Cisco SmartCare Examined

The most interesting thing about Cisco’s new SmartCare announcement (see lead story) is not the fact that it can help prevent network outages before they emerge. It’s the way that the contract binds customers to the specific channel partner who sold it to them.

Leveraging "phone home" capabilities built into the equipment, Cisco will receive ongoing reports about the health of the SMB network. The vendor will then forward that information to the channel partner who sold the SmartCare contract, who can then make the necessary adjustments, plan network upgrades, etc. By purchasing the contract, the end customer in effect selects that partner as the only recipient outside of Cisco to receive that data. Other partners cannot receive it, regardless of whether the customer’s wants them to. In fact, even the customers, themselves, cannot see the data unless the contracting partner decides to show it to them.

Cisco would be well-advised to revisit this single-access framework. While I agree that you don’t need multiple channel partners to respond to a network that merely needs to be tweaked, the long-term sales implications go much further than that. Many decision-makers in the small-to mid-market range prefer to work with two or more partners on a relatively equal footing. Since the decision-makers, themselves, may/may not be technology gurus, they like being able to compare different proposals, validate pricing, and generally keep everything balanced.

There’s nothing about SmartCare that contractually forbids customers from working with more than one partner, but consider this: Channel partners are always playing for the long-term customer relationship. Even if they are there to accomplish one objective, they want to parlay that single objective into a long-term relationship. But if a vendor entrenches the incumbent through greatly enhanced access to information, that opportunity for competition within the channel becomes disrupted.

Until the competitor convinces the customer to transfer the SmartCare contract to them, they will always be at a major disadvantage with respect to their knowledge of the customer’s network performance. And if they’re going to be at a major disadvantage, wouldn’t they be better off spending their time on other sales opportunities? After all, helping this customer with the issue at hand does not necessarily mean the customer will transfer the SmartCare contract to them, thereby making them the incumbent. Should the competing partner demand the transfer up-front, in order to justify their time? What about the impact on the customer’s relationship with other partner? Is the customer who’s now caught in the middle still happy that he bought the contract? Or will the customer try to play one partner off the other by passing the contract back and forth like a hockey puck?

There are enough potential headaches in this for Cisco to lead us to conclude that the vendor did not design this potential situation purposefully. They likely assumed that a customer does not need more than one partner to maintain the network. In that limited context, they would be correct.

But there’s a lot more at-stake here than the delivery of services. This current version of the program will have a huge impact on account control, whether Cisco intended it that way or not.

It seems as though a solution should be within reach. Perhaps Cisco should consider leaving the access decision to each respective customer. If the customer wants to leave everything to one partner, so be it. If they want to look at the data themselves, why not? If they want multiple partners to be able to eyeball the data, that should be fine too.

Despite all of its complexity, the Cisco channel program has, over the years, done a pretty responsible job of rewarding partners who grow with technology and maintain customer satisfaction. No doubt the vendor wants to entice partners to jump on their new collaborative services bandwagon, but the current rendering of the SmartCare program has extensive ramifications worthy of reconsideration.

• Cisco