Make the most of Cisco Recurring Offers by Tom Saunders, Cisco Services & Software Sales Lead EMEA
The debate about whether the industry will move from a traditional license and maintenance model to a subscription-based model is long over. Software is becoming an ever-larger part of Cisco’s total revenue, and CEO Chuck Robbins is actively trying to build more. Partners must evolve or risk being left behind. Tom Saunders explains why it’s time to make the move.
1. Financial rewards
Recurring offers are an opportunity to drive greater margins because subscription models and recurring offers provide more stable and predictable revenue. It is significantly easier to bring in revenue under a recurring model than under a transactional model – there is no need to spend time and resources closing a deal with an existing customer if you have a recurring revenue model already. Plus Cisco research shows that partners who lead with software see bigger deals, with 54% of profit coming upfront and the rest from follow-on services.
2. Closer relationships
Under an ongoing, recurring model, organisations will naturally have a closer relationship with customers because the relationship is longer term, rather than short and transaction-based, so there is more scope to get closer to customers. It also increases ‘stickiness’ as the customer will get used to working with a specific partner. This can often work in the partner’s favour, as they can become ingrained in the customer’s way of working, and become the obvious option for any new services the customer may need. The focus shifts to retaining customers and delivering ongoing value to customers that builds long-term loyalty – and locks out competitors. The formula for growth lies in delivering multi-channel experiences and services (that get better over time).
3. Strategic value
Customers increasingly want financial flexibility and the convenience of paying by subscription or only for what they use. Enterprises in particular no longer want complex, on-site software deployments. They expect software that can be quickly and easily upgraded, managed centrally, changed when required, and connected to the cloud as workers become increasingly mobile. So pursuing recurring offers provides value in the longer term by aligning with the direction in which the industry is heading; Comstor’s revenue from Cisco’s recurring software alone is growing 100% year on year.
4. Cisco alignment
Cisco has committed to increasing recurring offers as part of its long-term business strategy, partly in response to changing customer requirements. Indeed, software subscriptions now make up 70% of Cisco’s software revenue. Cisco is changing its portfolio as a result: such as reinventing the network to be software-focused and driving security across the entire network e.g. Umbrella (security), Meraki (networking), Webex Teams (collaboration), HyperFlex (infrastructure). Partners need to be onboard to be part of the Cisco journey.
5. Comstor value
Recurring offers represent change and a challenge. Shifting from Capex to Opex requires resource, investment and will – and the support of a digitally-enabled distributor. We can help make the transition smooth and successful by providing value-added services, business intelligence, sales enablement and marketing support. We educate engineers and sales teams to help them understand how they can make as much – or more – with recurring offers. And our Cisco-centric approach and long history of enabling partners in the world of Cisco means we have the experience and resources to provide the high-touch approach partners need to succeed.
The recurring offers opportunity is too good to miss.
Contact your Comstor team today.