Cisco Sees Huge Market Opportunity in Partner Managed Services

Cisco is putting renewed emphasis on helping its partners deliver its managed services. The company sees partner-delivered managed services as its fastest growing route-to-market (RTM) opportunity, and has doubled down on delivery efforts.

According to Oliver Tuszik, Cisco's global channel chief, managed services have become one of the most profitable lines of business for the company. He added that managed services sales growth now outpaces overall revenue growth delivered by Cisco's partners. The company disclosed in its most recent quarterly earnings that overall bookings from partners grew 27 percent year-over-year, while revenue from partner-managed services grew by 31 percent. Tuszik added that among SMBs, partner-managed services grew 32 percent.

“Where a lot of companies said managed services is nothing for smaller customers and our smaller partners, the opposite is happening and we’re heavily investing in the segment,” said Tuszik.

Research commissioned by Cisco reveals that managed services represent a 45-percent RTM opportunity and that the total addressable market for them will reach $113 billion by 2025.

“That is tremendous,” said Alexandra Zagury, VP of managed services and as-a-service sales at Cisco. “When you look at this route-to-market opportunity, it’s also very key to the shift to as-a-service, because the best way to deliver an outcome right now is through a managed service. But as soon as you start adding the consumption model, as soon as you start adding the cloud-like delivery experience, you’re suddenly delivering a managed service as a service.”

Zagury said Cisco has more than 400 new provider partners and that the company's platform, which has a multitenant architecture at its foundation, enables its managed services. Cisco also boasts more than 100 new service creation co-sell projects in different regions, and has developed a minimal viable partner requirements (MVPR) framework in support of its growing MSP network.

“This is all about making sure that it’s multitenant in nature, that we have the standard APIs [and] that we have the ability to export data into partner data lakes,” said Zagury. “We were going through our whole portfolio and really looking at the big outcomes that we can deliver and then matching them against whether they’re managed, ready or not. And of course, we already do this today, and our partners have already built great outcomes based on Cisco.”