Channelnomics

Cisco Partner Dust-up Leaves Some Customers in Lurch

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UK solution provider Phoenix IT Group has reached a deal with CAE Technology Services Ltd. that will see it hand over at least some of its Cisco Systems Inc. customers to the VAR following its ejection from the vendor’s partner program, CRN understands.

As exclusively revealed by CRN UK, Phoenix, based in Northampton, England, was dramatically stripped of its Cisco Gold partner status in October amid whispers that it had breached the vendor’s terms and conditions.

Phoenix wrote to its customers on 15 November to inform them it had been engaging with Cisco and other Gold partners to “agree an ongoing service model that ensures our customers receive seamless high-quality support” beyond today, when its contract was formally terminated.

It was thought BT was in line to scoop the business, but following a backlash from reseller customers who looked upon BT as a competitor, Phoenix is understood to have instead opted to spread the business between multiple suppliers.

According to several sources close to the situation, Watford, U.K.-based Cisco Gold partner CAE is the first provider with which Phoenix has reached a formal agreement, although a similar alliance with channel services provider Networks First could also be in the pipeline. Some customers were informed of the CAE agreement at the end of last week.

However, the deal is not straightforward, according to insiders, with CAE said to be merely taking a handling fee and subcontracting the work back to Phoenix.

This arrangement could allow Phoenix to effectively retain its Cisco business and potentially re-apply for Gold status 12 or 18 months down the line when the dust settles, one onlooker argued.

However, just like with the BT deal that was mooted, some reseller customers using Phoenix as a third-party supplier of break-fix services are less than thrilled with the prospect of working with a competitor such as CAE.

“We have been approached by many customers who are not happy with whole thing,” said Peter Titmus, chairman of Networks First, a Cisco Gold partner which works through the channel rather than direct with the end user.

Richard Eglon, marketing director at channel services provider Comms-care, stressed that affected customers are under no obligation to move to a provider of Phoenix’s choosing.

“Moving to a non-channel-only outfit may cause conflict,” he said.

Phoenix told customers that it understands Cisco will provide free TAC access to them until  Jan. 24, 2014.

CAE had not responded to our calls at the time of writing, while a representative for Phoenix said the firm had no comment to make.

For more UK channel coverage from CRN, visit www.channelweb.co.uk.

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