Cisco to let partner software, services bloom

Cisco announces it will incorporate 'lifecycle services' content into training programs

Cisco Systems wants its channel partners to run off with everything it learns about providing professional services.

"We don't want to be the holder of services intellectual capital," said Robert Lloyd, Cisco's senior vice president of U.S. and Canada operations, in an interview Tuesday at the Cisco Partner Summit, in San Diego.

The dominant networking vendor's services business is there primarily to learn how to provide services such as system planning, design, implementation, operation, and optimization around Cisco technologies, then package those lessons and pass them on for channel partners to use, Lloyd said.

As part of that strategy, Cisco announced Tuesday that it will incorporate "lifecycle services" content, covering those types of design and implementation functions, into the training programs for all its channel certifications.

Services brings in about 18 percent of Cisco's annual revenue, but that percentage hasn't changed significantly over the past few years and is unlikely to grow much in the future, Lloyd said. The company does provide professional services directly to some very large telecommunications carriers and enterprises, but in most cases it leaves those functions to system integrators and other channel partners, he said. One thing Cisco will do with its own services business is work out ways to do system design and other functions for its latest advanced services to learn lessons that can be passed on, he said.

Cisco's overall strategy, emphasized over the past year or more, is to build more "intelligence" into networks, integrating technologies such as IP (Internet Protocol) telephony, video, and security into networks and even adding features that ensure all applications perform as needed. Partners ultimately will play a key role in creating these more intelligent networks, the company says.

Not pushing hard with its own services business is a good move for Cisco because it avoids the company competing with its partners for a lucrative piece of their business, said IDC channels analyst Ken Presti. Going up against them on this would cause some to turn away from Cisco, he said. Users benefit from the strategy because it helps create a healthy market for providers of these services and gives customers more choices, he said.

Also Tuesday, Lloyd said Cisco wants to unleash third-party development of new applications for networks by taking a hands-off approach.

"We are not going to build the be-all and end-all application certification model where we certify every application...That tends to lead to a restriction in the innovation that we now see available," Lloyd said. Cisco itself will develop general enabling applications, such as messaging and the MeetingPlace collaboration software but leave the invention of more specific capabilities to others, he said.