Cisco Slapped With $6M Jury AwardCisco Slapped With $6M Jury Award
What happens when you think you can abandon one of your resellers who's potentially landing a big deal?
October 28, 2008
What happens when you think you can abandon one of your resellers who's potentially landing a big deal?
What happens when you think you can abandon one of your resellers who's potentially landing a big deal?Cisco isn't immune to remedies and relief sought by their partners, and let this be a warning to others that they aren't either. One of the worst things to do to a channel is to violate your partner's trust, as Infra-Comm of the San Juan Capistrano, CA alleged was done by Cisco; Infra-Comm sued and was awarded $6,381,446 by the jury. The presiding judge found three areas of Cisco's Indirect Channel Partner Agreement (ICPA) unconscionable.
One of the worst things to do is to take a deal your partner has registered and is working. Now for the purists that think this doesn't happen, think again. Infra-Comm has the resources to challenge Cisco while many partners of Cisco or other firms simply do not.
This ruling potentially challenges other existing channel partner agreements and how companies such as Cisco can treat their partners. Still, a hurdle for many partners will be that they lack resources to challenge the company, and the possibility that their revenues are tightly dependent upon a single source partner. Then too, lawyers will rewrite agreements for Cisco and other companies in attempts to avoid repeating this $6M+ mistake.
The significance of this extends beyond how you treat your partners, into an area that I still believe is a trend in delivery of IPT solutions. I've mentioned in Staging Services Eases IP Migrations that more qualified hands need to touch the customer sites and that staging services are the kind of process improvement to get VoIP sales rolling.
Cisco wants to move boxes and phones along with licenses, just like any other player. Knowing all the details of the customer, their site(s), needs, nuances and other relevant information isn't real likely without the partner's involvement. Factory dependence vs. dealer/VAR/consultant dependence carries different burdens, risks as well as rewards for the customer. Sadly, I think this lawsuit reveals a mindset that the factory wants control of the deals too. But IPT is a services game that requires qualified hands in many areas, and by its nature, telephony in business isn't a model that you can squeeze at will for your sole benefit. At least not in this case.
