Cisco Westcon agreement eases foreign market entry for VARs

By Rivka Gewirtz Little, Site Editor 15 Apr 2009 | www.SearchNetworkingChannel.com

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Until now, U.S.-based Cisco partners extending networks into other countries have had to negotiate separate distribution and fulfillment deals for each market they entered. Cisco and Westcon have also had to negotiate separate deals for each country.

The new distribution agreement provides Cisco and Westcon partners or customers a single contract to manage global, regional and local deals with common terms and conditions. This contract will replace the independent regional contracts that once made global network build-out a cumbersome process.

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"Resellers who are now entering new countries [may not] know how to handle import duties," said Dave O'Callaghan, Cisco vice president of distribution, worldwide channels. "They don't understand the logistics of getting product to the company. There are regulatory issues regarding which products can and can't be shipped. The challenge for the reseller sitting here in the States, even if they are a billion-dollar company, is: How do they manage the complexity of that kind of deployment?"

As part of the deal, Westcon has established a global desk to "take partners through the entire process" for each transaction in every market, said Dean Douglas, president and CEO of Westcon Group.

Tackling multinational projects is a challenge affecting a growing number of partners now that globalization has enabled even small and midsized companies to build branch offices or factories abroad.

"IP doesn't recognize borders," said Mike Prebilcock, CEO of MCPc, a Cleveland-based solution provider and Cisco partner. "Our customers are pulling us to do global things. They love what we do here in the States, and they would love us to represent them more completely [abroad]."

Cisco and Westcon must work quickly to support partners like MCPc.

"We used to get a request [for global build-out] once a month," Douglas said. "Then we got it once a week. Now we think it's going to start approaching 30% of our revenue stream."

Cisco acknowledged last November that enablement for multinational projects was a problem when the company announced its Global Resale Agent program, which helps solution providers in different countries partner with one another to address both network implementation and offering services across borders. The program included a mapping system for partners to find one another in various markets, as well as best practices for building alliances.

"There are about 4,000 emerging multinational end customers that Cisco has failed to be able to serve on a truly global basis," O'Callaghan said.

While the Global Resale model will help solution providers partner across borders, the Cisco-Westcon distribution agreement "puts the logistics centerpiece into that relationship," he said.

The Cisco-Westcon agreement will also address the speed of product fulfillment now that Westcon will manage Cisco product centrally for all of its geographic markets.

"This enables Westcon to set up lanes between theaters and inventories and shortens our customers' and partners' lead times and gives us a high fill rate," O'Callaghan said. "It also lowers potential stock rotation. In the past, each country would do its own fulfillment and rotation."

Also, because Westcon has been working in emerging markets for so long, the distributor expects to ease the challenge for Cisco partners to address a plethora of regulatory and compliance issues that vary for each country.

"Last year, we did business in 60 countries, and all of those countries had their own regulatory environments," Douglas said. "[The agreement] sets about a consistent framework for doing business with Cisco so we don't have to worry about the nuances with each of the country organizations. We can take a straightforward process and then adapt regulatory issues to it."

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