Negotiating with Cisco: A CIO’s Playbook
Introduction: Negotiating with Cisco can be a complex chess game. Cisco’s vast product lines (from networking to security to collaboration) and intricate licensing models give it plenty of levers to maximize its revenue.
CIOs and IT procurement leaders must come equally prepared with knowledge of Cisco’s pricing structure, hidden pitfalls, and negotiation tactics.
This playbook provides a blunt, actionable guide to taking control of Cisco negotiations – across all product lines and licensing models – to achieve the best value and flexibility for your organization.
Cisco’s Licensing Structure and Cost Drivers
Cisco has transitioned from pure hardware sales to a software-centric, subscription-driven model.
It structures its licensing around major portfolios (often aligned with its Enterprise Agreement categories): Networking (Cisco DNA and Meraki), Data Center (Applications Infrastructure), Collaboration, Security, and Services.
Each has its licensing models and cost drivers:
- Cisco DNA (Digital Network Architecture) – Applies to enterprise networking (switches, routers, wireless). Licenses are typically per-device with tiered feature sets (Essentials, Advantage, Premier). They are sold as subscriptions (often 3-, 5-, or 7-year terms) attached to hardware. Key cost drivers are the number of network devices, the feature tier, and the term length. Notably, Cisco made DNA subscriptions mandatory on new Catalyst hardware – you get a perpetual base OS license for basic L2/L3, but advanced software requires an active DNA subscription. If the subscription lapses, the device keeps basic functioning, but you lose ongoing updates/upgrades for DNA features. Hardware support (Smart Net Total Care) is usually separate from the DNA software subscription cost.
- Cisco Security – A broad portfolio including firewalls (ASA/FTD), SD-WAN security, Umbrella (DNS security), Secure Endpoint (formerly AMP), Identity Services Engine (ISE), Duo MFA, and more. Licensing metrics vary widely: per-user (for Duo, AnyConnect VPN, etc.), per-endpoint or device (for Secure Endpoint, ISE – often counted by number of endpoints authenticated), throughput or appliance size (for firewall hardware or virtual appliances), or feature bundles. Cost drivers include the number of protected users or devices, the level of features (e.g. Firewall Threat Defense tiers, ISE Essentials vs Advantage vs Premier licensing), and subscription term. Cisco often sells security as bundles (e.g., the Cisco One or Security Choice bundles that package multiple security products). Be wary: bundles can mask the cost of individual components and lead to paying for things you don’t need. Cisco’s Enterprise Agreement for Security (formerly “Security Choice”) typically requires a minimum total contract value (e.g. US$100K+) and covers a suite of security products under one subscription.
- Cisco Collaboration – Covers Unified Communications (Call Manager, Jabber), conferencing and telephony (Webex Meetings, Webex Calling), and contact center. Cisco now sells these largely through the Collaboration Flex Plan, which offers an Enterprise Agreement model measured by “Knowledge Workers” (basically named users/employees). For instance, a Collaboration EA might require committing all employees to be Knowledge Workers with a minimum of 250 users to start. This includes licenses for multiple collab tools (calling, meetings, messaging) with a growth allowance (often ~15% over the term). Cost drivers are the number of users (knowledge workers), and the mix of products (you can choose specific workloads or the whole Webex Suite). There are also non-EA models like Named User or Active User licensing for Webex, but large enterprises often find Cisco pushing the all-in EA. Ensure you understand what a “knowledge worker” covers – usually any employee with a phone, voicemail, or meeting account counts, which means the license scope can be enterprise-wide.
- Cisco Data Center (Applications Infrastructure) – This includes software for data center networking (NX-OS, ACI for Nexus switches), SDN controllers, and virtualization (Cisco UCS software, Intersight, etc). Cost drivers can be hardware-based (per switch or port licenses, as with Nexus NX-OS feature licenses or ACI software leaf/spine licenses) or capacity-based (e.g. UCS compute licensing by number of servers or cores). There are also subscriptions like Cisco ONE (now folded into DNA for campus and Network Advantage licenses for data center) that bundle software features. Make sure to differentiate between perpetual licenses (e.g., Nexus switch feature licenses, which you buy once) and subscriptions (like ACI software, which might be term-based). In Cisco EA terms, the Data Center enrollment also had a minimum ~$100K total contract value to qualify.
- Cisco Services – This refers to support and success programs. Cisco sells support via maintenance contracts (Smart Net for hardware, Solution Support, and Software Support Service – SWSS – for software). In an EA, “Services” can be a separate enrollment covering things like Cisco Technical Services. Support costs are a significant driver of total cost: even if you negotiate big product discounts, Cisco often holds its maintenance pricing with less flexibility. Be aware that if you include Services in an EA, Cisco usually requires 100% coverage of the products – e.g. you can’t half-support some devices; the EA would bundle support for all. In any case, factor support renewals and potential price hikes are included in your cost projections.
Key Cost Drivers Summary: Across these portfolios, Cisco licensing might be based on users, devices, throughput, CPU cores, or features enabled – sometimes all at once. This complexity makes it critical to identify which metrics drive your costs the most. For example, suppose you’re negotiating Cisco ISE (Identity Services Engine) licenses. Your cost is driven by the number of concurrent endpoints/devices authenticated and which feature tier you need (Base, Plus, or Apex). If it’s Webex, it’s several users and whether they need full Meeting host capabilities.
Cisco can license per-user, per-device, per-core, per-site, etc.; losing track is easy. Tracking Cisco licenses without a proper system is so difficult that only ~35% of companies have the tools to accurately meter their Cisco software usage. Always pin down what unit you’re paying for and how those counts might grow.
Cisco’s push to subscriptions also means cost drivers include term lengths and renewal rates. One-time perpetual licenses are becoming rarer; Cisco’s CEO has aimed for ~50% of revenue to be subscription by 2025. Subscription licensing introduces recurring costs and often automatic renewals—if you’re not careful, your spending can ratchet up over time.
The good news is that subscriptions sometimes bundle support and upgrades. The bad news is that you’re locked into paying annually and face renewal price risk. We’ll address that in the renewal section.
Hidden Costs, Bundling Traps, and Renewal Lock-Ins
Cisco’s deals can come with hidden costs and traps that inflate the true price over the lifecycle. As a CIO negotiator, you need to peel back the layers:
- Software Support and Upgrades: Buying a Cisco software license (even a “perpetual” one) isn’t a one-and-done cost. You’ll likely need an annual support contract (e.g., SWSS for enterprise software) to get software updates, bug fixes, and technical support. This is a hidden ongoing cost – often ~20% of the license fee per year – that many forget to budget. For subscription licenses, renewal costs can increase year over year; Cisco may offer a discount for the first term and then try to raise the price at renewal. Always clarify your support entitlements and their cost. If a license is perpetual, ask, “What will it cost me each year to keep this current and supported?” If it’s a subscription, ask: “Is support included, and are there caps on renewal price increases?”
- Hardware Dependencies: Some Cisco software solutions require specific Cisco hardware or appliances that come at an extra cost. For example, deploying Cisco ISE might require you to purchase Cisco appliance hardware or allocate VMs, and you might need redundant appliances for high availability – doubling the license count in some cases. Likewise, Cisco DNA Center (for SD-Access) requires a DNA Center appliance. These hardware pieces (and their support contracts) are additional costs that may not be obvious when looking at software license prices alone. Make sure Cisco isn’t bundling a software deal that quietly assumes you’ll buy costly hardware to use it.
- Bundling “Deals” and Shelfware: Cisco loves to bundle products across its portfolio, pitching it as a way to save money. The trap is that these bundles often include products or features you don’t need or won’t fully use. Cisco sometimes provides little visibility into line-item pricing in a bundle, making it hard to tell what each component effectively costs. You may overbuy and end up with shelfware (unused licenses sitting on the shelf), yet you’re paying for support on all of it. This is a classic scenario leading to toxic spending. For example, Cisco might bundle its security suite (firewall, umbrella, AMP, ISE, etc.) under an EA “Security choice” bundle. You get a bit of everything, but perhaps you only need 3 of the five products – the rest just inflate the bill and add shelfware. To avoid this, demand line-item transparency (what are we paying for each element?) and push to remove components you don’t value. You can also negotiate smaller bundles or only the specific product “suites” you need. Remember, once you sign, Cisco usually won’t allow swapping one product for another – unused licenses can’t typically be traded in for something else later. So what you buy is what you’re stuck with.
- Renewal Lock-In: Cisco’s sales strategy is to get customers onto multi-year agreements or subscriptions, knowing that when renewal time comes, it will be painful to switch away. As one Cisco partner executive said, the more Cisco can get customers into Enterprise Agreements, “the more it creates a stickier environment overall”. “Sticky” is an understatement – if your entire network runs on Cisco DNA software and that subscription expires, you face a disruptive transition or a big check to renew. Hidden in many deals are clauses or practical realities that lock you in at renewal:
- If you bought hardware at a steep discount tied to a subscription, that hardware may be functionally crippled without renewing the software (e.g. advanced features or management might stop). You’re effectively a hostage to renewal.
- Cisco EAs include a True Forward process (no retroactive billing, but you must pay going forward for overuse). While this is better than surprise back-billing, it also means that your renewal bill will jump if you grow in usage. And if you try to scale down, you may have already paid for more than you used (no true down refund).
- Many Cisco deals have auto-renewal provisions for support or cloud services. If you don’t actively cancel or renegotiate, you might roll into an extension at possibly higher rates.
- Cisco often requires enterprise-wide coverage in an EA (100% of users or devices). Without breaking the agreement, you can’t partially roll off Cisco for certain segments.
How to counter lock-in: During the initial negotiation, anticipate the endgame. Negotiate the ability to adjust or exit at renewal without prohibitive cost.
For instance, lock in pricing for renewal term options upfront (Cisco may resist, but it’s worth trying to agree on a price cap or extension price now).
Ensure you have visibility into usage throughout the term (so you’re not blind at renewal) and avoid one-size-fits-all bundles that force you to renew everything even if only part is needed. We’ll cover more in the Renewal Strategy section.
Negotiating Cisco Enterprise Agreements (EA)
Cisco Enterprise Agreements are a double-edged sword: they can simplify purchasing and offer discounts but also bundle spending into one large commitment.
To negotiate an EA in your favor:
- Determine if you truly need an EA: Cisco will often be the one to propose an Enterprise Agreement, not you. They position it attractively – “one contract for all your Cisco software, big discount, easy management.” But you should only go EA if it genuinely fits your consumption. A la carte may be cheaper if you only need one or two product lines at a smaller scale. Cisco EAs make sense mainly if you broadly use Cisco software (networking + security + collaboration, for example) or if there is a large volume in one area. Also, consider the alternative: multi-vendor strategies. If you prefer best-of-breed in each category, an all-in Cisco EA could discourage you from using other vendors. Don’t let the bundle discount automatically sway you – evaluate if a more modular approach yields better tech or leverage.
- Understand EA structure and commitments: Cisco’s EA 3.0 covers five portfolios (Networking, Applications/Data Center, Collaboration, Security, and Services). You can choose one or multiple to include. Each has minimum commitments (e.g. ~$100K minimum contract value per portfolio and 250-user minimum for Collaboration). EAs are typically 3 or 5 years. Crucially, Cisco no longer offers the unlimited “all you can eat” EAs of the past – now they are fixed-count with a growth allowance (usually 15-20%). Negotiation point: Make sure the growth allowance is sufficient and clearly defined. Cisco commonly gives 20% growth for most portfolios (and 15% for collabs in EA 3.0), where you won’t be charged extra if your usage stays within 120% of your baseline. Confirm what happens if you exceed it (True Forward). Also, verify that it’s not inclusive on top of your base.
- Right-Size the EA (Don’t Overcommit): One of the most important aspects is sizing your EA correctly. Cisco will try to convince you to cover all your employees and devices as much as possible to “simplify” things. But if you oversize (commit far more licenses than you’ll use), you’re paying for shelfware from day one. If you undersize too much, you’ll pay later when True Forward kicks in for over-usage. Strategy: Use Cisco’s End User Information Form (EUIF) early in negotiations. This document records your current counts of users/devices by product. Scrutinize it! It will set your baseline and 15-20% growth cap. You want that baseline as low as credibly possible without being unrealistic. For example, if you have 8,000 employees but only 5,000 will use Webex, don’t let Cisco set 8,000 as the baseline “knowledge workers” – perhaps carve out non-users or external contractors, etc., to lower it. In some cases, intentionally slightly undersizing your EA and using the growth allowance to cover the rest can maximize value (e.g., commit 5,000 users knowing you can use 6,000 without extra cost under 20% growth).
- Beware the Ramp-Up Issue: An EA gives you entitlement to a bunch of software from day one, but you likely will roll it out over time, not immediately. Cisco’s cost justification assumes you use everything from day one, which is rarely true. For instance, if you sign a 3-year EA for 1000 firewall licenses but it takes you a year to deploy them, that’s one year those licenses sat “idle” but you paid for it. This is lost value – effectively, you paid maintenance for that year on unused licenses. Use this point in negotiations: perhaps start certain subscriptions later, or demand a prorated credit for late deployments. If Cisco won’t budge, at least factor it in when comparing EA cost vs. purchasing as-needed. In extreme cases, consider phasing the EA (e.g., add a product later when ready, co-termed).
- Push for Credits on Existing Investments: If you recently bought Cisco software or hardware outside of an EA, you don’t want to pay twice. Cisco can now provide credit for prior purchases being rolled into the EA. For example, if you bought 500 Catalyst switch DNA licenses last year and now agree to an EA covering them, push for a credit or discount equivalent to those existing licenses’ value applied to your EA fee. Cisco may apply these credits as a one-time discount line item. This can be a significant savings, essentially not double-charging you for things you already paid. You must demand this; it won’t be offered freely.
- Negotiate Flexibility and Exit Options: Cisco’s EA terms can be rigid by default. However, when you’re signing, you have leverage, so use it. Key areas to negotiate:
- Extension or Renewal Terms Upfront: Don’t leave renewal to be a surprise at the end. Negotiate the right to extend the EA term at a predetermined price or discount level. If you get it in writing that you can renew for two more years at the same per-unit cost, it prevents Cisco from price-gouging you later when you have no alternatives.
- Ability to Reduce Scope: Cisco EAs typically have no give-back mechanism (no refund for dropping a product). But you can negotiate the ability to drop a suite at renewal, or at least not auto-renew unused pieces. Cisco will resist refunds (they “firmly” don’t refund prepaid fees). Still, you might get language to allow swapping one product for another of equal value if technology needs change – even though Cisco usually says no swaps, in a big deal you might negotiate a one-time swap option for, say, a successor product or a different bundle if a product is deprecated.
- Termination for Cause and Refunds: Ensure standard protections: if Cisco fails to deliver a service (e.g., a cloud service is down significantly or a product is end-of-lifed), you should have the right to terminate that portion and potentially get a refund for the unused term. Cisco’s contracts often try to decouple your payments from their performance (because you pay upfront), but insist on clauses that protect you if Cisco doesn’t hold up their end (even if it’s limited to future fees or credits).
- Avoid “All or Nothing” Across Portfolios: If you include multiple portfolios (say Network and Security in the same EA), check if they are co-dependent. They will share term dates, but you want the freedom to decide not to renew one portfolio without automatically killing the other. Sometimes, Cisco ties them together by incentives (e.g., discount assumes you keep both). Try to maintain the ability to renew or not per portfolio.
- Insist on Negotiating the Paperwork: Cisco EAs often come via a Value-Added Reseller (VAR). The VAR may present Cisco’s standard EA terms as non-negotiable boilerplate. Do not accept that at face value. Negotiating many terms in or alongside the EA program terms is possible. Make it clear from the start that you will negotiate the contract language, not just the order. Ideally, Cisco’s representatives and legal team should be directly involved in these discussions. VARs have limited authority and may just relay messages; get Cisco to hammer out terms at the table. Remember, for a large EA, Cisco will engage (it’s their revenue on the line) – don’t let them hide behind the partner. The Network World experts noted that a middleman-only negotiation often leads to sub-optimal outcomes.
- Watch the Stacking of Terms: Cisco’s contracts can be convoluted – EA terms reference product-specific terms, which reference general terms, etc. Ensure you or your legal counsel review all layers to spot nasty surprises (like automatic price increases, usage reporting requirements, confidentiality of discounts, etc.). Reconcile any conflicts by negotiating clarifications in writing. Cisco won’t rewrite their whole standard for you, but they can issue a side letter or an amendment for your deal that clarifies any points of confusion or conflict in your favor.
Negotiating a Cisco EA is about controlling scope and future risk. Size it right, don’t pay for more than necessary, secure concessions for known issues (growth, credits, extensions), and push back on boilerplate that doesn’t serve you.
If done on your terms, an EA can yield cost savings and simplify management; otherwise, it can become an over-budget albatross.
Always remember: no matter what a partner or Cisco rep says, everything is negotiable when your spend is large enough – including things they claim are fixed program rules. You might not get all the desired changes, but you won’t get what you don’t ask for.
Smart Licensing and Smart Accounts: Risks and How to Regain Control
Cisco’s move to Smart Licensing (centralized, account-based license management) is a blessing and a curse for customers. It provides Cisco (and you) better visibility into license usage and introduces compliance risks and control issues that CIOs must proactively manage.
- The Visibility Dilemma: Traditionally, Cisco licensing was distributed – activation keys on each device, paper contracts, etc. Companies often had poor visibility into what they purchased versus what was deployed. (Only about 35% of companies can properly track their software usage without a tool.) Cisco introduced Smart Accounts to solve this: all licenses get deposited in a cloud portal (Cisco Smart Software Manager), and devices report usage to this account. Theoretically, you now have one pane of glass for entitlements and consumption. However, this only helps if you use it. If your Smart Account is managed by a third-party or siloed team, you, as CIO, might still lack visibility. Risk: We’ve seen cases where a partner created the customer’s Smart Account, and the customer wasn’t monitoring it – they were blind until a non-compliance warning hit. Regain control by insisting on direct access: ensure your organization owns the Smart Account login and has staff checking it regularly for status and expirations.
- “Phone Home” Compliance Enforcement: Smart Licensing fundamentally changes the compliance model. In the past, if you were out of compliance (too many instances, etc.), Cisco might not have immediately known and would have had to audit you. Many Cisco products self-report usage to Cisco’s cloud in real time or near real time. For example, starting with IOS-XE 16.9, Cisco required devices to connect to the Smart Licensing server and validate entitlements. Otherwise, the device’s functionality could be reduced or shut offafter a grace period. This was a huge shift – a kill switch if you weren’t compliant. Such a mechanism can terrify a CIO: an unseen licensing lapse could theoretically knock out a router or switch. Cisco has since adjusted (with “Smart Licensing Using Policy” in newer IOS, devices don’t shut down but log usage and require reporting). Still, the principle stands: Cisco now has far more power to enforce software licensing. The risk is not just an audit and a fine, but potentially operational impact if you let licenses lapse. How to counter: Always maintain a buffer of licenses (don’t run at 100% of entitlement), and use Cisco’s Smart Account tools to set up email alerts for any “Out of Compliance” status. There is usually a grace period (e.g., 90 days) to rectify issues before any service impact, but you do not want to scramble on day 89. If you have devices that can’t phone home (isolated networks), use Cisco’s permanent license reservation or offline licensing options so they aren’t mistakenly seen as unlicensed.
- Compliance Exposure and Audits: With Smart Accounts, Cisco can see your usage data directly, arguably reducing the need for formal audits – but don’t be lulled into complacency. Cisco still reserves the right to audit your records, and the Smart portal data could prompt them to inquire if something looks off. A big risk is inadvertent overuse: e.g., spinning up an extra ASA virtual firewall without a license or repurposing a license in violation of terms. You might not catch that in a manual world, but Cisco will catch it in smart licensing. The consequence is usually a True Forward (you must buy the needed licenses as we advance) rather than a penalty, but it could escalate if Cisco suspects a willful violation. Note that a survey found ~70% of businesses have been audited by a software vendor in a year, and fear of audits causes companies to overspend ~28% beyond needs. Don’t overspend out of fear – instead, actively manage compliance. Use the Smart portal data to perform your internal true-ups every 3-6 months. If you see you’re trending over, talk to Cisco about purchasing additional licenses before they come after you. This proactive approach can turn a potential audit into a straightforward purchase, often with a discount if negotiated outside the pressure of an official audit.
- Lack of Internal Visibility: While Cisco has more visibility than ever, many customers still struggle internally. Smart Accounts can be split into virtual accounts (by department, etc.), and it can be confusing who in your company is adding what. You might have shadow IT spinning up a Cisco virtual appliance and consuming a license, unaware. To regain control, institute governance requires that all Cisco license actions (activations, moves) be done by a central team or at least logged. Review the Smart Account regularly. Cisco’s portal can generate a report of entitlements vs. usage – use these to brief your team quarterly. Consider integrating the Smart account data with your ITAM (IT Asset Management) systems for consolidated tracking in large organizations.
- Data and Privacy Concerns: Smart licensing involves sharing much device data with Cisco. Cisco collects product IDs, serial numbers, hostnames, IPs, etc.; personal information might be transferred to Cisco’s systems as part of the account info. While this is usually innocuous (used for license tracking), some organizations in regulated industries have raised flags about network topology or device info leaving their premises. If that’s a concern, Cisco offers an on-premises Smart License server (Cisco Smart Software Manager On-Prem, formerly Satellite). This lets your devices report to a local server, which you sync with Cisco manually, so sensitive details don’t flow continuously outside. Regaining control might mean deploying such a system, especially for isolated or sensitive environments.
- How Smart Licensing Can Bite You (Example): Consider a company that upgraded to new Catalyst 9300 switches, which use Smart Licensing. They deploy them but don’t immediately register them to their Smart Account (maybe an oversight or network firewall issue). The switches start in an evaluation mode. After a period, they log “out of compliance” because they can’t validate a DNA license. The network continues running (Cisco has a grace period and now a “soft enforcement”), but the Cisco account manager sees flags on their dashboard that the customer has unregistered devices. This could lead to an uncomfortable conversation where Cisco asks when you’ll buy the needed DNA subscriptions – even if you already purchased them but failed to activate them properly. The lesson: process discipline. Treat license activation as part of the device deployment checklist. And if Cisco ever implies you’re out of compliance and must buy something immediately, double-check your records; it might be an administrative issue rather than a true shortfall.
How to Maintain Control:
- Own the Account: Ensure the Smart Account is under your company’s control, not the reseller’s. Multiple admins from your side should have access to avoid single points of failure.
- Utilize Smart Tools: Use Cisco’s License Manager or API to pull usage data into your monitoring dashboards. Visibility for you is power.
- Set Policies: Establish internal policies that state that no Cisco product is deployed without proper licensing in the Smart Account. If a team wants to evaluate something, have them inform procurement to maybe get a demo or eval license (Cisco can provide time-bound eval licenses in the Smart Account).
- Leverage Smart for Negotiation: The flip side of Cisco seeing everything is that you have data to negotiate with. You can show, for example, “We only used 70% of our licenses this year” at renewal time to argue for downsizing or better terms. Or, conversely, “We plan to grow usage by 50%; let’s negotiate a price for those now rather than pay a true-up later.”
- If Things Go Wrong: If you ever get in a bind (e.g., a major out-of-compliance situation), involve Cisco honestly early. They have programs (and a desire) to resolve it by selling you the right licenses, possibly with some discount, rather than dragging you through legal battles. Your leverage in that scenario is limited, but demonstrating good-faith effort to comply can turn it into a standard purchase negotiation rather than punitive action.
In summary, Smart Licensing requires proactive management but can be turned to your advantage. It’s a tool – make sure you wield it, not just Cisco. Don’t let Smart Licensing be something that “just happens in the background.” Bring it into the foreground of your asset management strategy.
Dealing with Cisco Sales Tactics (and How to Counter Them)
Cisco’s sales reps (and partner sellers) are well-trained in techniques to close deals in Cisco’s favor. As a CIO or procurement lead, you’ll encounter common tactics like time-limited discounts, bundle pushes, and even subtle threats.
Here’s how to recognize and counter these moves:
- Quarter-End Discount Deadlines: Cisco operates on quarterly targets. As a quarter (or Cisco’s fiscal year) ends, it’s almost guaranteed that you’ll hear something like: “This pricing is only valid if you sign by the end of this month; otherwise, we can’t guarantee it.” This is a pressure tactic. While it’s true that discounts often need internal approval and may expire, it’s also true that if the deal slips, Cisco will usually find a way to extend or re-approve a similar discount next quarter – especially if the competition is in play or the deal is significant. How to counter: Don’t be rushed into a suboptimal deal to meet Cisco’s timeline. Test the seriousness – you can say, “Our decision process won’t conclude by then. If the discount is gone, we must consider alternative vendors or delay the project.” Often, magically, the discount gets extended. However, use quarter-end to your advantage when you are prepared: the best time to finalize a well-negotiated deal is late in Cisco’s quarter, when they are hungriest. Cisco has increased discounts at quarter-end to get the PO in. So, try to time your negotiations so that Cisco knows the deal can close in their current quarter, but make it clear that you won’t sign until the terms are right. If they sense it’s “now or never,” they’ll sharpen the pencil. Just ensure you are ready to walk if they pull the offer after the quarter – sometimes, a specific promo might expire. Get any critical discount commitments in writing (email) from Cisco so you have a trail if they try to retrade later.
- Bundling and Upsell Pressure: As mentioned earlier, Cisco frequently proposes bundling more products or migrating you to an Enterprise Agreement covering additional areas. You might start negotiating for, say, network hardware refresh, and suddenly the rep is pitching a full Cisco EA including security and collaboration “for a better price.” This can be appealing (“one-stop shop, and look at the discount percentage!”), but remember the bundling traps. How to counter: Insist in evaluating each component based on its merit. Tell Cisco you want to see the option pricing: What if you only buy the network gear and not the other stuff? Force them to provide a breakdown or at least separate quotes. Often, once separated, it becomes clear that the “great deal” is bloated. You can also play hardball: “We budgeted for networking this year; the security (or collab) project is not approved. If you can’t do a networking deal without forcing those, we’ll have to consider Juniper/Aruba/etc. for this refresh.” This reminds Cisco that the bundle pitch could backfire and lose them the core deal. Another tactic is to try alternative vendors for the upsold component. For instance, if Cisco pushes their security bundle, engage a Fortinet or Palo Alto POC in parallel. If Cisco realizes they might lose the security piece entirely, they may relent and offer a good price on what you want rather than overselling. In negotiations, maintain the stance: “We only pay for the value we need.” Cisco reps are compensated more when they sell multi-architecture solutions so that they will try – but you have every right to say no and purchase à la carte.
- “Better Act Now, Price is Going Up” and Other FUD: FUD stands for Fear, Uncertainty, and Doubt. Cisco reps may drop hints like: “Prices are increasing next quarter due to component costs” or “This special discount is unusual; my boss is doing a favor”. Take these with a grain of salt. Cisco occasionally adjusts list prices, but you can usually negotiate protection if a hike is looming. And special discounts are part of their job to secure, not personal favors. How to counter: Ask for specifics – “When is the list price increase and how much? Can you lock in current pricing in our quote?” If they can’t give specifics, it’s likely a soft tactic. Also, keep informed via news or peers about Cisco pricing trends (for example, if tariffs or supply chain issues are causing industry-wide hikes, that might be true – otherwise, assume it’s sales rhetoric).
- Audit and Compliance Threats: An extreme, but not unheard-of, tactic is where a Cisco rep or partner hints that if you don’t purchase the proper licenses or renew support, you might face a compliance audit or lose support on your network. This can happen if you have a lot of equipment out of support contract and Cisco wants you to renew. They might say, “If something fails and it’s not under support, you’re in a tough spot… Also, Cisco’s policies don’t allow unofficial support; you should get compliant.” Some customers have even felt “threatened” by mentions of license audits if they consider third-party maintenance. While Cisco does have the legal right to audit your use of software, using that as a sales pressure tool is frowned upon – but it can happen between the lines. How to counter: If a rep crosses the line into threatening territory, call it out and, if needed, escalate to their manager or your Cisco account manager. You can respond calmly with, “We manage our compliance carefully. If Cisco has a compliance concern, we can address it separately, but it should not be part of a sales negotiation.” This lets them know you won’t be bullied. Internally, of course, ensure you are compliant or have a plan – don’t give anyone ammo to use against you. Keep records of your entitlements, and if an audit does happen, handle it formally through your legal/licensing team (Cisco usually uses a third-party auditor or their internal Cisco Audit Services). In many cases, audit issues end with buying the needed licenses, which you might have done anyway – so don’t overreact to a threat. Keep negotiation discussions focused on the future value, and don’t get derailed by hypotheticals of audits.
- The Quarter-End Rush and Stall Tactics: Sometimes Cisco will try to rush you (to sign fast); other times, they may stall providing information if they think you’re not going to sign until a later quarter (to avoid giving you too much leverage now). If you notice delays in getting quotes or answers, it could be tactical – they might prioritize deals that can close this quarter. How to counter: Maintain your timeline. Set clear expectations: “We need the detailed quote by X date to consider it for this cycle.” If they miss it, use that as leverage later (“We missed our budget window because of Cisco’s delay; now you need to do better on price to make up for it”).
- High-Pressure Tactics (In-Person or Calls): You might experience the classic sales maneuvers: bringing in Cisco executives to sales calls to persuade your C-level, daily phone calls as deadlines approach, or offers of “executive briefings” at Cisco HQ (which are partly sales efforts). These aren’t nefarious but can cloud the negotiation with relationship appeal. How to counter: Keep a clear separation between courtesy and commitment. It’s fine to attend Cisco’s briefing or listen to their VP wax poetic about partnership, but always circle back to: “This sounds great, but it comes down to ensuring the terms and pricing make sense for us.” Cisco is a master at relationship selling, which is valuable, but your job is to ensure the deal stands on its own merits.
In all cases, preparation and documentation are your allies. Know what you want, the fair price (benchmark!), and keep records of what Cisco offers or implies. If a Cisco rep promises something verbally (“We’ll give you 50% off on that if you take this bundle”), politely ask them to put it in the quote or an email. This holds them accountable and cuts through any bluff.
Finally, don’t hesitate to use Cisco’s hierarchy to your advantage. If a sales tactic makes you uncomfortable, involve your management and ask for a higher-level conversation. A Cisco account manager might push you hard.
Still, if you voice your concerns, a Cisco regional manager or executive sponsor might be more interested in the strategic relationship and rein in aggressive tactics. Cisco values long-term relationships and big-picture outcomes, so remind them that you’re looking for a fair partnership, not a one-sided deal.
Tactics for Pricing Leverage
To negotiate the best pricing with Cisco, you must create leverage – reasons for Cisco to give you a better discount than the default. Like most vendors, Cisco has structured discount tiers and plenty of margin, but they won’t part with it unless pressed. Here’s how to maximize your leverage:
- Use Competition (Credible Alternatives): The single strongest lever is the threat of losing the deal to a competitor. If Cisco believes the business is 100% theirs, no matter what, they become an “order taker” and have little incentive to offer a deep discount. Ensure that Cisco knows you have viable alternatives. This could mean getting a comparative quote from another vendor (Juniper for routing, Arista for switching, Microsoft/Zoom for collaboration, Palo Alto for security, etc.). Even if you strongly prefer Cisco, do the legwork of evaluating a Plan B. Cisco’s salespeople are skilled at sniffing out bluff versus real competition – so make it credible. Perhaps run a pilot or proof-of-concept of another solution, or have a third-party assessment that shows switching costs are not prohibitive. Issuing an RFP or showing a competitor’s proposal can prompt Cisco to improve its offer. Tip: Be careful with partners; if the same reseller sells both Cisco and a competitor, they might tip off Cisco. Use separate channels or nondisclosure if needed. You will notice much friendlier pricing and terms once Cisco sees a competitor in the mix.
- Leverage Total Spend (Think Big Picture): Cisco often gives inconsistent discounts if you negotiate deal by deal – a small purchase might get low discount, a big one gets high discount. You can turn this into leverage by bundling your demand (not the way Cisco bundles products, but bundling your purchasing volume). For example, instead of negotiating switch purchases site by site, consolidate your annual network hardware needs and negotiate once as a larger package. Show Cisco the sum of what you plan to spend in a year or two, even if across projects. Cisco would rather not risk you carving out portions for other vendors, so they may offer a better overall discount if you commit to a larger total.You can formalize this in a volume purchase agreement – essentially a custom discount structure for all purchases in a category over a period. Cisco can agree to standard discounts regardless of purchase size if you ask for it when you have maximum leverage. The best time to lock this in is during a big negotiation (like an EA or a large refresh). For example, “Cisco, we will spend $5M on switching over 3 years, but we want an agreement that any switch we buy is at 70% off list, not the 50% you sometimes give on smaller orders.” This kind of agreement (sometimes called a Global Pricing Agreement or discount letter) can smooth out future negotiations and prevent the “small deal penalty.”
- Timing – End of Quarter/Year: As mentioned, Cisco’s fiscal year-end (usually late July) and quarter ends (Oct, Jan, Apr, Jul for Cisco fiscal Q1-Q4) are key pressure points for them. If you can time a purchase around these, do so. Conversely, Cisco may be less motivated if you negotiate in the first month of a new quarter. Use that knowledge – if you are not satisfied with the offer and it’s early in the sales period, you might decide to wait, signaling to Cisco that they’ll have to come back stronger later. Cisco also sometimes has targeted promotions near year-end (e.g., extra discount on certain product lines to boost subscription numbers). Keep an eye out for any special programs through your reseller or Cisco contacts.
- Benchmark and Data-Driven Negotiation: Come armed with data on what “good” looks like. There are consulting firms and public sector contracts that give clues to Cisco discounting. For instance, maybe you know a peer company got a 75% discount on a similar EA, or a government contract lists Cisco equipment at 60% off list. Use those as benchmarks (cite them if you can, anonymized if needed). Cisco’s initial quotes might be only 30% off list, but fair market value could be significantly lower. Tools or others analyze deals and often find that Cisco’s first offers are far above what others have paid. You can say, “Our analysis shows this proposal isn’t in line with industry pricing – we need you to do better.” Cisco won’t want to divulge others’ prices, but if you show that you’ve done your homework, they’ll realize simple bluffing won’t work.
- Reseller Dynamics: Understand that Cisco sells through resellers who take a margin. Interestingly, a reseller’s margin is usually a percentage of Cisco’s list price, not the discounted price. This means the reseller has no incentive to fight for a bigger discount for you – their cut goes down if the discount goes up (since their percentage is applied to a smaller number). Additionally, Cisco has deal registration and incumbency rules that protect one reseller from undercutting another on the same deal. What does this mean for leverage? It means bidding out to multiple resellers often won’t yield price competition – they all get the same Cisco price for you once one is chosen. Don’t waste time playing resellers off each other, expecting a huge price difference; focus on Cisco. You might still switch resellers if one offers extra value-add or slightly cuts their margin on services, but the product discount largely comes from Cisco. Therefore, Cisco should be involved directly in pricing discussions early. Let them know you understand the reseller’s role and that final pricing approval comes from Cisco anyway. If needed, request Cisco’s pricing team or a “Business Desk” to engage in your deal.
- Use Third-Party Maintenance or Solutions as Leverage: Another way to get Cisco to sharpen its pencil is to show that you’re willing to limit your Cisco spend if they don’t cooperate. For example, third-party maintenance companies can support Cisco hardware (post-warranty) at a fraction of Cisco’s SmartNet cost. If Cisco is overcharging for support, you can threaten to move the maintenance of some devices to a third party. Cisco hates that – not only do they lose revenue, but it opens the door for competitors to slip in during a hardware failure. Even though Cisco will warn against third-party support (no software updates, etc.), it’s a legitimate option for non-critical gear. Use it as a bargaining chip: “We are considering keeping only critical devices on SmartNet and moving the rest to a third party to save cost. That’s our plan unless Cisco can provide a more competitive support pricing.” This can prompt Cisco to give you a special discount on support or throw in additional years at a lower cost to dissuade you. Similarly, if Cisco’s offer on a certain product is too high, be ready to say you will go with a rival product for that piece. Even partial deals lost hurt the sales team’s quota, so partial leverage is still leverage.
- Multi-Year and Multi-Portfolio Leverage: If you commit to a longer term or broader scope, you can ask for a greater discount. But be careful: Cisco will gladly give a bit more percent off in exchange for locking you into more years (because that guarantees revenue). Only use this if you’re truly comfortable with the commitment. As a leverage tactic: “If you can get to X% discount, we’re prepared to sign for a 5-year term instead of 3 years.” Or, “Include our collaboration licenses into this deal at the same discount, and we’ll do it all now.” Essentially, you’re offering Cisco a larger deal in exchange for a better price. This usually works because of the way Cisco and reseller sales targets work – bigger deal = bigger quota relief. Just ensure the bigger deal isn’t bigger than you intended just for a discount. It should make business sense on your end, too (like locking pricing while expecting growth).
- Walk-Away Power: Ultimately, your strongest leverage is the willingness to say no deal. If Cisco isn’t meeting your requirements, you must be willing to pause or walk away. This is easier said than done if Cisco is deeply embedded, but you can walk away from an EA negotiation and just renew what you have, or walk away from a hardware quote and defer a project or buy a small amount to get by. If Cisco believes you have to buy, you lose leverage. If they see you can defer or choose another path, they will come back to the table. Use time as a weapon: not rushing (when you can afford to wait) signals that you won’t be pressured.
Summary of Pricing Tactics: Assemble a clear case to Cisco for why they should give you the best deal: show them you have alternatives (or at least alternative strategies), show the total opportunity of your account (so they know what’s at stake), time it for when it matters to them, and do your homework on market pricing.
When Cisco senses an informed customer with options, they shift from maximizing their share to securing your business at a fair price. That’s where you want to be.
Renewal Strategy: Avoiding True-Up Traps and Reducing Shelfware
What you do at renewal time is a huge part of winning the negotiation game. Whether it’s a support contract annual renewal, a multi-year Enterprise Agreement coming due, or subscription licenses expiring, how you handle renewals can lock in past inefficiencies or correct course and save money.
Cisco often banks on inertia at renewal – don’t give it to them.
- Start Early and Audit Everything: Do not wait until a few weeks before expiration to review your Cisco renewal quote. Cisco typically sends renewal notices 90 days out (for subscriptions/EAs), but you should start even earlier – 6 to 12 months before a major EA renewal – to assess your usage. Conduct a thorough license audit: What have you used? What have you not used? Compare your entitlements versus actual usage in the Smart Account or your records. This is where all the shelfware we discussed comes to light. Perhaps you licensed 10,000 users of Webex but only ever onboarded 6,000. Or you had a DNA Advantage license for every switch but only used the basic features on many. Quantify this. The goal is to identify where you’re over-provisioned or under-utilizing – these are prime targets to cut or renegotiate. Many CIOs find that they can drop 15-25% of their spending at renewal time by eliminating shelfware and unnecessary bundles.
- Challenge the True-Up (True Forward) Calculations: In a Cisco EA with True Forward, if you exceed the quantities you include, Cisco will adjust your bill upward at regular intervals (usually annually). Make sure the Cisco counts are accurate. Sometimes headcount or device counts can be inflated (e.g., maybe they counted a batch of decommissioned users in your “growth”). You can validate and dispute if the numbers are off before paying more. Also, if you’re nearing the end of an EA term and are over, note that any licenses added in the final True Forward might carry over if you renew. Cisco’s EA FAQ notes that licenses added in the last quarter will be captured in the next contract or require a minimal term purchase if you don’t renewcisco.com. If you’re in year 3 of 3 and suddenly go 30% over, you’ll pay 30% for one quarter of True Forward and need to pay going forward. You might decide to wait and roll new usage into a renewed EA instead of spiking your current one. Negotiation tip: If you know you’ve gone over significantly, use that as leverage in renewal talks: “We grew 30% beyond our EA. Instead of doing a True Forward at full price, we’d rather roll that into a renewal if you can give us a better rate.” Cisco might then propose a renewal that covers the new baseline at a more palatable price rather than charging list for overage now and then again on renewal.
- Don’t Auto-Renew – Re-negotiate: Cisco or the reseller may present the renewal as a pro forma thing – “Here’s your renewal quote, same terms, just sign and we’re good.” That quote likely includes everything you originally bought (including shelfware) and often at higher prices (any one-time discounts may not carry over without a fight). Treat renewal like a new negotiation. Just because you have been in an EA or had 1000 licenses doesn’t mean you need the same going forward. Return to first principles: what do you need for the next period? Maybe your company is down-sizing or moving some workloads to the cloud (e.g., adopting Office 365 instead of Jabber – fewer CUCM licenses needed). Maybe you plan to replace Cisco in a certain area but not immediately – you might only want a 1-year extension, not a full 3-year renewal. Do not let Cisco assume a status quo renewal. When you signal that you’re taking a hard look at renewal, Cisco will bring the account team with presumably a “Customer Success” angle to convince you of value. That’s fine – listen to them – but make your stance clear: “We are evaluating our needs and budgets from scratch.” This opens the door to drop or scale down. If you had an EA, you might decide not to renew the whole thing. Perhaps you’ll renew the network and security parts but not the collaboration (which you might replace with Zoom or Microsoft Teams). You can break an EA into pieces at renewal, even though Cisco prefers you don’t. It’s your right not to renew certain enrollments. Use the end-of-term flexibility to your advantage.
- Negotiate Renewal Pricing: Initial EA or subscription pricing was often aggressively discounted to win your business. Cisco might attempt to raise it on renewal, assuming switching costs will keep you on board. Always benchmark again at renewal. Maybe competitors have improved their offerings or offered incentives to switch. Bring those to Cisco and say, “We need to see pricing improvement, otherwise we have to consider other options.” Also, if you overpaid relative to usage last term (like you paid for 100 and used 80), argue that the effective price-per-use was higher than planned, so the renewal per-unit cost needs to be lower to realign value. If Cisco proposes new bundles or migrations (they often do at renewal – e.g., “move to the new Flex plan, or new tier”), scrutinize it as a new deal, not just an upgrade.
- Reducing Shelfware and Footprint: By the time of renewal, you should have a clear list of what licenses were underused. Prepare a cut list. For instance:
- We have 500 unused Webex licenses – cut them. We bought DNA Premier for all switches but only used it on half – perhaps downgrade some to DNA Essentials. We never deployed that Cloud Security module – remove it. Two hundred phones were never assigned to users – drop those CUWL licenses.
- Avoiding Renewal Creep: Renewal quotes sometimes sneak in incremental increases, maybe an uplift for inflation or a higher support tier. If you see any new line items or price increases compared to the original, question it. Ask, “Why is this higher than last time?” and “We need to maintain or improve our previous discount.” If Cisco claims list prices went up, verify against official price lists or use that to ask for a matching discount increase to offset (they have plenty of margin to do so).
- Consider Shorter Renewal if Uncertain: If you are unsure about Cisco’s long-term fit for you, don’t get locked in again for 3-5 years at renewal. You could negotiate a 1-year extension as a bridge (even if Cisco’s standard is 3 years, they can do one or 2-year EA terms if pushed, albeit at slightly lower discounts). This might be wise if, say, you’re in the middle of evaluating alternatives or awaiting a new technology. Yes, a shorter term might cost a bit more in annual rate, but it gives you flexibility and leverage next year when you might be ready to transition or negotiate a new deal with better info.
- Plan Transition If Not Renewing Parts: Plan carefully if you drop a portion (for example, not renewing a Webex EA because you’re moving to another platform). Ensure data migration, user communication, etc., so that Cisco’s expiration doesn’t catch you off guard. Cisco typically gives a grace period, or the service will shut off promptly at the end of the term, depending on the product. So, we have the new solution ready to go. From a negotiation standpoint, having that plan makes your threat to drop very credible – you can tell Cisco, “We have already migrated 50% of users to Zoom in a pilot, we are prepared to move the rest, so unless the renewal is massively more cost-effective, we will not renew Webex.” That kind of firmness can sometimes spur a last-minute aggressive counteroffer from Cisco. They might, for instance, offer a 1-year free Webex extension to give you time (hoping you reconsider). Weigh such offers carefully – “free” can be good, but not if it keeps you from a better strategic solution.
- Unwind Bloated Agreements Gradually: If you have a very bloated Cisco agreement but can’t rip the band-aid off all at once (maybe you aren’t ready to replace everything), consider a phased approach. Perhaps renew core parts for longer (that you know you’ll keep using) and only renew others short-term while you complete rollouts of alternatives. Cisco might present an “all or nothing” attitude, but if you show a roadmap (e.g., “Year 1 we drop X, Year 2 we drop Y”), they may try to accommodate keeping you as a customer in some areas rather than losing all. You could even ask Cisco if they have a migration credit program – sometimes, if you drop one product in favor of another Cisco product, they’ll credit part of the unused term. Unwinding doesn’t always mean going to another vendor; it could mean consolidating within Cisco. For example, if you had two security products that overlap, you might drop one and keep the other, and Cisco might let you apply the remaining value to the one you keep.
- Document Lessons Learned: After a renewal, do a retrospective. Where did shelfware come from? Was it overestimation, project cancellations, or user adoption issues? Feed those lessons into future negotiations so you don’t repeat them. If you let it, Cisco will happily sell you 20% more than you need every time. Instead, after each term, tighten your requirements and get leaner.
Renewal is your chance to correct the course and avoid the compound effect of over-licensing. Think of it as pruning a tree – cut the dead wood so new healthy growth (i.e., efficient spending) can occur.
Cisco will try to water the whole garden (renew everything), but you decide where to focus resources. By being proactive and strategic at renewal, you turn what could be an automatic cost increase into an opportunity to optimize and save.
Strategies to Simplify and Optimize Cisco Spend
Large Cisco environments can become unwieldy, with overlapping products, complex bundles, and myriad SKUs. Simplification not only saves money, it also strengthens your negotiating position (simplicity = clarity = leverage).
Here are strategies to streamline:
- Eliminate Overlapping Technologies: Cisco’s product portfolio has overlaps, especially after many acquisitions. You might have multiple Cisco tools that are doing similar jobs. For example, if you have Cisco Umbrella for DNS-layer security and a Cisco Secure Web Gateway solution, do you need both, or could one suffice? Or maybe you’re using Cisco Meraki SD-WAN on some sites and Cisco Viptela SD-WAN on others. Standardizing on one can reduce licensing and support costs (and internal training costs). Audit your stack for such overlaps. Pick the best solution and plan to decommission the other where you find them. Not only will this cut the licenses, it reduces complexity in negotiation (one less product to discuss). Cisco won’t usually volunteer to remove a product, especially if it means less revenue for them, so it’s on you to identify it and push for removal. Make the case that simplifying will improve your operations – it’s hard for Cisco to argue against technical sanity, and they might offer a deal to migrate you fully onto one of the overlapping solutions (especially if it means you stay all-Cisco rather than introducing a third party).
- Break Up Big Bundles Internally: This is more about how you approach budgeting. Instead of just renewing or buying “Cisco Enterprise Agreement: All The Things,” break that into components aligned to internal owners or functions. This way, each piece gets scrutinized by the respective stakeholders. For example, the network team looks at DNA licenses, the security team looks at security subscriptions, etc. They might find items to drop that a consolidated bundle view would miss. Then, when negotiating, you can focus on the critical pieces and let go of the rest. Don’t buy a bundle just because it’s there – assemble your own “bundle” of needed items. If you drop certain pieces (no bundle discount), Cisco may charge more, but that can still be cheaper than paying for things you never use. If Cisco’s bundle is truly all that is needed, you can keep it, but validate that.
- Minimize SKU Proliferation: Cisco is notorious for having many SKUs for slight variations (different support levels, different feature add-ons). Over time, you might accumulate a hodgepodge of SKUs. Standardize where possible:
- Use the same support level across similar gear (maybe you don’t need premium 24×7 on every access switch—could some be 8×5 NBD?).If you have redundant appliances, maybe only one needs the advanced analytics license instead of both. Align subscription terms so they co-terminate – it’s easier to negotiate one renewal than many scattered ones. If you have Cisco hardware with optional software modules (like Cisco Prime Infrastructure vs DNA Center), pick one management platform and drop the other’s licenses. Remove legacy SKUs: Perhaps you still pay for a Cisco ASA content filter license even though you moved to a next-gen firewall – time to kill that SKU.
- Assess Third-Party vs Cisco Features: Cisco often charges for features that could be obtained via third-party integrations or open source. For instance, Cisco DNA Advantage might include telemetry and analytics, but you may already use Splunk or another tool for network analytics. If you aren’t going to use Cisco’s version, don’t pay for that tier of license. Another example: Cisco’s Webex enterprise agreements might include some level of adoption consulting or training services baked in – if you don’t use them, see if that can be removed or if it’s just “free” (nothing is truly free – you paid in the bundle price). By knowing where you rely on third-party solutions, you can avoid double-paying Cisco for similar functionality.
- Rationalize Collaboration Licensing: Collaboration is an area where simplification can save a lot. Cisco historically had multiple licensing schemes (UCL, UWL, Flex, etc.). If you have older perpetual licenses for Unified Communications Manager and also some newer subscriptions, consider moving entirely to one model. Or if you have separate agreements for Webex Meetings and on-prem Call Manager, see if consolidating into one Flex Plan subscription for all would be cheaper or vice versa. But be wary of Cisco pushing “all Webex Suite EA” if you don’t need it. Your usage should drive simplification. It might even mean moving some users off of Cisco to other platforms if that simplifies your environment (e.g., small branch offices use a cloud PBX instead of Cisco – you don’t need to license them on Cisco at all).
- Optimize Network Hardware Lifecycle: Cisco licensing and spending can be reduced by not overbuying hardware performance you don’t need. For instance, a common trap is buying a higher-tier switch model to “be safe for the future, ” paying for DNA Advantage, and never using the advanced features. Simplify by matching device capability to actual need and license accordingly. If half your switches only need basic functionality, you could buy them with Network Essentials (base OS) and maybe no DNA subscription if not needed or only DNA Essentials. Cisco might try to homogenize everything (all Advantage, etc.), but you can mix if you manage it. Yes, mixed environments are slightly complex, but it might be worth it if it saves a lot of money.
- Consider Independent Licensing Advisors (When Needed): If your Cisco environment is large and tangled, bringing in an independent expert to analyze and suggest simplifications can pay off (more on that in the next optional section). They might find overlaps or opportunities you missed. They can also run benchmarks to see if you’re overspending in certain areas relative to peers.
- Negotiate Simpler Deals: When talking with Cisco, explicitly state you want a “simple, transparent deal.” Sometimes Cisco will respond positively – they know their pricing can be convoluted. Ask for a deal constructed in plain terms: e.g., “We want DNA Essentials for 100 switches and DNA Advantage for 50 switches, and nothing more – price it accordingly with support. No weird bundles, please.” Call it out if you sense Cisco is padding the deal with extras. The more straightforward the deal, the easier it is to evaluate and hold Cisco accountable.
By simplifying your Cisco footprint, you achieve two things: you reduce waste (direct cost savings), and you put yourself in a stronger position for future negotiations (since you have a tighter grasp on what you use and need). Complexity is the seller’s ally (it’s easier to hide costs); simplicity is the ally of the buyer (easier to spot and cut unnecessary costs).
When (and How) to Use Independent Cisco Licensing Advisors (Optional)
Negotiating with Cisco can be a high-stakes, detailed endeavor. Independent advisors or consultants can provide a significant edge for very large Cisco customers or particularly complex environments.
Engaging one is optional but worthwhile in scenarios such as negotiating a multi-million dollar EA, facing a difficult compliance situation, or attempting a major cost reduction initiative.
- When to Consider an Advisor: If your Cisco annual spend is substantial (seven figures or more), the savings from expert negotiation can easily outweigh the consulting fees. Also, if your team doesn’t have deep experience with Cisco’s latest licensing programs (they evolve frequently) or if you feel Cisco “has the upper hand” in knowledge, an advisor brings that balance. For example, maybe this is your first Cisco Enterprise Agreement – advisors who do this for a living have seen dozens and can tell you where others got better terms. Another case is if you’re planning a competitive bid – an advisor might know how Cisco typically counters certain competitor quotes and prepare you for that.
- What Licensing Advisors Do: They will typically dive deep into your contracts, usage, and Cisco proposals. They’ll identify hidden costs, over-licensing, and benchmark your discounts. Advisors often have data from other deals (anonymized) to know, for instance, what discount range Cisco usually gives on a Catalyst switch or a Webex EA for X thousand users. This information asymmetry is golden – Cisco knows the range, but you usually don’t. An advisor can tell you, “Cisco gave a 75% discount to a similar client; you’re currently at 60%, so there’s room to push.” They also can draft or suggest negotiation language for you and flag problematic clauses (they might say, “Clause Y in Cisco’s terms is dangerous; negotiate it out – we’ve seen it cause issues”). Essentially, they act as your behind-the-scenes coach or proxy negotiator.
- How to Use an Advisor Effectively: Be clear on objectives – cost savings, contract flexibility, risk reduction, etc. Provide them with all relevant info (NDAs can be signed): Cisco quotes, current entitlements, etc. Let them analyze and come back with a strategy. You can choose whether the advisor is in the front lines (some companies let the advisor directly handle discussions with Cisco alongside them) or strictly background (feeding your team info to use). Cisco’s reaction to advisors can vary – some Cisco reps get defensive if they know a consultant is involved, fearing tougher negotiations. However, don’t let that dissuade you; just manage perception. You can keep the advisor’s role low-key, with them perhaps present as a “consultant” on your side without emphasizing their purpose, or use their guidance internally.
- Advisor Compensation Models: Be aware that some work on fixed fees, and others work on a success basis (a percentage of savings). Success fees can motivate them to cut costs but ensure they don’t lead to an adversarial atmosphere that harms the relationship. A reasonable advisor will aim for a win-win deal while maximizing your savings. If paying a percentage of savings, define how savings are measured (versus Cisco initial quote, budget, etc.) and cap if needed.
- Benefits vs. DIY: Why not just DIY with your team? You absolutely can for many situations. The advisor brings specialized experience – think of it like hiring a lawyer for a complex case instead of representing yourself. You might win independently, but the expert increases the odds and can speed up the process. Also, internal teams might have other duties; an advisor lives and breathes the negotiation until it’s done, which can help if you’re on a tight timeline.
- Cisco’s Partner vs Independent Advisors: Note that your Cisco reseller might offer “help” in analyzing your licensing. Remember, the reseller wants to sell you more Cisco (they are not truly independent). They may help with technical sizing, but they are unlikely to aggressively find ways for you to buy less. Independent advisors work for you alone, with no incentive to maintain Cisco’s revenue. That difference matters.
- Examples of Advisor Impact: Perhaps an advisor finds that Cisco’s proposed user count in an EA was inflated by including contractors – removing them saves 10%. Or they discover that Cisco quietly removed a 20% multi-year discount in the draft contract in the quote – something you might miss. Or, simply, they know end-of-year Cisco can approve an extra 5% discount if asked a certain way – so you ask and get it, whereas you wouldn’t have known to ask.
In conclusion, while not every organization needs an independent licensing advisor, they can be a powerful tool in the CIO’s toolkit for major negotiations. At the very least, consider a one-time consultation for sanity check on Cisco deals above a certain size. It can validate your strategy or uncover new opportunities to save.
The goal is to ensure that no money is left on the table and no traps remain hidden. An advisor’s insider knowledge on Cisco can be the difference between an average deal and a great deal.
Final Thoughts: Negotiating with Cisco requires a mix of technical understanding, market insight, and negotiation savvy.
Always remember that Cisco’s salespeople are highly trained to maximize their share – but with the strategies in this playbook, you can confidently turn the tables and secure a deal that maximizes your organization’s value.
Be direct, be data-driven, and never be afraid to challenge assumptions or “standard” terms. In the end, Cisco wants to keep your business, and you have more power than you might think to shape the agreement to your advantage. Good luck, and may your next Cisco negotiation be the best one yet.
