Cisco's portfolio is growing — and its offerings are getting harder for its reseller partners to manage.
As Cisco pushes into new markets beyond its core networking business, the increasing complexity of the $230 billion enterprise-tech giant's offerings mean that its partners have to absorb the overhead costs of handling a growing portfolio — new offerings simply require more manpower, technical expertise, and valuable time to manage.
Now, the company is now taking steps to try to prevent that complexity from crushing partners' profits.
"If it's so complex to implement and run a product, to manage all the programs, the configuration, then it will kill our partners' profitability," Oliver Tuszik, Cisco's global head of partner sales, said in an interview with Insider. "They pay for their salespeople on margin profits, not on bookings."
Cisco relies heavily on partner resellers to drive revenue — roughly 90% of the company's bookings are made through its partners, which range from massive firms like IBM and Amazon Web Services to smaller businesses around the globe.
Those partners are now handling a wider range of Cisco products than ever before as the company rolls out new offerings in sectors like security, cloud, and collaboration. At the same time, customers are demanding a wider range of products in existing businesses like networking amid the rise of remote work.
Partners have echoed that concern. One of Cisco's biggest partners, World Wide Technology, sells $6 billion worth of Cisco products a year. WWT exec Brian Ortbals told Insider that the growing complexity of the portfolio makes for "a hard balancing act."