© 2008 Cisco Systems, Inc. All rights reserved.Cisco ConfidentialC Cisco Channel Partner Value Incentive Program: FY2009 Program Evolution Update January 2008

© 2008 Cisco Systems, Inc. All rights reserved.Cisco ConfidentialC 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

© 2008 Cisco Systems, Inc. All rights reserved.Cisco ConfidentialC 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

© 2008 Cisco Systems, Inc. All rights reserved.Cisco ConfidentialC In Line with the Cisco Channel Partner Program Evolution, VIP Is Evolving and Increasing Benefits for Partners that Sell Advanced Solutions within an Eligible Technology VIP Program Evolution Ciscos 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

© 2008 Cisco Systems, Inc. All rights reserved.Cisco ConfidentialC Focusing Incentives Precisely on the Advanced Technology Aspects of a Sale through Allocations VIP Evolution and the Cisco Allocated Model 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 model to ensure system stability and tool automation for our partner community Beginning in VIP13, VIP is adopting Ciscos allocated model, placing more focus on advanced technologies

© 2008 Cisco Systems, Inc. All rights reserved.Cisco ConfidentialC SKU List The allocation model affects AT enabled routers not stand-alone appliances. This accounts for less 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

© 2008 Cisco Systems, Inc. All rights reserved.Cisco ConfidentialC Technology Allocations What Is an Unallocated Part? Example of an Unallocated Part: Part Number XYZ: $100has both unified communications and security technologies The entire $100 is associated to only one technology, unified communications or security Associating Bookings Revenue in a Multi-Technology Part to One Specific Technology 7

© 2008 Cisco Systems, Inc. All rights reserved.Cisco ConfidentialC Associating Bookings Revenue in a Multi-Technology Part to Multiple Technologies (Commonly Bundles) 8 Technology Allocations What Is an Allocated Part? Example of Bookings Allocation: Part Number XYZ: $100has 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 equal 100 percent If 70% is allocated to unified communications and 30% to security, then $70 bookings is for unified communications and $30 is for security

© 2008 Cisco Systems, Inc. All rights reserved.Cisco ConfidentialC Effects on Partners Allocated 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

© 2008 Cisco Systems, Inc. All rights reserved.Cisco ConfidentialC Unallocated Structure in VIP12 Product ID Advanced Technology Allocation Percent Payout Rate Total Book Net Allocated Book Net Allocated Book Net Payment C2801-VSEC- CCME/K9 Unified Commun- ications 100% Foundation 15% $1, $ CISCO1841- HSEC/K9 Security100% Foundation 6% $2, $ Total$ Advanced Technology Allocated Input Set by Product Family Total Book Net x Allocation Percent Allocated Book Net x Payout Rate From Global Price List Set by product family

© 2008 Cisco Systems, Inc. All rights reserved.Cisco ConfidentialC Payout Categories Described VIP12 Foundation Advanced VIP 13 Category A Category B Category C

© 2008 Cisco Systems, Inc. All rights reserved.Cisco ConfidentialC Payout Rates Unified Communica -tions Unified Communica -tions Express SecurityWireless Category A21%16%14%8% Category B16%12%6%3% Category C12%

© 2008 Cisco Systems, Inc. All rights reserved.Cisco ConfidentialC Allocated Structure in VIP13 Product ID Advanced Technology Allocation Percent Payout Rate Total Book Net Allocated Book Net Allocated Book Net Payment C2801-VSEC- CCME/K9 Security40% Payout Category C 12% $1, $518.00$62.16 Unified Communi- cations 50% Payout Category C 12% $647.50$77.70 CISCO1841- HSEC/ISR-K9 Security70% Payout Category C 12% $2, $2,096.00$ Unified Communi- cations 30% Payout Category C 12% $898.50$ Total$ Advanced Technology Allocated Input Set by Product Family From Global Price List Total Book Net x Allocation Percent Allocated Book Net x Payout Rate Set by product family

© 2008 Cisco Systems, Inc. All rights reserved.Cisco ConfidentialC 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

© 2008 Cisco Systems, Inc. All rights reserved.Cisco ConfidentialC 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

© 2008 Cisco Systems, Inc. All rights reserved.Cisco ConfidentialC Next Steps Continue to accelerate advanced technology sales Enroll in VIP13

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© 2008 Cisco Systems, Inc. All rights reserved.Cisco ConfidentialC