Cisco Enterprise Agreement: Key to Cisco’s Evolving Software Business Strategy

With today’s announcement of the Cisco Enterprise Agreement (EA) we’re changing the way our customers purchase, deploy and adopt Cisco technology. This is another big step forward as we continue to evolve our software business strategy to make it simpler, easier and more rewarding for customers take advantage of Cisco software as they undergo the transformation to digital business.

The Cisco EA is a single, simple agreement that lets our customers easily consume the products and services they need today, in areas like collaboration, infrastructure and security, and to scale and add additional capabilities as they grow – simply and without penalty. The Cisco EA simplifies access to the latest Cisco products and services, and gives customers the ability to deploy and use products and services on their budget and schedule.

We’re always looking at ways to make it easier for customers to get the most value out of their Cisco software today and as they grow. Two years ago, we introduced Cisco ONE Software, a simple, flexible, more valuable way for customers to consume infrastructure software delivered through suites. Since then, more than 18,000 customers – including 98 of the Fortune 100 – have realized the benefits of Cisco ONE. 39% of Cisco ONE customers have already adopted new capabilities included in the suites, with another 50% planning to use new capabilities over time.

Cisco EA stacks up well against any enterprise agreement out there. But we didn’t introduce Cisco EA to be like everyone else. We’ve added important differentiators. We’ve built in a growth allowance, so customers can exceed their agreed upon entitlement amount up to 20 percent without additional cost. No one else does that.

Our True Forward feature is a game changer. Most vendors offer what they call “true up,” a periodic review of a customer’s software usage. If the customer is using more than the original entitlement, the vendor then bills the customer retroactively for the over-usage. That’s basically a penalty for success! We never back bill under True Forward. Cisco EA is designed to encourage our customers to grow not to penalize them. We want to see customers grow and win with us.

You’ve heard people say Cisco is becoming a software company, but that’s not accurate. We’ve always been a great hardware company. And software has always been a big part of our business. The Cisco EA is aligned with our strategy as we transform to become an increasingly software-centric company, transforming the way we make our software available to our customers. This puts us in a unique position as we leverage our leadership in both hardware and software, and in the capabilities only we can offer as both work together to deliver customer value.

I joined Cisco last year after 24 years at Microsoft, because I took a careful look at Cisco and saw tremendous opportunity. Cisco has an incredible portfolio, fantastic customer base and unparalleled experience and reputation in building the network, and a leader in collaboration and security. So now I’m excited to be part of our next stage as we emerge uniquely positioned as a global leader in both hardware and software.

We’re listening carefully to customers. At Cisco, we sometimes call this time of year “AB season,” because we do a series of targeted customer advisory boards. Along with dozens of other Cisco executives, I’ve been meeting with senior executives from our top customer and partner companies, learning about their businesses and what they need in an enterprise agreement. We’ve always known that customers want the most value for their IT investments and these meetings only confirmed that. We’re in the software business. We want to sell software. And we understand that the only way to do that is to create an environment in which customers can easily realize business value from their Cisco software purchases.

Cisco will continue to lead in the hardware business and software. I have no doubt about that. And Cisco EA will be a big part of it. I urge you to take a look at it.

Learn more here: http://www.cisco.com/go/ea

Watch my conversation on Cisco Enterprise Agreement, with Zeus Kerravala, Principal Analyst with ZK Research