1 Cisco Public © 2006 Cisco Systems, Inc. All rights reserved. CBSW 2006 CISCO SERVICES DELIVER RECURRING REVENUE STREAMS © 2006 Cisco Systems, Inc. All rights reserved. CBSW 2006 Cisco Public Cisco Business Solutions Workshop Series 2006

2 © 2006 Cisco Systems, Inc. All rights reserved. Session Number Presentation_ID Cisco Public Cisco Services. Making networks work. Better together. Cisco Services. Making networks work. Better together.

3 Cisco Public © 2006 Cisco Systems, Inc. All rights reserved. CBSW 2006 Workshop Agenda What is the impact of a services practice on my business? What are the how-to’s of building a services practice? What is Cisco doing to support you?

4 Cisco Public © 2006 Cisco Systems, Inc. All rights reserved. CBSW 2006 Driving Partner Success through Cisco-Services Framework Minimum set of services needed to successfully implement and support a technology solution Within services framework Partner provides core expertise Cisco provides operational expertise Partners can drive significant margin with Cisco-supported services! Prepare Plan Optimize Operate Design Implement Plan Prepare Design Implement Optimize Operate Security Readiness Assessment Vulnerability Assessment Security Implementation Plan Development Security Operations Leading Practice Dev Detailed Design Development High Level Design Technology Strategy Deployment Project Management Security Implementation Training Security Improvement Security Assessment Security Incident Response Change Management Security Troubleshooting and Support (SA & PSA) Configuration Management Moves, Adds, and Changes Software Support Hardware Support Signature File Update Security Administration Security Intelligence Security Advisor Partner Brand & Delivered Cisco Enabled Cisco Brand & Delivered Services We’re Better Together!

5 Cisco Public © 2006 Cisco Systems, Inc. All rights reserved. CBSW 2006 Building a Services Practice Plan Prepare Design Implement Optimize Operate

6 Cisco Public © 2006 Cisco Systems, Inc. All rights reserved. CBSW 2006 Why Build a Services Practice? Strengthen your business finances Retain and satisfy your customers Services are a high-margin, annuity business that will keep your business profitable Customers that purchase services are highly satisfied customers Satisfied customers are loyal customers who will continue to buy!

7 Cisco Public © 2006 Cisco Systems, Inc. All rights reserved. CBSW 2006 Best-in-Class vs. Typical Services Practice Hardware Sales Cisco Services Services GM Value of Services Annuity Attach Rate Renewal Rate 3-Year Contract $800 $69 $10 19% $31 40% 30% 0% Typical 1000’s $ Typical 1000’s $ Return on Working Capital

8 Cisco Public © 2006 Cisco Systems, Inc. All rights reserved. CBSW 2006 Best-in-Class vs. Typical Services Practice Hardware Sales Cisco Services Services GM Return on Working Capital Value of Services Annuity Attach Rate Renewal Rate 3-Year Contract $800 $495 $74 48% 85% 80% 33% Best in Class 1000’s $ Best in Class 1000’s $ $222 $800 $69 $10 19% $31 40% 30% 0% Typical 1000’s $ Typical 1000’s $ Would you want to know how to build an annuity business seven times the average Partner?

9 Cisco Public © 2006 Cisco Systems, Inc. All rights reserved. CBSW 2006 Best-in-Class Practices for Selling Services Plan Prepare Design Implement Optimize Operate

10 Cisco Public © 2006 Cisco Systems, Inc. All rights reserved. CBSW 2006 ARM Yourself to Sell More Services A – Attach services at point of sale R – Renew service contracts M – Execute Multiyear contracts

11 Cisco Public © 2006 Cisco Systems, Inc. All rights reserved. CBSW 2006 ARM Yourself to Sell More Services A – Attach services at point of sale R – Renew service contracts M – Execute Multiyear contracts

12 Cisco Public © 2006 Cisco Systems, Inc. All rights reserved. CBSW 2006 ARM Yourself to Sell More Services A – Attach services at point of sale R – Renew service contracts M – Execute Multiyear contracts

13 Cisco Public © 2006 Cisco Systems, Inc. All rights reserved. CBSW 2006 ARM Yourself to Sell More Services A – Attach services at point of sale R – Renew service contracts M – Execute Multiyear contracts

14 Cisco Public © 2006 Cisco Systems, Inc. All rights reserved. CBSW 2006 ARM Yourself to Sell More Services A – Attach services at point of sale R – Renew service contracts M – Execute Multiyear contracts

15 Cisco Public © 2006 Cisco Systems, Inc. All rights reserved. CBSW 2006 Top 5 Attach Rate Best Practices Require executive signoff on all orders without service Quote Services on every deal Regularly review Services contracts Add sales commission accelerators - pay on margins Bring in your Cisco sales representative Require executive signoff on all orders without service Quote Services on every deal Regularly review Services contracts Add sales commission accelerators - pay on margins Bring in your Cisco sales representative A – Attach services at point of sale R – Renew service contracts M – Execute Multiyear contracts

16 Cisco Public © 2006 Cisco Systems, Inc. All rights reserved. CBSW 2006 Hire a renewal sales specialist Create a 120-day renewal process Compensate managers & sales team Hire a “service contract” specialist Create a customer contract and asset database Hire a renewal sales specialist Create a 120-day renewal process Compensate managers & sales team Hire a “service contract” specialist Create a customer contract and asset database Top 5 Renewal Best Practices A – Attach services at point of sale R – Renew service contracts M – Execute Multiyear contracts

17 Cisco Public © 2006 Cisco Systems, Inc. All rights reserved. CBSW 2006 Fully compensate both sales team & managers Train on financial selling Regularly review multiyear metrics Bring in your Cisco sales representative Take advantage of Cisco Capital financing Fully compensate both sales team & managers Train on financial selling Regularly review multiyear metrics Bring in your Cisco sales representative Take advantage of Cisco Capital financing Top 5 Multiyear Best Practices A – Attach services at point of sale R – Renew service contracts M – Execute Multiyear contracts

18 Cisco Public © 2006 Cisco Systems, Inc. All rights reserved. CBSW 2006 Cisco Support Services Plan Prepare Design Implement Optimize Operate

19 Cisco Public © 2006 Cisco Systems, Inc. All rights reserved. CBSW 2006 Cisco Technical Support Services: A Complete Offering Cisco SMARTnet™ and SMARTnet Onsite Software Maintenance, Advanced Replacement, Technical Support Cisco SMB Support Assistant Provide broad-based technical support to organizations of up to 250 employees Cisco Software Application Support (SAS) plus Upgrades (SASU) Keep your customers’ software applications current Choose minor or major release upgrade support

20 Cisco Public © 2006 Cisco Systems, Inc. All rights reserved. CBSW 2006 Cisco Partner Programs Plan Prepare Design Implement Optimize Operate

21 Cisco Public © 2006 Cisco Systems, Inc. All rights reserved. CBSW 2006 Programs Designed for Your Service— Practice Building! ARM Incentive Program Drive Attach, Renewal & Multiyear (ARM) services sales Partner sales reps earn grand-prize sweepstake entries through online quizzes Pay For Performance Rebates for renewal-rate and attach-rate management Advance Technology Services Programs Opportunity Incentive Program

22 Cisco Public © 2006 Cisco Systems, Inc. All rights reserved. CBSW 2006 Financing and Leasing Solutions Financing is one of the most important tools you have to manage a customer's budget concerns and promote multiyear contracts Faster Deployment Improved cash flow Budget management

23 Cisco Public © 2006 Cisco Systems, Inc. All rights reserved. CBSW 2006 Conclusions Walk-aways Financial impact Best practices Train Sales force Programs

24 Cisco Public © 2006 Cisco Systems, Inc. All rights reserved. CBSW 2006 Q&A Thank you! Plan Prepare Design Implement Optimize Operate

25 Cisco Public © 2006 Cisco Systems, Inc. All rights reserved. CBSW 2006