When I look at Cisco’s history, I’m incredibly proud of what we’ve built – a world-class hardware portfolio that’s been the foundation of our shared success. Over the last five years, our business has evolved significantly. As our recent earnings show, subscription revenue now represents 56% of Cisco’s total revenue. Our business model has transformed from primarily transactional to increasingly subscription-based, with software revenue growing 33% and software subscription revenue up 39%. This fundamental shift reflects how our customers prefer to consume technology and the changing nature of value creation in our industry.
These changes reflect Cisco’s ongoing innovation, not just in business model but also in products and services that meet the needs of customer challenges. In recognition of this, it’s time for our partner programs to proactively align with this evolution, positioning Cisco’s ecosystem to lead rather than respond to market changes.
The Path Forward
The market is shifting towards outcome-focused technology consumption. As we’ve worked with you on our broader Cisco 360 Partner Program evolution, we’ve been impressed by how many of you have already begun this journey – building integration practices, developing software capabilities, and creating services that deliver exceptional customer experiences.
Our opportunity now at Cisco is to properly and adequately reward you for driving customer outcomes. We now have the opportunity to evolve our partnership approach together, creating a program that supports not just where the business is today, but where it’s headed tomorrow.
Managing the Customer Lifecycle While Staying Committed to Partner Profitability
I want to be crystal clear about something – our program and incentive evolutions is not about reducing what we invest in our partnerships. What’s changing is how we direct those investments to reflect the complete customer journey. In fact, our commitment remains consistent while providing even more opportunities and accelerators to increase profitability. It’s about adding value where customers need it most and rewarding partners who deliver across the entire lifecycle.
This puts us in a position to supercharge our customer reach. Instead of growing one customer at a time, we’ll tap into entirely new markets and segments through our complementary strengths. By integrating our solutions into broader customer journeys, we’ll create stickier relationships – becoming an essential part of our customers’ daily operations. Through this evolved partnership approach, we’ll gain deeper customer insights that drive innovation – seeing not just what customers do with our solutions, but how they fit into their complete technology stack.
A Thoughtful, Phased Approach
I understand these changes directly impact your business operations and profitability. That’s why we’re taking a measured, two-phase approach that provides stability while allowing time to adapt:
Starting July 27, 2025:
- Through the Value Incentive Program and Lifecycle Incentives, you’ll have increased opportunities to earn more on strategic offers and adoption-based incentives
- The Customer Assessment Incentive will offer more earnings for high-quality assessments
- We’ll adjust the Cisco Services Partner Program payouts and retire the Monthly Value Rebate for Cisco Success Tracks
In February 2026:
- We’ll introduce the Cisco Partner Incentive, rewarding you across the entire LAER journey
- This will replace multiple siloed programs, making it easier to understand, predict, and maximize your earnings
- The annuity payout on software and services and the Delivery Rebate will be retired as part of this transition
To support you in this journey, we’re providing:
- New booking dashboards in Partner Experience Platform (PXP) for performance visibility
- A profitability estimator tool (available in May) to model potential earnings
- Comprehensive training on maximizing opportunities
- Regular, transparent communication
I encourage you to contact your Partner Account Manager to discuss how these changes complement your specific business strategy. My team and I are committed to ensuring this transition creates new opportunities for growth
When we evolve together, we win together. The strength of Cisco has always been our partner ecosystem. I’m confident that by embracing this next chapter of our partnership, we’ll create an even stronger ecosystem that delivers exceptional customer experiences while building sustainable growth for all of us.
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