Cisco Announces New Channel Initiative To Support Services-Based Business Models

Business Wire, August 13, 2001

Business Editors/High-Tech Writers

SAN JOSE, Calif.--(BUSINESS WIRE)--Aug. 13, 2001

eAgent Program Simplifies Hardware Transaction Process,

Enabling Channel Partners to Focus on Value-Added Services

and Capitalize on New Revenue Opportunities

Building on its new channel strategy to provide training, tools and programs that support value-added, services-based business models, Cisco Systems, Inc., the worldwide leader in networking for the Internet, today launched eAgent. eAgent is an optional program that relieves channel partners of the numerous financial burdens associated with hardware resale and rewards them with a fee for securing product orders as part of an overall solution.

"Over a year ago we outlined a channel strategy that would help prepare our channel partners for a fundamental product to value-added services shift in the industry," said Tushar Kothari, vice president Channels at Cisco Systems. "In March, we laid the foundation for this shift to value-added, services-based business models with the announcement of our new Channel Partner Program. With today's announcement we are taking the next step toward preparing our channel partners to succeed in the rapidly evolving services-based channel market."

eAgent is a new program for Cisco Gold, Silver, and qualified Premier Certified Channel Partners in the United States who, when enrolled, receive a varying fee for acting as a Cisco sales agent. Channel partners can choose to place orders through traditional means or through eAgent on a transaction-by-transaction basis. eAgent manages the product fulfillment tasks transparent to the end customer, enabling channel partners to maintain complete control of the customer account while at the same time enjoying the fulfillment benefits provided by Cisco. Cisco uses a formula that factors in the channel partner's certification level as well as product sales price to compute the specific eAgent fee for each transaction.

"Today's IT market is driven by the services required to plan, implement and support the product platform that the client is leveraging to address a specific business issue. Therefore, channel programs being offered by vendors need to focus on helping channel partners deliver the services and capabilities required by their target customers," said Michael Haines, principle analyst at Gartner Dataquest. "Cisco has recognized this market trend and has crafted a new program, eAgent, that rewards channel partners for focusing on services. eAgent is a reflection of the changing channel landscape and establishes a new model for the IT product and services industry to follow."

Preparing Channel Partners For Services-Based Market

With its implementation of eAgent, Cisco has addressed several key issues that will help channel partners succeed in the services-based channel market. These include helping channel partners focus on delivering value-added services, creating new opportunities, leveraging the Internet to increase productivity and profitability and providing programs, such as eAgent, to support new business models.

Focus on Delivering Value-Added Services

eAgent eliminates the cumbersome tasks, such as securing credit, tracking delivery and managing payment, associated with product fulfillment, allowing channel partners to focus on delivering value-added services.

"By using eAgent, we will free our sales and services personnel from involvement in the logistics process and enable them to spend more time focusing on delivering value-added services and advancing our clients' strategic business objectives," said Teresa A. Weipert, Vice President, Global Marketing and Alliances, Unisys Global Network Services."

New Opportunities for Partners

eAgent also relieves several financial burdens -- such as process and personnel management as well as inventory expenses -- allowing channel partners to capitalize on new revenue opportunities.

"At RMS, our strength is in providing value-added services, not product fulfillment," said Rick Rubenstein, President, RMS Business Systems. "eAgent will enable us to pursue new opportunities based on our capabilities. We see this as a huge competitive advantage."

In addition to creating opportunities for traditional resellers, eAgent also provides new opportunities for its services and consulting partners. These channel partners, who have a significant influence on the sale of Cisco equipment, can now be compensated for facilitating a hardware transaction without taking product ownership or altering their current business model.

"Creating a program that allows us to not only influence, but actually secure product orders without altering our business model, is a huge benefit to our company," said, Michael Perdue, Chief Operating Officer, The Signature Group. "eAgent offers us new revenue opportunities that we plan to take advantage of."

Leveraging the Internet

The new eAgent Program takes advantage of the Internet to provide channel partners with an efficient, automated hardware transaction process. This simplified, flexible transaction option helps maximize both channel partner profitability and productivity.