© 2008 Cisco Systems, Inc. All rights reserved.Cisco ConfidentialC97-480254-00 1 Cisco Channel Partner Value Incentive Program: FY2009 Program Evolution

© 2008 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialC97-480254-00 1

Cisco Channel Partner Value Incentive Program:FY2009 Program Evolution Update

January 2008


Cisco Channel Program Evolution

The Network has become the platform for integrating multiple advanced technology solutions.

The Cisco® Channel Partner Program is evolving its business view and program model to one that is consistent with this Network centric model

The Value Incentive Program will be part of this evolution, facilitating a consistent view across channels


The Cisco Value Incentive Program

The Cisco Value Incentive Program (VIP) for Advanced Technologies is a comprehensive incentive program designed to increase margins for Cisco channel partners that resell solutions for:

Cisco Unified Communications

Security

Wireless

Data Center

The Value Incentive Program continues to focus on advanced technology sales


In Line with the Cisco Channel Partner Program Evolution, VIP Is Evolving and Increasing Benefits for Partners that Sell Advanced Solutions within an Eligible Technology

VIP Program Evolution

Cisco’s channel model supports the development of a partners’ practice to include lifecycle services (e.g., service)

Technology evolution now makes it capable to deliver Integrated products, such as the Cisco ISR (Integrated Service Router), which are capable of delivering multiple technology solutions in a single platform

Partners that sell integrated technology products will earn incentives across the technologies for which they are specialized and enrolled in VIP


Focusing Incentives Precisely on the Advanced Technology Aspects of a Sale through Allocations

VIP Evolution and the Cisco Allocated Model

Prior to August 2007, Cisco allocated part numbers 100 percent to a specific technology across all business models

In August 2007, Cisco introduced an allocation model which apportions the value of integrated products to their respective technology category

Cisco waited one and a half years to migrate VIP to the allocated model to ensure system stability and tool automation for our partner community

Beginning in VIP13, VIP is adopting Cisco’s allocated model, placing more focus on advanced technologies


SKU List

The allocation model affects AT enabled routers not stand-alone appliances. This accounts for less than 5% of the total SKUs.

- UC 1%, Security 16%, Wireless 1%

The majority of the UC SKUs impacted by allocations are in the foundation category, which further emphasizes a focus on the advanced technology sales


Technology AllocationsWhat Is an Unallocated Part?

Example of an Unallocated Part:

Part Number XYZ: $100—has both unified communications and security technologies

The entire $100 is associated to only one technology, unified communications or security

Associating Bookings Revenue in a Multi-Technology Part to

One Specific Technology

7


Associating Bookings Revenue in a Multi-Technology Part to

Multiple Technologies (Commonly Bundles)

8

Technology AllocationsWhat Is an Allocated Part?

Example of Bookings Allocation:

Part Number XYZ: $100—has both unified communications and security technologies

A percentage of the $100 is allocated each to unified communications and security

The net percentage allocation to technologies must equal 100 percent

If 70% is allocated to unified communications and 30% to security, then $70 bookings is for unified communications and $30 is for security


Effects on PartnersAllocated Model

Partners have the opportunity to continue to earn a similar level of incentive payments

Incentive payout percentages are currently in a final review process and may change from current rates

Partner reporting applications will be updated to allow partners to seamlessly manage this transition

The three technologies below will be transitioned:

Unified communications

Security

Wireless

9


Unallocated Structure in VIP12

Product IDAdvanced Technolog

y

Allocation Percent

Payout Rate

Total Book Net

Allocated Book Net

Allocated Book Net Payment

C2801-VSEC-CCME/K9

Unified Commun-

ications

100%Foundation

15%$1,295.00 $1,295.00 $194.25

CISCO1841-HSEC/K9

Security 100%Foundation

6%$2,995.00 $2,995.00 $179.70

Total $373.95

AdvancedTechnology

AllocatedInput

Set byProductFamily

Total Book Net xAllocation

Percent

AllocatedBook Net x

PayoutRate

FromGlobal

Price List

Set by product family


Payout Categories Described

VIP12

Foundation

Advanced

VIP 13

Category A

Category B

Category C


Payout Rates

Unified Communica

-tions

Unified Communica

-tions Express

Security Wireless

Category A 21% 16% 14% 8%

Category B 16% 12% 6% 3%

Category C 12% 12% 12% 12%


Allocated Structure in VIP13

Product IDAdvanced Technolog

y

Allocation Percent

Payout Rate

Total Book Net

Allocated Book Net

Allocated Book Net Payment

C2801-VSEC-CCME/K9

Security 40%Payout

Category C12%

$1,295.00

$518.00 $62.16

Unified Communi-

cations50%

Payout Category C

12%

$647.50 $77.70

CISCO1841-HSEC/ISR-K9

Security 70%

Payout Category C

12% $2,995.00

$2,096.00 $251.52

UnifiedCommuni-

cations30%

Payout Category C

12%$898.50 $107.82

Total $499.20

AdvancedTechnology

AllocatedInput

Set byProductFamily

FromGlobal

Price List

Total Book Net xAllocation

Percent

AllocatedBook Net x

PayoutRate

Set by product family


Partner Program View

Partner Program View provides daily visibility to your progress to date in the current Value Incentive Program

Partner Program View will provide visibility to bookings based on the allocated model, beginning with the VIP13 program, w.e.f. on March 2009


Partner Program View

Bookings in VIP13 will be allocated bookings Incentive payments are based on allocated shipments New columns will break out allocation information and display the three

Technology Category A, B, C If a part number is split across multiple VIP technologies, allocations to

technologies for which you are Not enrolled display in the Ineligible Bookings Report


Next Steps

Continue to accelerate advanced technology sales

Enroll in VIP13


For More Information

http://www.cisco.com/web/AP/partners/partner_popup.html


Documents

© 2008 Cisco Systems, Inc. All rights reserved.Cisco ConfidentialC97-480254-00 1 Cisco Channel Partner Value Incentive Program: FY2009 Program Evolution