Cisco Channel Partner Value Incentive Program: FY2009 Program Evolution Update

1. Cisco Channel Partner Value Incentive Program:FY2009 Program Evolution Update January 2008

2. Cisco Channel Program Evolution • The Network has become the platform for integrating multiple advanced technology solutions. • The Cisco® Channel Partner Program is evolving its business view and program model to one that is consistent with this Network centric model • The Value Incentive Program will be part of this evolution, facilitating a consistent view across channels

3. The Cisco Value Incentive Program • The Cisco Value Incentive Program (VIP) for Advanced Technologies is a comprehensive incentive program designed to increase margins for Cisco channel partners that resell solutions for: • Cisco Unified Communications • Security • Wireless • Data Center • The Value Incentive Program continues to focus on advanced technology sales

4. VIP Program Evolution In Line with the Cisco Channel Partner Program Evolution, VIP Is Evolving and Increasing Benefits for Partners thatSell Advanced Solutionswithin an Eligible Technology • Cisco’s channel model supports the development of a partners’ practice to include lifecycle services (e.g., service) • Technology evolution now makes it capable to deliver Integrated products, such as the Cisco ISR (Integrated Service Router), which are capable of delivering multiple technology solutions in a single platform • Partners that sell integrated technology products will earn incentives across the technologies for which they are specialized and enrolled in VIP

5. VIP Evolution and the Cisco Allocated Model Focusing Incentives Precisely on the Advanced Technology Aspects of a Sale through Allocations • Prior to August 2007, Cisco allocated part numbers 100 percent to a specific technology across all business models • In August 2007, Cisco introduced an allocation model which apportions the value of integrated products to their respective technology category • Cisco waited one and a half years to migrate VIP to the allocated modelto ensure system stability and tool automation for our partner community • Beginning in VIP13, VIP is adopting Cisco’s allocated model, placing more focus on advanced technologies

6. SKU List • The allocation model affects AT enabled routers not stand-alone appliances. This accounts forless than 5% of the total SKUs. • - UC 1%, Security 16%, Wireless 1% • The majority of the UC SKUs impacted by allocations are in the foundation category, which further emphasizes a focus on the advanced technology sales

7. Technology AllocationsWhat Is an Unallocated Part? Associating Bookings Revenue in a Multi-Technology Part to One Specific Technology Example of an Unallocated Part: • Part Number XYZ: $100—has both unified communications and security technologies • The entire $100 is associated to only one technology, unified communications or security 7

8. Technology AllocationsWhat Is an Allocated Part? Associating Bookings Revenue in a Multi-Technology Part to Multiple Technologies (Commonly Bundles) Example of Bookings Allocation: • Part Number XYZ: $100—has both unified communications and security technologies • A percentage of the $100 is allocated each to unified communications and security • The net percentage allocation to technologies must equal100 percent • If 70% is allocated to unified communications and 30% to security, then$70 bookings is for unified communications and $30 is for security 8

9. Effects on PartnersAllocated Model • Partners have the opportunity to continue to earn a similar level of incentive payments • Incentive payout percentages are currently in a final review process and may change from current rates • Partner reporting applications will be updated to allow partners to seamlessly manage this transition • The three technologies below will be transitioned: • Unified communications • Security • Wireless 9

10. Advanced Technology Allocated Input Total Book Net xAllocationPercent AllocatedBook Net xPayoutRate Set by product family FromGlobalPrice List Unallocated Structure in VIP12 Set byProductFamily

11. Payout Categories Described VIP12 • Foundation • Advanced VIP 13 • Category A • Category B • Category C

12. Payout Rates

13. Set by product family Advanced Technology Allocated Input Total Book Net xAllocationPercent AllocatedBook Net xPayoutRate FromGlobalPrice List Allocated Structure in VIP13 Set byProductFamily

14. Partner Program View • Partner Program View provides daily visibility to your progress to date in the current Value Incentive Program • Partner Program View will provide visibility to bookings based on the allocated model, beginning with the VIP13 program, w.e.f. on March 2009

15. Partner Program View • Bookings in VIP13 will be allocated bookings • Incentive payments are based on allocated shipments • New columns will break out allocation information and display the three Technology Category A, B, C • If a part number is split across multiple VIP technologies, allocations to technologies for which you are Not enrolled display in the Ineligible Bookings Report

16. Next Steps • Continue to accelerate advanced technology sales • Enroll in VIP13

17. For More Information • http://www.cisco.com/web/AP/partners/partner_popup.html