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© 2006 Cisco Systems, Inc. All rights reserved. Cisco ConfidentialPresentation_ID 1

Commitment to Partner Profitability

CISCO VALUE INCENTIVE PROGRAM PERIOD 13

February 3, 2009


Cisco Value Incentive Program

Commitment to Partner Profitability

February 3, 2009

Aug 11, 2005


Agenda

� VIP 13

�What’s New: Masters and UC increase payout, Allocations

�Security Overview

�Unified Communications Overview

�Wireless LAN Overview

�Program Rules

�Global SAT details

�Program Summary


Cisco Value Incentive Program Period 13

Program Enhancements For FY’09


Program Foundations

� Cisco Value Incentive Program is a key component of Cisco’s commitment to Partner Profitability

� Voice, Wireless LAN, Security products and newly introducing Data Center included

� Ongoing program with 6 month payouts

� Reviewed for periodic enhancements

� Should evolve with customer & market needs

� Should build and reward partner competency in areas valued by the customer

� Should drive the correct behavior and be forward-looking

� Should align direct sales force and partner incentives

� Promotes the value of the integrated Cisco infrastructure advantage (IIN)


What’s New

VIP Period 13Payout % ChangesAllocations


VIP 13 Payout Structure

12%5%10%5%10%DC

12%3%8%3%8%WLAN

12%6%14%6%14%SEC

12%12%16%10%16%UCX

12%16%21%15%21%UC

CAT CCAT BCAT AFoundationAdvanced

VIP 13VIP 12

Category C represents Allocated Products All tech’s same %

Gold = + 1%

Master = 2% moving to 3%


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


Allocated Structure in VIP13

30%

70%

50%

40%

Allocation Percent

$107.82$898.50Payout

Category C12%

UnifiedCommuni-

cations

$77.70$647.50Payout

Category C 12%

Unified Communi-

cations

$499.20Total

$251.52$2,096.00

$2,995.00

Payout Category C

12%Security

CISCO1841-HSEC/ISR-K9

$62.16

Allocated Book Net Payment

$518.00

$1,295.00

Payout Category C

12%Security

C2801-VSEC-CCME/K9

Allocated Book Net

Total Book Net

Payout Rate

Advanced Technolog

yProduct ID

AdvancedTechnology

AllocatedInput

Set byProductFamily

FromGlobal

Price List

Total Book Net xAllocation

Percent

AllocatedBook Net x

PayoutRate

Set by product

family


Security

VIP Period 13Program Specifics


Security Market Dynamics

� Security is of central importance to all businesses

� Networks and the Internet are now vital parts of most business and commercial processes.

� High reliance on the Internet means businesses require safeguards for network availability and protection against data theft and corruption of information.

� Today’s Security needs are more complex

� Today’s threats are more sophisticated and increasingly varied.

� The network must be secure throughout – not just at the perimeter:

� Solutions must thus address multiple types and layers of risk and must be integrated, interactive and adaptive.

� Market trends show higher growth in advanced solutions compared to core security technologies

� Synergy Research Group:

� Advanced Security solutions (e.g. Intrusion Protection, Adaptive Desktop Security, Network Admission Control) will see rapid growth.

� Core Security solutions (Firewall, VPN) are now well established and part of the network.

� End-users are increasingly selecting vendors and partners based on Security competence and the ability to deliver advanced security solutions.


Channel Imperatives for Security

� Channel Goals

� Drive partner growth and profitability

� Ensure every partner provides Core Security solutions with every network sale

� Empower partners to invest in selling Advanced Security solutions – e.g. a self-defending network with every sale

� Channel Strategies

� Build channel capacity that can sell and deliver Advanced Security solutions

� Provide tools and incentives to partners to build Advanced Security Practices, including life cycle and professional services

� Encourage Core security solutions with all network sales


VIP 13 Objectives

� To accelerate the building of Advanced Security Practices:

�Maintained consistent incentive payout percentages

�Intended to support partners in their development of practices around the leading edge, more complex security technologies

�Maintained the number of product families in both the foundation and Advanced category


Summary of VIP13 Security Family Changes

Category C

Category B

Category A

VIP13

12%N/ACategory C is a newly created category for the allocated SKU’s

SecurityCORE (routers and switches)

6%Category

FoundationNo changeSecurity

Foundation Security

Appliances

No change

Change description

Security

VIP Technology

Category

14%Category Advanced

Advanced Security

Appliances

VIP13 Payout Level

VIP12Product Family

� Security appliances have a 100% allocation and retain the same payout levels in VIP13 as in VIP12 (Cat “A” = 14%, Cat “B” = 6%). Security appliances include: ASA Firewall, FW blades (SSL, AIM, CSC), MARS, CS-MGR, IPS/IDS, CCA, CSA, etc.

� Infrastructure (CORE) products (routers and switches) have allocation levels less than 100% and will move to Category “C” with a payout level of 12%.

$0

$0

$0

Net Change

$60 (12% on 50% of allocated value)

$210 (14%)

$60 (6%)

VIP13 Payout

$60 (6%)50%$1,000ISR: CISCO2811-HSEC/K9

$210 (14%)100%$1,500ASA Firewall with AIM Module

(Advanced)

100%

Allocation

$1,000

Example Net Price

$60 (6%)ASA Firewall (Foundation)

VIP12 PayoutProduct Family

Payout Examples


VIP Security Program: Historical Evolution

+2%

+1%

--

14%

6%

X

X

X

VIP12

+2%

+1%

--

14%

6%

X

X

X

VIP11

+2%

+1%

--

14%

6%

X

X

X

VIP10

+3%

+1%

--

14%

6%

12%

X

X

X

VIP13

+1%

+1%

--

14%

6%

X

X

X

VIP9

+1%

+1%

--

14%

6%

X

X

X

VIP8

Master Specialization payout

Gold Cert. payout

--

14%

7%

X

X

X

VIP7

--

14%

7%

X

X

X

VIP6

2%Growth payout

10%Base payout

X

X

VIP5

Broaden Security Focus

Build Security Practice

Partner Profitability


VIP 13 Security Payout

3% product shipmentsMeet program exit criteria Masters

1% product shipmentsMeet program exit criteriaGold

Meet program exit criteria.

Requirement

14%/6%/12% Category Foundation

product shipmentsCategory A/B/C

Security

� Simplified requirements - only three components:� Specialization: Must maintain valid Advanced Security Specialization for the entire

program� Sales volume: Minimum bookings: US$20,000 net bookings in qualifying

VPN/Security SKUs for specified dates. � Customer satisfaction: Average customer satisfaction score: 4.40 or higher on all

surveys received for specified dates.


Partner Benefits of VIP 13 Security Program

� ROI: VIP 13 payouts help offset start-up costs (training, etc.) related to selling advanced products.

� Maintain higher reward for Gold Certified and Master Specialized investment


Unified Communication



Voice Market Dynamics

� Unified Communication has become mainstream

� 2005 the cross-over year: more Unified Communications than TDM

� Commercial developing and fastest growing

� Customer demand for Unified Communications applications is accelerating

�Faster growth for applications than infrastructure

� Unified Communications voice infrastructure growth rate will continue strong (30-35%)

� Unified Communications applications growth rates will be high (50-60%)


Channel Imperatives for Unified Communications

� Channel Goals

� Build channel capacity and capability on Voice Applications

� Upsell installed Unified Communications customers with new or extended applications

� Make Applications a more significant part of every Unified Communications sale

� Improve partner profitability and services revenue

� Channel Strategies

� Provide tools and incentives to partners to build Voice Application Practices including lifecycle and professional services

� Network sales with Unified Communications

� Leverage VIP incentives, applications and professional servicesto drive partner growth and profitability


VIP 13 Objectives: Unified Communications

� Continue to accelerate building of Unified Communications Applications Practices, by provided increased incentives for applications

�Support partners in development of practices around the leading edge, advanced Unified Communications applications

�Simplify program structure by eliminating previous attach rate design

�Move to simply paying applications at a higher rate than non-applications—no attach rate threshold anymore

� Continue to reward VIP partners for basic Unified Communicationssales and for voice-enabled integrated infrastructure sales


From a $10B+ Market in IP Telephony …

5,000

0

10,000

Mark

et

Siz

e (

$M

)

25,000

FY’03 FY’04 FY’05 FY’06 FY’07 FY’08 FY’09 FY’10

30,000

35,000

20,000

15,000

Sources: Synergy, Gartner, Wainhouse, Datamonitor, Ovum, and Cisco

TDM PBX

IP PBX

40,000

Messaging

Contact Center

Conferencingand Collaboration

Enterprise FMC

Rich Media

Email/Calendaring

Enterprise IM

… to a $30B Market in Unified Communications


TDM �� IP • Accelerate Transition; Network Centricity

Fragmented �� Consolidated • Active Participation; Platform Approach

IT Driven �� Consumer Driven • Open Ecosystem; Policy; User Experience

Wired + Mobile • Multiple Devices; Embrace Interop

Premise + SaaS • Expand Offer; Enable Ecosystem

Video Becomes Core • User Experience; Increase Productivity

Key Considerations / GoalsMarket Trend

Market Trends and Transitions:Changing the Way People Work


VIP Unified Communications Program: Historical Evolution

+1%

+2%

21%

15%

X

X

X

VIP12

+1%

+2%

21%

15%

X

X

X

VIP11

+1%

+2%

21%

15%

X

X

X

VIP10

+1%

+1%

20%

17%

X

X

X

VIP9

+1%

+1%

20%

17%

X

X

X

VIP8

+1%Gold Cert. payout

+3%Master Spec. payout

+4-6%

16%

X

X

X

VIP7

+4-6%

16%

X

X

X

VIP6

--Apps payout

21%

16%

12%

2%Base payout

X

X

VIP5

XApplication Focus

XBuild IPC Practice

XPartner Profitability

VIP13


VIP 13 Payout Summary Unified Communications

3% product shipments


21%16%/12% product shipments

Unified Comm

N/AN/AProgram exit criteria

Master Specialized partners

N/AN/AProgram exit criteria

Gold Certified partners

Program exit criteria

Requirement

16%/12%/12% product

shipments

16%12%/12% product

shipments

Category

A/B/C

BE Reseller Unified Comm Express

� Simplified requirements - only three components:� Specialization: Must maintain valid Advanced Unified Communications

Specialization for the entire program� Sales volume: Minimum bookings: US$25,000 net bookings in qualifying Unified

Communications SKUs for specified dates. � Customer satisfaction: Average customer satisfaction score: 4.40 or higher on all



Benefits to Cisco and Partner of Unified Communications Applications Focus

� Increases the total size of the average deal

� Increases partner services dollars associated with the service-rich applications

� Improves the customer value associated with an Unified Communications purchase

� Accelerates the Unified Communications market adoption rate

� Provides funding to support partner’s investment in Voice Application Practices


Wireless LAN



Niche Players Visionaries

Challengers Leaders

Benefits to You:

• Safe choice

• Investment protection

• Experience and brand

• Track record of deployments

• Unmatched ability to execute

• Significant R&D commitment

• Agility (i.e. shipping 802.11n APs)

• Unrivaled partner enablement and service/support

Meru Networks

Nortel

HP

BluesocketAlcatel

Siemens

Vivato

Enterasys

Proxim

Completeness Of Vision

Symbol

2005200520052005

Aruba Networks

Ab

ilit

y T

o E

xecu

te

Trapeze Networks

Colubris

3Com

Extricom

Xirrus

2006 2007200720072007

Please View In Presentation Mode

Foundry

Extreme

Source: Gartner: Magic Quadrant 2005, 2006, 2007

Cisco— Consistent Leadership in Mobility


Evolving to the Mobile Business

Business in Motion

Expanded Business Ecosystem

Agile Business for Competitive

Advantage

Mobilizing Business Applications

Increasing User Mobility

Proliferationof Mobile Devices


Introducing Cisco Motion

Extend MobilityApplications Right

Device—Right Network

Selecting the Right Communications Media Right Time, Right Place

Delivering LoB/FunctionalLeader Requirements—

Open API

Unify Disparate Networks

Addressthe Client“Wave”

Facilitate Collaboration

OpenMobility

Applications

Securing and ManagingDevices CentralizedClient Provisioning


Mobility Services Networks

Applications Applications Applications Applications

Ethernet RFIDWi-Fi

Open API

Open Protocol

NMSP

Location

WIPS Handoff

Service “n”

Mobility Services Engine

Controller

WCS

SiSiSiSiSiSi

Apps Source Intelligence from

the MSE viaOpen API

Centralized Services and

Network Management

Open Protocols Unify Networks

Centralized Services


� Allows Transport and Applicationsto evolve independently

Abstraction layer with CAPWAP/NMSP

� Accelerate development and deployment of customized solutions

Eco-system of Application Partners

Introducing A Practical ApproachCentralized, Scalable Mobility Services

� Unified API enabling Enterprise 3.0 applications

Services and Applications Platform

� Ease of deployment and efficientallocation of CapEx

Common Framework for Multiple Services

3300 Series Mobility Services Engine


VIP 13 Payout Summary – Wireless LAN

N/AMeet program exit criteriaMaster Specialized partners


Meet program exit criteriaGold Certified partners

N/A

Meet program exit criteria

Requirement

8%/3%/12% product

shipments

Category A/B/C

N/A

Wireless LAN

Service Bonus payout

� Simplified requirements - only three components:� Specialization: Must maintain valid Advanced Wireless LAN Specialization or for

the entire program.� Sales volume: Minimum bookings: US$15,000 net bookings in qualifying Wireless

LAN SKUs for specified dates. � Customer satisfaction: Average customer satisfaction score: 4.40 or higher on all



Data Center



Summary of VIP13 Data Center Family Changes

Category A

Category B

Category A

VIP13

10%Category

FoundationMoves from Foundation 5% in VIP12 to Category A 10% in VIP13

Data CenterNexus 5K

5%Category

FoundationNo changeData Center

Foundation Data Center

No change

Change description

Data Center

VIP Technology

Category

10%Category Advanced

Advanced Data Center

VIP13 Payout Level

VIP12Product Family

� Data Center products have a 100% allocation and retain the same payout levels in VIP13 as in VIP12 (Cat “A” = 10%, Cat “B” = 5%).

� Nexus 5K family SKUs moved from 5% payout to 10% payout.

� Additional Nexus 1K and FCoE license SKU to be added when FCS during VIP 13.

� Advanced Data Center Networking Infrastructure Specialization required as entry criteria in VIP 13, instead of exit criteria in VIP 12.


VIP 13 Payout Summary – Data Center

N/AMeet program exit criteriaMaster Specialized partners


Meet program exit criteriaGold Certified partners

N/A

Meet program exit criteria

Requirement

10%/5%/12% product shipment

Category A/B/C

N/A

Data Center

Service Bonus payout

� Simplified requirements - only three components:� Specialization: Must maintain valid Advanced Data Center Network Infrastructure

2.0 Specialization or for the entire program.� Sales volume: Minimum bookings: US$150,000 net bookings in qualifying Data

Center SKUs for specified dates. � Customer satisfaction: Average customer satisfaction score: 4.40 or higher on all

surveys received for specified dates. Modified as appropriate by Theatre.


VIP 13 Program

Summary


Enrollment Criteria

Unified Communications pre-requisites

• Advanced Unified Communications Specialized at enrollment

• Maintain Specialization through the entire duration of the program

• Obtain Partner Access onLine (PAL) access for sending customer satisfaction surveys

Unified Communications Express pre-requisites

• Express Unified Communications Specialized at enrollment

• Maintain Specialization through the entire duration of the program


• Partners may only enroll in either Unified Communications or Unified Communications Express – partners may not enroll in both.

• Partners cannot change between Unified Communications and Unified Communications Express at anytime during the program period. However, partners may change at the start of the next VIP period.


Enrollment Criteria

Unified Communications Business Edition pre-requisites

• Business Edition Reseller at enrollment

• Maintain authorization for the remainder of the program


Unified Communications Business Edition and UC Express pre-requisites

• Express Unified Communications Specialization & Business Edition Reseller at enrollment

• Maintain authorization for the remainder of the program


Data Center pre-requisites

• DCNI 2.0 Specialization at enrollment

• Maintain Specialization for the remainder of the program



Enrollment Criteria

VPN/Security prerequisites

• Advanced Security Specialized at enrollment

• Must maintain specialization through the entire duration of the program

• Obtain Partner Access onLine (PAL) tool access for sending customer satisfaction surveys

Wireless LAN prerequisites

• Advanced Wireless LAN Specialization at enrollment

• Must maintain specialization through the entire duration of the program

• Obtain Partner Access onLine (PAL) tool access for sending customer satisfaction surveys


VIP 13 Timeline

� Program Period 13: January 25, 2009– July 25, 2009

� Re-enrollment Required: For VIP 12 Partners

� Enrollment Windows (for new and existing partners):

- February 7 – February 28, 2009 for Q3 & Q4

- April 27 – May 15, 2009 for Q4 only

� CSAT Survey Period:

- Start: January 25, 2009

- End: July 17, 2009

� Payout Dates:

- 1st check October/November 2009

- 2nd check December 2009/January 2010

Partners and CAMs should use the VIP Tool to track enrollment status only:http://www.cisco.com/go/viptool


VIP Tool� Online tool for CAMs and partners to manage enrollment/re-enrollment status

only URL: http://www.cisco.com/go/viptool

� Re-enrollment for VIP 12 partners

� All VIP 12 partners will need to re-enroll between February 7 - February 28, 2009

� Go to http://www.cisco.com/go/viptool

� Select your company profile that shows “Pending Re-Enrollment” Status

� You will be prompted with the following message: “Do you want to re-enroll in VIP for this program period?”

� Click “Yes”

� Click to Accept VIP Terms and Conditions

� Review and update application

� Check box to Accept VIP 13 Program terms and conditions

� Submit application


VIP Tool: Re-enrollment

Partners with status “Re-enrollment required” must enroll by February 28th

Partners that do not re-enroll will be rejected from VIP 13

• Select profile• Click “Yes” to re-enroll• Click to Accept Ts & Cs• Validate partner read and understands program rules

• Submit application

ABC


Partner Program View


Partner Program View Tool Benefits

� Partner Program View is a reporting tool that provides daily visibility to your progress-to-date in the current Value Incentive Program

� VIP eligible bookings details are transitioning from the VIP Tool to the Partner Program View

� Partner Program View benefits:

– Daily updates throughout the program period

– Visibility to SKU level bookings details for eligible and ineligible orders

– Ability to download SKU level bookings details

– Visibility to Reseller to Distributor PO

– Expanded access to data for two previous VIP periods


Eligible & Ineligible Bookings are accessed by selecting these tabs

Partner Program View – Bookings Summary


Partner Program View Navigation

Select the program from the drop down list

Select a technology from the drop down list

Press Go to update your view


Bookings Summary Page Expanded Features

CSAT Information and report replaces the CSAT information referenced in the VIP Tool – One stop.

Link directly to VIP eligible SKU’s

Search the Booking Detail Results list for a specific Order or PO Number

Booking detail results provides visibility to all transactions for the period


Eligible Bookings ReportExpanded to include:Transaction date, PO Number, payout %, Shipment Date, End Customer Parent Name


Access to Partner Program View

� Expanded to multiple users at a partner company

� Managed through Partner Self Service (PSS)

www.cisco.com/go/pss

Manage My Access

Access to PPV is administrated via Partner Self Service replacing the VIP Tool usage.


VIP 13 Program

Customer Satisfaction


Customer SatisfactionSchedule VIP13 Survey Contacts NOW!!!

Key Dates for VIP13 Survey Sending in PAL

JAN FEB MAR APR MAY JUN

January 25, 2009 9am PT

Begin sending surveys to qualified VIP13 contacts

In PAL, all contacts sent surveys in Cisco’s FY’08 survey year are available to reserve for FY’09.

Go to PAL > Send Surveys > Scroll to bottom of screen > Select the “No Surveys Scheduled/Sent” filter

July 17, 2009

Survey Deadline

All survey responses MUST be received by 5:00

PM (pacific time) No Exceptions!

JUL


Customer SatisfactionQualifications for GSAT valid survey

Survey Customization Questions (first section of the survey)

Respondent can customize their survey experience and reduce their survey take time

Critical that the respondent answer YES to the one or both of the following survey customization questions found within the 1st section of the survey:

�Do you obtain Cisco network products or solutions from a Cisco Pre-Sales Channel Partner, Value Added Reseller or Vendor? Yes/No

�Do you obtain Cisco network service or support from a Cisco Post-Sales Channel Partner, Value Added Reseller or Vendor? Yes/No

If they answer NO, they will never be presented with the partner related questions and the response will be bucketed into the PAL "no partner identified" classification.

The respondent can answer “No” or Don’t Know” for the majority of the additional Survey Customization Questions to expedite their survey take time.


Customer SatisfactionQualifications for GSAT valid survey

Cisco Channel Partner Section

The name of the Channel Partner that sent you this survey invitation has been inserted above for your convenience. Do you wish to evaluate this partner? Yes/No

Technology Question

Respondent confirms the respective technology (ies) they received from the partner (the partner selects the provided technologies when requesting the survey send within PAL)

Pre-Sales Overall Question

Overall, how would you rate your satisfaction with the Pre-Sales Support provided by the above Cisco Channel Partner? Would you say you are…

Post-Sales Overall Question

Overall, how would you rate your satisfaction with the Post-Sales Support (repair, maintenance, and technical support) provided by the above Cisco Channel Partner? Would you say you are..

Response must be received by 5PM PST on July 17th, 2009


Customer SatisfactionSampling of Program Rules

� CSAT is an integral part of channel programs such as VIP.

� Within a Cisco fiscal year, channel partners may send one survey invitation to any unique customer contact, identified at the individual person level. Channel partners may not use personal email domains and/or email aliases to send survey invites to thecustomer contact, identified at the individual person level.

� Channel partners may not send survey invitations to their own email domain, with the exception of those partners who are on anApproved Outsourcers List* (*Maintained by Certification team. Partner must meet eligibility criteria as set forth by Certification in order to be on the list)

� Once a survey invitation has been scheduled, channel partner may not cancel the survey invitation.


VIP Period 13 Support

� Open a case on partner help online: www.ciscopartnerhelp.com

� Select category “Programs” and subcategory “Value Incentive Program”when submitting your case.

� VIP URLs:

� VIP home page: http://www.cisco.com/web/AP/partners/partner_popup.html

� VIP Tool: www.cisco.com/go/viptool

� PAL Tool: www.cisco.com/go/pal

� PPV Tool: https://apps.cisco.com/mbrre/saw.dll?Dashboard


VIP 13 Period Partner Call to Action

� Be certain to enroll in VIP 13.

� Work with your CAM to fully leverage training and enablement tools available from Cisco.

� Make application attach rate and security mix part of your daily sales practice.

� Celebrate success together

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