Cisco: Dealing with the vendor behind the VARs

Tips for making your relationship work even better

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If you've ever tallied your company's spend on Cisco products and compared it against what you spend with other telecom and IT suppliers, in most cases, it's as large or even larger. Yet this fact often sits below the radar in most shops because the vast majority of companies do not have a contractual arrangement directly with Cisco, and instead purchase the vendor's products and services through one or more value added resellers (VARs).

In such VAR arrangements, it can be tough to see past the smoke and mirrors that Cisco puts up to actually see the vendor that you are really negotiating with. Ultimately, Cisco sets the pricing that you receive via the VAR (or VARs), but Cisco works very hard to hide behind the VAR to avoid direct negotiations with you. For instance, my networking-oriented consulting firm has been in negotiations with Cisco where it will claim that it cannot tell our customer the actual discounts it offers VARs for the customer's purchases because that would "break its confidentiality obligations with the VARs."

So, which best practices should large companies use to successfully manage Cisco?

The first step is to work hard on your commercial relationship with the company. Even if you do not end up discussing specific discounts and pricing, it is still crucial to manage your relationship with Cisco just as you would with any other major vendor. This includes periodic business/account reviews where the entire relationship (and spend) is appraised, and carrots and sticks are applied to extract optimal pricing and discounts.

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