Cisco Managed Services Channel Partner Program Q & A

Transcription

1 Cisco Managed Services Channel Partner Program Q & A Table of Contents Cisco Managed Services Channel Program 2 Overview Questions 2 Cisco Powered Program and Designations Definitions and Process 6 Program Requirements 8 Setup and Ordering 14 Governance and Verification 17 Financing and Cisco Capital 18 Managed Services Definitions Appendix 20

2 Cisco Managed Services Channel Program Overview Questions Q. What is the Cisco Managed Services Channel Program (MSCP)? A. The Cisco Managed Service Channel Program is an enhancement to Cisco s award-winning channel program and is designed to facilitate partner revenue growth by establishing a business framework that supports delivery of a quality managed service experience. The Managed Service Channel Program defines and audits the elements needed to develop and deliver managed services based on industry standards, input from business customers, and Cisco s experience. The program helps managed service providers grow their managed services by sharing proven Cisco tools and expertise to accelerate technical, sales, and marketing success and to create tangible differentiation for their managed services. And the Managed Service Channel Program discount structure rewards the managed service provider for the level of value their services bring to the market. Q. How will this program benefit partners? A. The Cisco Managed Service Channel Program helps managed service providers deliver managed services that meet customer requirements, enabling them to profit from the large and rapidly growing managed services opportunity. Global Consistency Enables Cisco partners who invest in their managed services capabilities to best capture the market opportunity. This means having the ability to drive solutions globally with a consistent and predictable set of discounts and rebates that drive adoption of Cisco advanced technology solutions and the Cisco based transport offers that enable them. Financial Benefits Rewards partners for driving premium solutions based on our advanced technology product groups, and the Cisco-based IP MPLS transport that best enables our NGN vision. Premium services will achieve the new Cisco Powered Service designation in conjunction with new rebates and the go-to-market and branding benefits of the enhanced Cisco Powered Program. Branding & Marketing Benefits Partners that achieve the Cisco Powered Managed Service brand will set the industry standard for the highest value-add managed services. The Cisco Powered Managed Service brand indicates the service has met Cisco and industry standards and will receive special recognition in the enhanced Partner Locator tool on Cisco.com. Q. What is the Cisco Powered Program and why and how is it being enhanced? A. The Cisco Powered Program is evolving in two main ways: 1. Shifting from focusing primarily on the network to a program focused on the ultimate service experience delivered by a managed service provider. 2. Expanding its benefits to qualifying partners. The Cisco Powered Program delivers a robust set of service creation, marketing, branding, and technical benefits. With the launch of Cisco Powered Managed Service designations, members that qualify under the Managed Services Channel Program are also entitled to financial, global pricing, and additional branding benefits. 2

3 Q. How does the Cisco Managed Service Channel Program align with the Cisco Powered Program? A. The Cisco Powered Program and the Cisco Managed Service Channel Program come together at the top level of the MSCP value model. Cisco Powered Managed Service designations require compliance with Cisco Managed Service Channel Program customer-experience criteria. Q. Why managed services? A. Cisco believes the managed services market will continue outpace IT industry growth as customers look to achieve predictable costs, reduce network complexity, decrease service adoption risk, and improve time to market. Managed services drive the cost and performance predictability that end users need in today s dynamic workplace. Additionally, managed services afford partners the opportunity to increase profitability and to further differentiate themselves in an ever-increasing competitive environment. Industry research suggests that managed services will continue to grow at approximately 20% CAGR and reach US$7 billion in revenue by (Ovum) Advanced technologies such as managed IP telephony and security show the most momentum with 65% and 28% growth, respectively. (Ovum) Customers facing increased velocity and complexity of their IT investments are looking to managed services as a way to maximize their investment and minimize risk. Cisco predicts that over the next five years, more than 75% of advanced technologies will be sold as finished managed service solutions. Q. Why is Cisco introducing this program? What market dynamics predicated this move? A. Cisco is introducing this program in direct response to the needs of our channels and their customers. Managed services is an area of high growth. Establishing a value-based program for managed services that aligns with Cisco s current channel program strategy demonstrates Cisco s commitment to enabling and supporting our channel community s growth in the managed services market. Together, Cisco and its partners can define and deliver a premium managed service experience. Q. How will this program change the way customers think about or purchase managed services? A. Currently, customers view the purchase of managed services as confusing, as a result of varying definitions, expectations, and global inconsistencies. The Managed Services Channel Program is designed to drive more consistent service and financial expectations. By benchmarking and validating the quality of a managed service experience through the program designations, end users will know that a qualified provider has met industry best practices and has the capabilities to deliver a consistent service. By mapping rewards to the value delivered, the program helps accelerate managed service providers revenue growth and return on investment when delivering managed services and affords them global consistency and an opportunity to receive branding and marketing assistance.

4 Q. What are the benefits of this program for Cisco? End users? Managed service providers? A. Cisco Managed services growth through increased sale of CPE and ability to more rapidly benefit from advanced technology by customers Improved customer reception and adoption of Cisco solutions Speed absorption of our partners Cisco-based IP network infrastructure End users Competitive advantage with less risk Guaranteed performance from service-level agreements Fixed costs and less capital outlay Ability to focus on IT strategy, not IT integration Managed service providers Consistent global pricing strategy and procurement process Recognition of investment in managed services model and global capabilities Third-party endorsement of capabilities Cisco Powered branding for premium managed services Q. This program has three levels. Can you explain these levels? Can a partner participate at varying levels based upon the services they offer? A. The Cisco Managed Services Channel Program maps incentive rewards to the investments managed service providers make, the expertise they build, and the value that their service delivers to the customer. Benefits are based on the level of qualification the service meets: Cisco Powered Managed Service, Strategic Managed Service, or Legacy Managed Service. Cisco Powered Managed Services Cisco Powered Managed Services come with a Cisco Powered designation, which indicates the service has met rigorous measures based on the highest level of customer value, industry standards for service delivery, and Cisco s benchmark for quality. Qualifying providers receive financial, branding, and go-to-market benefits for services that meet these requirements. The following represent eligible Cisco Powered Managed Service designations: Cisco Powered Managed Connectivity Cisco Powered Managed Security Cisco Powered Managed Unified Communications Cisco Powered Managed Mobile Communications Cisco Powered Managed Data Center Strategic Managed Services Strategic Managed Services drive adoption of Cisco advanced technology solutions by providing customers with predictable costs while reducing technology adoption risk. Customers can now rely on the managed services provider capabilities, validated by a third party, to deliver finished solutions with an end-to-end product and service guarantee. Strategic services are based on Cisco advanced technology products or an IP-transport managed service based partially or wholly on a Cisco infrastructure. Additional requirements are established on a service-by-service basis and determine which technical attributes, SLA components, and service management reports provide a quality offer for the customer. 4

5 Legacy Managed Services If no Cisco infrastructure ports are required when a network solution is provisioned, that solution qualifies as a legacy service. Examples would be Frame Relay or ATM solutions. These are usually traditional network solutions that are not IP-based, and not based on a Cisco infrastructure. Non-transport services that do not deliver Cisco advanced technology products would be considered legacy services. An example would be a managed LAN. Q. What are the major differences between the Cisco Managed Services Channel Program and the Resale Partner Program? A. Both the Managed Services Channel Program and the Cisco Resale Partner Program are part of the award-winning Cisco Channel Partner Program. While the local resale program rewards partners for adding value to a resale transaction, the Cisco Managed Services Channel Program supports partners offering managed services. The Managed Services Channel Program offers discounts and rebates on managed CPE with branding benefits tied to managed service performance levels. The Managed Services Channel Program aligns the partner discount with the value of the service globally, and provides consistent pricing for partners on a global basis. The resale program, in contrast, treats a partner s go-to-market strategy by region and bases discounts on a partner s certification level in a given geography. Q. Is Cisco continuing to offer a single channel program for partners that deliver Cisco products through resale, managed services, and outsourcing offerings? A. Yes. The Cisco Channel Partner Program is designed to deliver a single channel strategy in support of the three main types of offers our partners make: local resale, managed services, and outsourcing. Each area of the program is streamlined to best support that particular type of partner offer. A partner may participate in more than one program (for example, resale and managed services). Q. Does the Cisco Managed Services Channel Program provide specific rewards for managed services targeted at the SMB market? A. The Cisco Managed Services Channel Program will address the SMB market in future phases of the program. 5

6 Cisco Powered Program Designations Definitions and Process Q. What is new about the Cisco Powered Managed Service designations? A. The new Cisco Powered Managed Service designation promotes a premium customer experience. The designations are based on objective, measurable criteria: technical, operational, and end-user service-level agreements (SLAs). Under the Managed Services Channel Program, partners are given incentives to develop and market industry-leading Cisco Powered managed services. Q. What Cisco Powered Managed Service designations will be available upon launch of the Managed Services Channel Program? A. Cisco offers five managed service categories: 1. Cisco Managed Connectivity 2. Cisco Managed Security 3. Cisco Managed Unified Communication 4. Cisco Managed Mobile Communications 5. Cisco Managed Data Center Cisco Managed Connectivity, Managed Security, and Managed Unified Communications services are offered at the Cisco Powered level. Q. What are the benefits of obtaining a Cisco Powered Managed Service designation? A. Partners that invest in and deliver the most consistent, compelling, and high-quality managed business customer experiences, as shown by third-party audit, receive the Cisco Powered Managed Service designation, which conveys the highest level of benefits under the Cisco Managed Services Channel Program. These benefits include a value-based business model, consistent global pricing and terms, and the go-to-market, technical training, and branding resources of the Cisco Powered Program. Value-based business model Discounts and rebates on customer premises equipment for services that qualify under the Managed Services Channel Program. Consistent global pricing and terms Qualified partners receive consistent pricing and terms, regardless of the location or title disposition of the equipment. Consistent global pricing makes it more cost-effective to expand into new regions. Service creation assistance Assistance in identifying and creating profitable new services that create personalized experiences for your customers Technical training opportunities Access to Cisco innovation, expertise, and technology to take full advantage of the unique capabilities of your Cisco IP Next-Generation Network Go-to-market assistance Marketing campaign and sales training resources, the ability to take advantage of the valuable Cisco Powered brand, and the ability to promote to businesses and organizations that your service performance has undergone third-party validation. Q. Is the Cisco Powered Program going away now that the Managed Services Channel Program is being launched? A. No. The Cisco Powered Program and the Managed Services Channel Program are independent programs. The two programs come together at the top level of the Managed Services Channel Program value model partners that invest in and deliver the most consistent, compelling, and high-quality managed business customer experiences, as shown by third-party audit, receive the Cisco Powered Managed Service designation. 6

7 This designation conveys all benefits of Cisco Powered Program membership, and comes with the highest level of benefits under the Managed Services Channel Program. Q. Why is the name changing from the Cisco Powered Network Program to the Cisco Powered Program? A. The name change reflects a change in program focus from rewarding end-to-end Cisco components in a network to a Cisco endorsed service experience. Qualification criteria for Cisco Powered Program designations will be modified over time to reflect this service experience focus. The first set of designations to change will be those associated with managed services: the Cisco Powered Managed Service designations. 7

8 Program Requirements Q. What is the definition of a managed service that would qualify under the Managed Services Channel Program? A. Cisco defines managed services as those services offered by our partners that meet the following criteria: 1. CPE used for the service is actively monitored and can be remotely monitored and configured from the partner s network operations center (NOC), allowing the partner to troubleshoot errors in real time. 2. Service is always sold with an SLA that clearly lays out the partner s service and support responsibility to the customer. 3. Service is sold with an SLA and contract term of at least one year. 4. Service meets the requirements above, regardless of disposition of title. Q. What are the program entry requirements? A. The main Cisco Managed Services Channel Program entry requirements are: 1. Network operations center (NOC) onsite audit 2. NOC requirements: 24x7 operation, a fully redundant site, and specific systems, connectivity, and personnel in place Service support, delivery, and management processes Reporting, local language support 3. Partners must have a valid SI or ICPA contract 4. Partners must submit an online application and sign MSCP Terms and Conditions 5. At least one managed service offering that fits program description 6. SLAs with minimum contract terms of one year for all services supported 7. Point-of-sale customer data for all program transactions on a monthly basis. For additional program requirements and details, please review the program audit document: Cisco Offer Based Channel Model Audit and Policies Document. Q. What criteria are the program entry requirements based on? A. Criteria for the program are based on a combination of best-in-class capabilities per Cisco s market experience and the Information Technology Infrastructure Library (ITIL) framework. For more information on ITIL, visit Q. Why is Cisco requiring annual assessments of partner capabilities and managed services? A. The new Cisco Managed Services Channel Program is based on individual managed services. A partner must demonstrate it has the resources, systems, and procedures to deploy, manage, and maintain CPE in all locations for which the managed service is available. New criteria may be added to increase performance and functions, with the intent of maximizing the customer experience. The program incentives are tied to customer value; therefore, an annual assessment and allocation of the partner s managed service portfolio to the program model will be undertaken. Partners will be given a reasonable period of time to meet new criteria for existing services. 8

9 Additionally, the market differentiation associated with participation in Managed Services Channel Program will remain strong when end users have confidence that member providers consistently demonstrate its capabilities. Q. Does my customer need to hold title to the CPE to have its service considered a managed service? Does holding title to the CPE qualify a service as managed? A. No. The Managed Services Channel Program is structured to offer the same benefits regardless of CPE ownership. Q. Which products are eligible under the Managed Services Channel Program discount? A. A defined product list is available for each managed service based on the standard materials to support that offer. Q. If a partner doesn t have a NOC but wishes to create a relationship with a partner that does, can that partner participate? A. A network operations center (NOC) meeting specific criteria is a core requirement to participate in the Managed Services Channel Program. Partners are free to establish relationships with qualified managed services partners, but would not be eligible to take advantage of the program benefits. Q. How can a smaller partner that has not invested in a NOC participate in the Cisco Managed Services Channel Program? A. The Managed Services Channel Program was created to reward partners for their investments in the managed services space; therefore, a partner must own a NOC to qualify for this program. Q. Will working with Cisco Remote Operations Services qualify for the program? A. Partners must own and operate their own NOC to participate in the program. Working with Cisco and Cisco Remote Operations Services alone would not qualify under the current program rules, terms, and conditions. Q. What happens if I choose not to participate in the Cisco Managed Services Channel Program? Can I maintain my existing contract framework? A. Participation in the Cisco Managed Services Channel Program is fully optional. If a partner meets the requirements and chooses to participate in the program, they must transact their managed services business under the Managed Services Channel Program policies and guidelines. All other resale transactions are subject to your existing agreements. Please note that Managed Services Channel Program partners cannot combine incentive program benefits with Managed Services Channel Program benefits. Q. What are the program costs for partners to participate in the Cisco Managed Services Channel Program? A. For qualified partners, Cisco absorbs the audit cost. All Cisco channel programs require effort on the part of partners to qualify for additional benefits. Q. What if I have a managed service offer that does not meet the Cisco Managed Services Channel Program criteria? Can I still participate? A. Unless a managed service meets all the criteria of the Managed Services Channel Program managed service definition, it will not be classified under the program and the associated CPE will not be eligible for program rebates or discounts. 9

10 Q. For security reasons, some end users will not allow a service provider to read or write their CPE configurations. Is this allowed under the Cisco Managed Services Channel Program? A. If the partner has the capability to remotely configure and troubleshoot managed service CPE, but the end customer chooses not to have this service level, the managed service still falls within the scope of the Managed Services Channel Program. Q. How do I enroll or apply for the Managed Services Channel Program? A. As with all Cisco channel certification programs, you can enroll in the Managed Services Channel Program using the Certification and Specialization Application (CSApp) tool. Those achieving Cisco Powered Managed Service designations may participate in the Cisco Powered Program as outlined on the Cisco Powered website: Q. When will I be contacted once my application is submitted? What are the next steps? A. Please allow 7 to 10 business days for processing. If an incomplete application is received, the partner and the associated channel account manager (CAM) will be notified by within 7 to 10 days. If the application is complete, the CAM and partner will be contacted by the third-party auditing firm to arrange a mutually agreeable date and location for the audit. Q. What is the audit process? A. An onsite audit will not be scheduled until the partner has submitted a complete online application and the Cisco Program Manager has verified that prequalification requirements have been met. A representative from a Cisco third-party audit agency will schedule the onsite audit and may request additional documentation or information prior or during the audit. Typically, the onsite audit will take place within 60 days of validation that all prequalification requirements have been met. Q. How will I be notified of the outcome of the audit process? A. At the audit closing session, the auditor will present a brief synopsis of the partner s opportunities for improvement identified during the audit and will highlight any open action items. The auditor will not indicate to which level the partner s service(s) will be certified. For open action items, the partner will be given an opportunity to provide written evidence of closure to the auditor within five business days after completion of audit. If unable to close out open action items within five business days, the partner should provide a corrective action plan to the Cisco Program Manager. The action plan must be fully implemented within an agreed-upon time period, not to exceed the stated get-well period. At the end of the time period, a visit by the auditor, Cisco Partner Support representative, or local Cisco SE may be required in order to verify closure of an action item. The designation decision will not be made until the corrective action plan is satisfactorily completed. During and after the audit, neither the auditor nor the Cisco CAM can make commitments regarding the managed service designation decision. The Cisco Program Manager will review the audit report and communicate results back to the partner within 20 business days of receipt of the audit report. Results will be ed back to the primary designation contact within the partner organization. Cisco shall decide at its sole discretion whether or not to designate partner s managed service(s). No statements by the auditor or its personnel will be binding upon Cisco. 10

11 Q. When a partner that is not currently a member of the Cisco Powered Program qualifies for the Cisco Powered Managed Service designation, how does the partner gain access to the Cisco Powered Program benefits? A. Upon qualifying for Cisco Powered Managed Service status within the Managed Services Channel Program, the partner receives membership in the Cisco Powered Program. The Cisco Powered Program office will contact the partner to help facilitate access to the program benefits. Q. Does the Cisco Managed Services Channel Program support managed optical services? A. Optical services are not currently part of the program. Because optical switches are often used for multiple customers traffic yet located on premises where one end user s traffic is separated by lambda, they are considered customer-located equipment (CLE). Service providers typically re-use optical switches for another customer at the end of contract term, such as add-drop muxes. Q. Does a Cisco Managed Services Channel Program partner need to be a Gold, Silver, Premier, or Select Certified Partner? A. No. A partner needs to have a valid SI or ICPA contact to participate and be certified under the Managed Services Channel Program rules. Q. What discount will be offered to Cisco Managed Services Channel Program partners? A. The available discount at which a partner may purchase managed service CPE products is dependent upon the level to which the managed service has been certified. Discounts are applicable only when buying direct from Cisco. The purchase price when buying from a distributor or global logistic partner will be negotiated directly with distributor or global logistic partner. The discount levels are as follows: Cisco Powered Managed Services: Discount 47% off GPL + 10% rebate on net amount Cisco Strategic Managed Services: 47% Cisco Legacy Managed Services: 42% Irrespective of the managed service, discounts will be available only for eligible managed service CPE. Products purchased for a partner s internal use, core infrastructure, or resale without the provision of a managed service are not eligible under the Managed Services Channel Program. Discounts awarded under the three discount levels cannot be combined. Q. Are these discounts noted under the program contractual discounts? A. The discounts are not contractual but are based on the program rules. As long as a partner maintains eligibility within the program, the partner will be entitled to the posted discounts. To access the list of program rules, conditions, and guidelines, please go to the Cisco Offer Based Channel Model Audit and Policies Document. Q. How long will my Managed Services Channel Program discounts be valid? A. Program discounts will initially be valid for 12 months from date of program acceptance. Program compliance and discount eligibility are assessed on an ongoing basis and validated annually. Partners found not in compliance may be removed from the program. 11

12 Q. Can other Cisco incentives be applied to CPE purchased under the Cisco Managed Services Channel Program? A. No. Managed Services Channel Program-specific incentives will be created after program general availability. Purchases made under the Managed Services Channel Program will not qualify for rebates or incentives from any of the following programs: i. Solution Incentive Program ii. Opportunity Incentive Program iii. Value Incentive Program iv. Cisco EUP promotions v. Infrastructure discounts Cisco Managed Services Channel Program rebates and discounts do apply when combined with the Technology Migration Program or Trade-In Accelerator Program, pursuant to the programs terms and conditions. Q. Does the new Managed Services Channel Program affect Cisco s resale incentive programs? A. The resale incentive programs (Value Incentive Program, Solution Incentive Program, and Opportunity Incentive Program) and the Cisco Managed Services Channel Program are mutually exclusive. Q. Will customer satisfaction surveys be part of the new managed service program? A. No. The resale customer satisfaction (CSAT) surveys are not required for CPE sold under the Cisco Managed Services Channel Program. The Managed Services Channel Program includes SLA criteria that promote high-quality service levels, as experienced by customers. By agreeing to offer their managed services with SLAs, program partners are binding themselves to a service level that is acceptable to customers. This is consistent with industry standards in the managed service business. Q. Can we apply for new managed services under the Cisco Managed Services Channel Program? A. At the annual recertification audit, a partner may choose to expand its Managed Services Channel Program approved managed services portfolio. Q. What is the process for inserting newly developed managed services into the review and audit process? A. Future managed services will be approved through an established development lifecycle. Input will be gathered from various sources, including but not limited to field personnel by way of various managed service constituents, business unit and technical group personnel, service providers, Cisco development organizations, Cisco marketing organizations, and customers. If you have a unique managed services opportunity that you would like to have considered for inclusion in the Managed Services Channel Program, please contact your CAM to discuss next steps. Q. Is there a Cisco Services program that is aligned with the Managed Services Channel Program? A. Cisco Services is currently developing a service program tailored for managed services. This new program will be piloted with a select number of partners in FY08 and become generally available in FY09. Until the Cisco Services managed services program is available, partners will have two options for service alignment with the Managed Services Channel Program. 1. Partners may continue to use their existing service programs (e.g. CBR, Shared Support, Co-brand Foundation, Collaborative Technical Services, etc) 12

13 2. Partners may use an optional bridge promotion. This optional promotion will provide additional incentive for new Managed Services Channel Program transactions. The promotion is anticipated to be available approx 90 to 120 days after the launch of the Managed Services Channel Program. Q. Can partners use their infrastructure service contract to attach service to products purchased through the Managed Services Channel Program? A. No, infrastructure contracts are not associated with the Managed Services Channel Program. Cisco Services is developing a service program tailored for managed services. Until this program is generally available in FY09, only programs such as Cisco Branded Resale (CBR), Shared Support, Collaborative Technical Services, and Co-brand Foundation can be used to attach services for products purchased through the Managed Services Channel Program. 13

14 Setup and Ordering Q. What needs to be in place before I can begin ordering under the Managed Services Channel Program? A. You must have successfully completed the application and approval process, and have the list of approved service IDs to be used during the ordering process. Q. What is required to place managed services orders using the Web-based Cisco Ordering Tool? A. The ordering process is similar to the general ordering process with the exception of two entry fields within the tool. When using the Ordering Tool, all Managed Services Channel Program partners will be required to enter data in two key fields. 1. Intended Use field Select Service Provision Use from a pull-down menu. 2. Promotion Code field Enter a unique service offering code that will be provided for each service. For more details, please refer to the Global Ordering and Process Document. Q. What is the Managed Services Channel Program service ID? A. The managed service ID identifies the direct order as a managed service order. This ID allows the correct discount to be applied at time of ordering. The managed service ID also flags the order for inclusion in the rebate calculation. Q. Will we have a single service ID per service that can be used globally? A. No. You will receive a theatre-specific set of managed service IDs for all qualified services. Q. How can I deliver products in geographic areas where I do not currently have a direct relationship with Cisco or a legal entity in the country I want to do business? A. Please contact a Global Commerce Specialized Partner to assist you in conducting business under these circumstances. To locate a partner, visit Global Commerce Specialized Partners. Q. What is an Indirect Channel Partner Agreement? A. The Indirect Channel Partner Agreement (ICPA) is a legal document containing terms and conditions that must be agreed to prior to ordering through your distributor. ICPAs are available by theater. You will need to register your company in a particular theater in order to be able to review and accept the local agreement. A list of ICPAs by theater can be found on the ICPA Requirements page. Q. Why am I required to register and accept an ICPA in theaters where I am purchasing products through my distributor? A. Partners that do not have a direct resale agreement with Cisco, or have a direct agreement but choose to purchase through a distributor, are required to register and then review and accept the terms and conditions of the ICPA. This agreement covers the basic necessities for title and software license transfer as well as general business terms and conditions for partners that wish to purchase Cisco products from a distributor. Q. If I am unable to identify a list of distributors, can Cisco provide me with a list of distributors so I can contact them to establish a relationship? A. Yes. Using your Cisco.com login, go to the Distributor Locator tool on Cisco Partner Central. 14

15 Q. Can I order products for different services on the same order? A. No. Each service must be ordered independently. There is no mixing of service IDs during the ordering process. This is very important: it is the only way to determine the correct discount to apply to the order as well as to ensure that Cisco Powered Managed Service designated orders are identified and included in the rebate calculation. Mixed orders will be rejected during the order validation process, which will result in delays processing the order. Q. How will ordering through my distributor under the Managed Services Channel Program be different than what I do today for regular resale purchases? A. The process is similar to what is done today when ordering products through your distributor. The additional requirement is to reference the correct managed service ID when ordering. Q. If I do not have a direct purchasing relationship with Cisco, or if I have a direct relationship but choose to purchase products through a distribution partner, will I receive the same discounts? A. The Managed Services Channel Program discount is provided directly to the distributor. The actual agreed-upon discount is negotiated between you and your distributor. Q. Can I place direct stocking orders under the Managed Services Channel Program? A. Yes. Direct stocking order purchases are allowed under the Managed Services Channel Program. Both direct stocking orders as well as Direct/2-Tier orders aligned to a specific end user will be validated through back-end audits of point-of-sale (POS) reports as provided by the enrolled partner base. This will include an analytical review of the turnover in order bookings (i.e., dollar amount/material cost and units) between Cisco s database and the POS reports as provided by the partner base. Inconsistencies or exceptions noted during this audit/review process will be investigated and further action will be taken as considered necessary to ensure that partners are complying with the terms of the program (bookings are aligned to Managed Services Channel Program vs. other program/contractual arrangements). Q. Can I purchase stocking orders through my distributor under the Managed Services Channel Program? A. No. You cannot purchase Managed Services Channel Program stocking orders from your distributor under the program. One important program requirement is that endcustomer information be entered during ordering. If purchasing products for the purpose of stocking, there would be no tie-back to the actual end customer; therefore, no verifications or validations could be performed. Q. How do I submit my POS data to Cisco? A. Partners should submit POS information manually by when first enrolling in the program; however, Cisco is currently developing a tool to allow for POS information to be transferred electronically. Q. What is the POS audit process? How often will audits happen? A. Please refer to the Cisco Offer-Based Channel Model Audit and Policies Document for process information. Q. How are rebates calculated? A. Please refer to the Cisco Offer-Based Channel Model Audit and Policies Document for process information. 15

16 Q. When will rebates be sent? In what form will they be sent? A. Please refer to the Cisco Offer-Based Channel Model Audit and Policies Document for process information. Q. Currently, the CPE title retained is purchased off SPA. The Cisco Managed Services Channel Program means a change in contracts. A. Cisco Customer Advocacy will provide a custom contract with all Managed Services Channel Program partners under the SI (and collaborative services) model that is equivalent to the partner s existing terms, with a few caveats. 16

17 Governance and Verification Q. Are there other validation requirements besides the initial service audit process? A. In addition to validating the POS reports through an official audit process, Cisco will assess the turnover rate in bookings by service-level type and tier. This analysis includes a comparison of both units and dollar volume between Cisco s internal Managed Services Channel Program bookings database and the POS database as provided by the applicable partner. Unfavorable trends (i.e., low turnover rates) will be flagged and investigated as considered necessary. Q. Why do I have to submit monthly POS information to Cisco? A. Submission of POS information is a program requirement. This is the only form of official evidence that a managed service transaction took place. As noted, such reports are subject to periodic audits to ensure that POS information provided is valid and in line with the stated rules of the program. Q. How will Cisco ensure that orders placed were applied to managed service customers? A. A scheduled audit of the POS data will be executed to confirm the product ordered was installed and being managed under the correct service and service tier. This is necessary, as actual data validation cannot take place until the product is removed from inventory and deployed in a managed service. To learn more about the POS audit process and policy, review the Cisco Offer-Based Channel Model Audit and Policies Document. Q. Where can I find the point-of-sale template? A. The point-of-sale template is included in the Cisco Offer-Based Channel Model Audit and Policies Document. Q. Will audits be conducted on the POS information provided? A. Periodic third-party audits will be conducted on the POS information based on a random sample that is applied as part of the documented audit process. Q. What type of information might be available to me regarding business reporting or business intelligence? A. Managed Services Channel Program enrolled bookings data will be provided and uploaded to the Managed Services Channel Program tool. This data will include detailed bookings reported down to the transaction level. Notable bookings criteria made available at the transactional level include: Sales Order Number (if direct) POS Transaction ID (if indirect) Cisco Powered Member Service Provider Managed Service ID or Code Net Bookings Transaction Date Partner Name Global Logistics Partner Name (if applicable) End-User Name Theatre Region Country 17

18 Financing and Cisco Capital Q. What are the typical financing needs of managed service providers? A. Managed service providers typically finance all fixed assets that are part of their production or managed service networks. They aim to eliminate the initial technology investment through financing and show profitability at the beginning of a managed services relationship with a customer. Q. What capabilities and experience does Cisco Capital bring to managed service provider financing? A. Cisco Capital has a team of dedicated leasing professionals that support managed service providers. The team has worked directly with managed service providers to structure large, customized leasing contracts. Q. What is the Financing for Instant Profitability offer for managed service providers? A. Cisco Capital is working closely with the Cisco channels organizations in each theatre to offer customized financing programs for eligible managed service providers that help them attain profitability. Q. What is Cisco Capital s strategy for managed service provider financing? A. Cisco Capital focuses on customized and aggressive finance solutions for managed service providers that meet, and often exceed, their business requirements and priorities. Q. What was the dollar volume of Cisco Capital s managed service provider financing in FY2007? A. Cisco does not disclose leasing revenue volume. Q. What theatres offer the greatest opportunity for financing managed service providers? A. Cisco has significant volume in Europe, EMEA, and Asia Pacific, and to a lesser degree in emerging markets. Q. What is the market opportunity for Cisco Capital financing of managed service providers? A. The leasing volume opportunity for Cisco Capital is estimated to be in the billions of dollars per year globally. Q. What are the benefits to a managed service provider for financing with Cisco Capital? A. Benefits to the service provider include: Potential for immediate profitability Meet customer demands Eliminate ownership burden Grow the business Match expenses with cash flow and revenues Manage the equipment lifecycle Increase control over customer relationship lifecycle Q. Who owns the equipment that is financed with Cisco Capital? A. Cisco Capital retains ownership of all equipment leased through a Fair Market Value (FMV) lease. 18

19 Q. If a managed service provider wants to add to or change any equipment during the lease, whom should they contact? A. They should contact either their Cisco account manager or their Cisco Capital representative, who will be able to engage members of their entire Cisco support team to advise them on the options available to meet their specific technological and business needs. Q. What are the overall benefits of leasing with Cisco Capital? A. Benefits include: Accelerate adoption of state-of-the-art technology and services with minimal initial investment and predictable, manageable payments. Conserve valuable capital by spreading the costs of technology over time, preserving lines of credit, and freeing liquid capital for other business priorities. Reduce total cost of ownership by applying financial services management across the entire lifecycle of the solution, ensuring benefits from the most up-to-date technology at the lowest cost. Simplify budgeting by enabling the use of operating expense (OpEx) budgets to acquire equipment now. Reduce the impact on book earnings, since some lease payments are made from pre-tax rather than after-tax earnings and, unlike capital purchases, require no public disclosure. Protect against obsolescence and financial risk, allowing the ability to continually upgrade to state-of-the-art technology (even during the lease term), without large new capital investments. Lease with maximum flexibility using payment schedules to match cash flow, budget, and ongoing technology upgrade requirements. Simplify technology acquisition with a fast, easy documentation process and the ability to combine solutions, software, and services into a single periodic payment. Q. Where can customers and resellers get more information about managed service provider financing? A. For more information, visit the Cisco Capital Finance page for Channel Partners. 19

20 Managed Services Definitions Appendix Managed Network Services are the services offered by a partner as their primary business model, which may include the following: access to the Internet, data, voice, and video transmission services delivered over the partner s communications network. Managed Edge Services are services that are not network services. Examples include: managed IP telephony, security services, storage, and wireless networking provided by a partner to an end user. Service-Level Agreement (SLA) means a contractual agreement between the partner and an end user that clearly defines the terms and levels of service, response, and support provided to the end user by the partner for an ongoing managed service. Customer Premise Equipment (CPE) is defined, for purposes of the Cisco Managed Services Channel Program, as product used by a partner to deliver a managed service (as defined above) where the product is either: i) Dedicated to a single end user and located at an end user s premises; OR ii) Hosted, but dedicated to a single end-user customer; OR iii) Customer-specific equipment The scope of this definition may be expanded at Cisco s discretion to include certain network products that are not centrally managed, but are connected to a centrally managed product and are essential to the delivery of a managed service. Examples of such network products might include routers and switches used to terminate transport circuits, IP telephony handsets, and powered Ethernet LAN cards and switches. Customer-Specific Equipment (CSE) is defined, for purposes of the Cisco Managed Services Channel Program, as product dedicated to a single end user and located in a partner s hosting center or point of presence (PoP). Examples would be managed, hosted call managers dedicated to a single enterprise and operated from a hosting center. Proactive Monitoring means that the partner, at a minimum, uses centralized network management systems and processes to automatically detect service failures and problems impacting the product. Remedial Capability means that the partner has the capacity to remotely troubleshoot and correct incidents and faults using centralized network management systems and processes from a network operation center. CPE Title-Held or Title-Retained means CPE that has been purchased by a partner for use in the delivery of managed services to an end user. Title or ownership of the CPE is retained by the partner. The end user pays the partner for use of the CPE as part of a managed service contract. CPE Title Transfer or Resale means CPE that has been purchased by a partner for use in the delivery of managed services to an end user. Title or ownership of the CPE is transferred or resold by the partner to the end user or to a finance company on behalf of the end user. Infrastructure means shared network elements, such as core, aggregation, or multiservice edge IP structures that are used by a partner to build, deploy, and maintain network services. The infrastructure is used to support multiple network services and is used as a shared resource to convey the traffic of multiple customers. Except in the case of virtual managed service providers, the infrastructure is generally owned by the partner, and is not subject to Cisco Managed Services Channel Program terms and conditions. 20

21 Americas Headquarters Cisco Systems, Inc. 170 West Tasman Drive San Jose, CA USA Tel: NETS (6387) Fax: Asia Pacific Headquarters Cisco Systems, Inc. 168 Robinson Road #28-01 Capital Tower Singapore Tel: Fax: Europe Headquarters Cisco Systems International BV Haarlerbergpark Haarlerbergweg CH Amsterdam The Netherlands www-europe.cisco.com Tel: Fax: Cisco has more than 200 offices worldwide. Addresses, phone numbers, and fax numbers are listed on the Cisco Website at Cisco Systems, Inc. All rights reserved. CCVP, the Cisco logo, and the Cisco Square Bridge logo are trademarks of Cisco Systems, Inc.; Changing the Way We Work, Live, Play, and Learn is a service mark of Cisco Systems, Inc.; and Access Registrar, Aironet, BPX, Catalyst, CCDA, CCDP, CCIE, CCIP, CCNA, CCNP, CCSP, Cisco, the Cisco Certified Internetwork Expert logo, Cisco IOS, Cisco Press, Cisco Systems, Cisco Systems Capital, the Cisco Systems logo, Cisco Unity, Enterprise/Solver, EtherChannel, EtherFast, EtherSwitch, Fast Step, Follow Me Browsing, FormShare, GigaDrive, HomeLink, Internet Quotient, IOS, iphone, IP/TV, iq Expertise, the iq logo, iq Net Readiness Scorecard, iquick Study, LightStream, Linksys, MeetingPlace, MGX, Networking Academy, Network Registrar, Packet, PIX, ProConnect, ScriptShare, SMARTnet, StackWise, The Fastest Way to Increase Your Internet Quotient, and TransPath are registered trademarks of Cisco Systems, Inc. and/or its affiliates in the United States and certain other countries. All other trademarks mentioned in this document or Website are the property of their respective owners. The use of the word partner does not imply a partnership relationship between Cisco and any other company. (0705R) Americas Headquarters Cisco Systems, Inc. 170 West Tasman Drive San Jose, CA USA Tel: NETS (6387) Fax: Asia Pacific Headquarters Cisco Systems, Inc. 168 Robinson Road #28-01 Capital Tower Singapore Tel: Fax: Europe Headquarters Cisco Systems International BV Haarlerbergpark Haarlerbergweg CH Amsterdam The Netherlands www-europe.cisco.com Tel: Fax: Cisco has more than 200 offices worldwide. Addresses, phone numbers, and fax numbers are listed on the Cisco Website at Cisco Systems, Inc. All rights reserved. CCVP, the Cisco logo, and the Cisco Square Bridge logo are trademarks of Cisco Systems, Inc.; Changing the Way We Work, Live, Play, and Learn is a service mark of Cisco Systems, Inc.; and Access Registrar, Aironet, BPX, Catalyst, CCDA, CCDP, CCIE, CCIP, CCNA, CCNP, CCSP, Cisco, the Cisco Certified Internetwork Expert logo, Cisco IOS, Cisco Press, Cisco Systems, Cisco Systems Capital, the Cisco Systems logo, Cisco Unity, Enterprise/Solver, EtherChannel, EtherFast, EtherSwitch, Fast Step, Follow Me Browsing, FormShare, GigaDrive, HomeLink, Internet Quotient, IOS, iphone, IP/TV, iq Expertise, the iq logo, iq Net Readiness Scorecard, iquick Study, LightStream, Linksys, MeetingPlace, MGX, Networking Academy, Network Registrar, Packet, PIX, ProConnect, ScriptShare, SMARTnet, StackWise, The Fastest Way to Increase Your Internet Quotient, and TransPath are registered trademarks of Cisco Systems, Inc. and/or its affiliates in the United States and certain other countries. All other trademarks mentioned in this document or Website are the property of their respective owners. The use of the word partner does not imply a partnership relationship between Cisco and any other company. (0705R)