As companies continue making a digital transformation, software plays an increasingly important role in their business processes. Many organizations struggle to manage multiple complex licenses, juggle contracts that expire at different times and face compliance challenges. In fact, IDC predicts software license complexity indirectly costs organizations an average of 25% of their software license budgets. These companies need software they can purchase when they want, deploy when and how they need and easily keep up-to-date.
Over the past year, Cisco made several updates to its software sales model to simplify the way customers consume software. One example is Cisco Enterprise Agreement (EA), a single, simple agreement that lets customers use the products and services they need today, then scale and add additional capabilities as they grow—simply and without penalty. Available in 3- and 5-year contract terms, the Cisco EA spans infrastructure, security and collaboration portfolios today, with other Cisco software capabilities being added over time.
Eliminate retroactive software license penalties
The Cisco EA is designed to encourage customers to grow by providing a 20% growth allowance and a unique “True Forward” provision. Cisco EA includes 20% extra software and software support services (SWSS) that customers can use toward unforeseen growth without purchasing more. Unlike the traditional billing model used by most software vendors, which entails a periodic review of customer software usage and retroactive billing for overuse, Cisco’s True Forward provision eliminates this penalty. Instead, the customer’s contract is revised at the beginning of its next billing period. And, to provide customers with visibility, Cisco EA also includes access to an online portal that lets customers see what software has been purchased, has been deployed and is due for renewal.
The Cisco EA includes suites of products and support services for collaboration and Cisco ONE Software for infrastructure and security. Customers can choose a single suite or a combination and get a single agreement for all products and services. These suites include:
- Collaboration—Cisco Spark Flex Plan, Cisco Unified Communications Suite, Cisco Meeting Server add-on Suite, Cisco WebEx On-Premises Suite
- Infrastructure—Cisco’s infrastructure and data center technologies delivered through Cisco ONE Software suites: switching, wireless, WAN, Data Center Networking and Data Center Cloud and Compute
- Security—Email Security Suite, Cloud and Web Security Suite, Policy and Visibility Suite and Security Essentials Suite
Use these tools and services to build recurring revenue faster
Cisco reports that its most profitable partners are achieving at least 40% of their Cisco practice revenues from cloud, support, software licenses and other recurring sales. Knowing that recurring-revenue sales are a win-win, Cisco has developed several programs, services and offerings designed specifically to educate and enable partners to grow their recurring revenue streams. Here’s a short summary:
- Cisco Impact and AutoQuote. Powered by data-driven automation, these tools and others can give partners entirely new capabilities and a leg up for capturing recurring, subscription and deferred revenue—and competing more effectively as market dynamics change.
- Today’s buyers want ROI and other positive outcomes, which is why actively managing the post-sales relationship lifecycle—ensuring customers are gaining full value from the solutions they’ve purchased—is essential. The Lifecycle Advantageprogram combines analytics, automation and personalized content to enable partners to nurture adoption and customer success. With Lifecycle Advantage, partners can gain digital capabilities and fuel email campaigns that address every stage of the post-sales journey. Partners can also use data and analytics to simplify software and service renewals and more easily predict and anticipate customers’ needs and address them proactively.
Partners who piloted Lifecycle Advantage reported customer reach increased five times, click rates increased nine times and renewal rates increased 20%. Most importantly, using data, analytics and forward- and backward-looking metrics, partners can ensure the Cisco products and services they offer deliver the business outcomes customers signed up for.
- For partners who are new to the recurring-revenue business model, Cisco created SuccessHub, a one-stop portal that guides Cisco partners to establish a best-in-class customer success practice. Featuring a rich and comprehensive library of tools and resources—videos, webinars, white papers, playbooks, best practices and more—so that partners can learn how to build recurring revenue while creating long-term customer relationships.