roberts told The Register: "In a effort to improve the efficiency and simplify our partner relationships, Cisco is piloting a new SPP.

"We will provide additional details on the new programme over the next few months," he added. ®