CRN Exclusive: Cisco Launching Application Bundles For Intercloud; Recruiting 'Significant' Number Of New Cloud Channel Partners

Cisco Systems plans to launch new application bundles for channel partners to sell as the networking giant redirects its Intercloud focus on building end-user demand.

The company is also actively recruiting brand-new partners as the company's cloud vision enters its "next phase," Nick Earle, senior vice president of global cloud and managed services, sales told CRN on Friday in an exclusive interview.

"We're going to be releasing some hybrid cloud bundles specifically for the channel, which represents Intercloud-enabled solutions they can sell directly to the end user," Earle said. "You'll see us moving into the application space with Intercloud-enabled hybrid cloud bundles."

[Related: Channel Veteran Peres Leaving Cisco]

Cisco for the past 15 months has been focused on building the supply capacity for Intercloud, recruiting service providers and solution providers as Intercloud partners with data centers that are part of Cisco's "cloud of clouds" vision." Now Earle's group is reorganizing -- he calls it a "realignment" -- and switching gears to focus on building end-user demand.

Part of that effort will include the rollout of the application-focused channel bundles, expected to launch by the end of December, which will be built around applications from Cisco as well as third parties, Earle said. Cisco's first Intercloud bundle, its OpenStack Private Cloud Bundle, is based on its Metacloud acquisition and launched in April at the 2015 Cisco Partner Cloud Summit, but that did not include an application, he said.

"Going forward, it's all about the network-enabled applications," said Earle. "Having applications that are cloud-enabled and in our case, leverage the power of the network, is the real value for us."

The San Jose, Calif.-based networking giant will focus heavily on OpenStack solutions.

"Everything we make at Cisco will be available as either a [Software-as-a-Service] or managed service offering running on OpenStack," said Earle. "You're going to see a conveyor belt of Cisco applications as we go through the next 12 months ... becoming available on our OpenStack platform."

Earle said he has a "very large quota" to meet in fiscal year 2016 for the adoption of Intercloud technologies and SaaS offerings by end users. "I have a goal to grow that very aggressively in FY16," said Earle, declining to provide details.

The rollout of the new channel bundles will provide an opportunity to recruit brand-new partners for its Intercloud channel.

"There is absolutely an opportunity for brand-new partners, partners who don’t have a legacy of reselling our hardware and who actually are SaaS partners … and we are actively doing that," said Earle, citing partners working with Hadoop big data technology or vendors such as Mirantis, a Metacloud competitor, as prime targets. "There will definitely be a significant number of new partners that are recruited and brought into the Cisco partner ecosystem as a result of this. … I've got to have those partners to drive adoption."

Some of Cisco's current channel partners describe Cisco's Intercloud strategy up until now as "fuzzy," "confusing" and as having yet to catch on with customers.

"It's awesome on PowerPoint, but it's not translating to the street very well," said a solution provider and Cisco Gold partner who asked not to be identified. "So that's the gap, is taking it off the PowerPoint and getting it into the partners' business, and that's where the disconnect has been."

Another solution provider and Cisco partner on CRN's 2015 Solution Provider 500 list says customers aren't "knocking on doors" seeking Intercloud solutions.

"I've seen a lot of people comment that they haven't seen a working Intercloud," said the executive, who declined to be named. "What they see is demos that include canned content, but never a working demo and that always concerns me. We've done some work on Intercloud ourselves, but we're stuck on some integration with [Amazon Web Services]."

"There are several [partners] doing a lot of business, but it's not universal, I accept that," Earle said, when asked about the concerns partners have expressed to CRN. This next phase of the Intercloud journey will help partners drive sales, he said.

Partners contacted by CRN were generally optimistic about Cisco's new application bundles and "end user" strategy, but said they don't expect "meaningful" Intercloud sales growth within the next six to 12 months.

"Conceptually, we love the Intercloud idea, and these bundles will probably eventually be put to good use," said another solution provider and Cisco Gold partner in the Northeast. "Partners are going to stick through this with Cisco, obviously, but it's taken some time and some mixed messaging over the years. … Hopefully the new changes in [Cisco's cloud division] and the application packages will finally put Intercloud on the right course."

The shift comes as the networking giant's Cloud and Managed Services Organization begins to reorganize and becomes absorbed by Cisco's overall sales organization under the leadership of Chris Dedicoat, Cisco's recently named executive vice president of worldwide sales.

"So now we are part of the main sales environment, which is very important because we're not a satellite organization in services anymore -- we're now part of the main worldwide field sales operations, and that shows the importance of cloud to Cisco," said Earle.

Earle likened the move to his days running an incubator at HP under then-CEO Carly Fiorina, saying the success metrics are similar. "Success is when you fold what you've created and built back into the mother ship so that it can scale," he said.

Channel chief Wendy Bahr will be tasked with cloud-enabling partners; Nick Adamo, senior vice president Global Service Provider, is set to lead Intercloud for solution providers; while Earle will be responsible for "incubating the next generation" of cloud solutions with a focus on end-user adoption.

Cisco's new Intercloud strategy comes on the heels of the company's revealing that channel veteran Edison Peres, who's been leading Cisco's Intercloud channel effort as senior vice president of Cisco's Cloud and Managed Services Partner Organization, is leaving the company Nov. 1.

Peres will move into an adviser role over the next few months to help with the transition before retiring. Earle said the timing of Peres' retirement and the organizational changes were "not really related."

PUBLISHED AUG. 7, 2015