When Cisco CEO Chuck Robbins told investors the campus and data centre refresh is at “the top of the first inning” of a multi-year, multibillion-dollar opportunity, it raised an obvious question for Canadian partners: what does that inning look like here?

Erin Gertner, vice president of the Partner Organization and SMB Sales at Cisco Canada, says Canada is tracking with the global trend – and that the opportunity is being driven by a “perfect storm” of three converging forces: the largest last-day-of-support (LDOS) wave Cisco has seen in years, growing urgency around AI readiness, and increasing pressure around data sovereignty.

The AI readiness gap is particularly striking. Only 7% of Canadian organizations say they’re fully prepared to deploy AI – down from 9% the previous year – while 96% say the urgency has increased. That tension is creating real opportunities for partners who can lead with outcomes rather than product.

Gertner says the partners winning the biggest deals are those taking a consultative approach – running assessments, broadening the conversation beyond a like-for-like swap, and helping customers understand their full security and AI readiness posture. In one example, a security assessment nearly quadrupled the deal size compared to a straight hardware refresh.

The conversation also touches on where vertical demand is hottest (financial services and healthcare are leading), how the Secure AI Factory with NVIDIA translates for mid-market partners, the role of data sovereignty in driving on-prem modernization, and what smaller MSPs should be doing to get in the game. Gertner’s advice to partners who haven’t started? Reach out to your Cisco partner account manager or distributor and get access to the PXP data – the opportunity is there, and Cisco wants to make it easy to find.

Robert Dutt: Hello and welcome to In The Channel from ChannelBuzz.ca, bringing news and information to the Canadian IT channel community for the last 16 years. I’m Robert Dutt, editor of ChannelBuzz.ca, and as always, your host for the show.

On Cisco’s most recent earnings call, CEO Chuck Robbins called the campus and data centre refresh the top of the first inning of a multi-year, multi-billion dollar opportunity. Double-digit growth in networking, six consecutive quarters. But that’s the global picture. What does the first inning look like in Canada?

My guest today is Erin Gertner, VP of the Partner Organization and SMB Sales for Cisco Canada. Erin sees what she calls a “perfect storm” converging right now – a massive wave of aging infrastructure hitting last day of support, growing urgency around AI readiness, and increasing pressure around data sovereignty. We get into what Cisco Canada is seeing on the ground, where partners are finding the most traction, and what separates the ones winning those deals from the ones leaving the door open for somebody else.

Let’s get right into it. My chat with Erin Gertner.

Erin, thanks for taking the time. I appreciate it.

Erin Gertner: Thank you so much, and thank you for having me, Robert. It’s nice to see you.

Robert Dutt: Nice to see you as well. It’s been a little while since Partner Summit when last we sat down, but I wanted to chat because of Chuck’s comments on the earnings call, talking about the top of the first inning on a multi-year, multi-billion dollar opportunity around campus refresh. Double-digit growth in networking for six consecutive quarters. That’s the global picture. I guess to throw it open, what does that top of the first inning look like from where Cisco Canada sits? Are we tracking with the US on this one? Are we still back in spring training? What does the Canadian opportunity look like in this moment?

Erin Gertner: I think we’re seeing something very similar to what Chuck spoke about on the earnings call. We are seeing a multi-year, multi-billion dollar refresh cycle taking place here in Canada. And I think it is the perfect storm of three things coming together.

One, we have a lot of aged infrastructure out there. Sometimes we call it last day of support, or LDOS. When we look in our portfolio, we’ve got the largest LDOS opportunity that we’ve had in many, many years this year and next year. We’ve been working with many of our partners as well as our account teams to start going out and pursuing those opportunities because we really do need to get in front of them.

But we’re also seeing the dynamics of a few other things taking place. One is AI readiness. I think you probably heard in our earnings call, Chuck talk about the success that we’re having in AI. A lot of that today is really centred in the world of the hyperscalers. In our last earnings call, I talked about doing over $2 billion worth of infrastructure with the hyperscalers. So there’s this huge influx of demand around AI. But where we haven’t really scratched the surface is AI in the enterprise. The hyperscalers are very well prepared, but now we’re starting to see this big wave of enterprise deployment, or at least enterprises thinking about the use cases and the ROI, because it is a board-level conversation.

And then lastly, and this is probably a topic you hear a lot about working in Canada, is around digital resilience and data sovereignty. You need a modernized, secure network in order to deploy AI, and the network is more critical than it’s ever been as you think about the role it’s going to play in the next few years. The ability to fuse together security into the network is really unique and core for Cisco and driving refresh.

I often talk to partners about the LDOS opportunity, and we used to get the question a lot of, “Why would a customer upgrade?” or, “How do I have this conversation with a customer?” because their response is often, “It all still works. Why bother?” I think AI especially is really giving them that reason to modernize, because while their network may work, it wasn’t necessarily built to run the applications that they’re going to need today and in the future. So it’s a really compelling conversation, and we’re seeing huge uptake and demand in networking.

Robert Dutt: You touch on the customer size, especially on the AI side of things. Looking across the Canadian market in terms of customer size, vertical, geography – is the refresh opportunity relatively evenly distributed, or is it concentrated? Where’s the heat at right now?

Erin Gertner: It’s been interesting. All of our account teams, some of which are verticalized, others which are organized geographically, talk a lot about where they’re seeing refresh opportunity.

A great example is what we’re hearing from financial services organizations. We had that long period of COVID, and then there’s been a ton of conversation around return to office. Our financial services team will tell you that there’s massive demand because if you listen to what the banks or insurance companies are doing, they’re asking people to come back to the office. Those networks, many of which were built in 2018 or 2019, can’t support the applications that are being driven in today’s world. They can’t even support the number of people they have anymore. [A lot of those organizations saw a boom.]

So there’s a huge network refresh taking place right now in that specific vertical. We’re also hearing a lot about mission-critical verticals like healthcare, where uptime is hugely important and security and resilience are top of mind. But it’s really spread throughout. Many companies had a long period of time where they spent a good majority of their budget on work from home and getting people set up for different use cases. Now that we’re living in this hybrid world, or a lot of organizations are back to work, that’s putting a huge change in demand on what is being asked from the network, plus everything that’s happened from the AI perspective.

Robert Dutt: You bring in a lot of different threads in terms of things that are driving this – AI readiness at the top of the list, aging infrastructure, data sovereignty, security modernization, probably a few more. What’s actually leading the charge in this moment for the conversations you’re having with Canadian partners and customers? I’m curious if one of those things is the leader and the others follow, or if there’s really a convergence where this is a big pile of conversation topics at the same time.

Erin Gertner: I think it’s a big pile of conversation topics at the same time, and it also depends on the partner you talk to and how they’re approaching a customer. Every partner has got a really interesting and different approach, especially when it comes to AI, and I love that about our partner community.

A lot of them are taking, for example, an advisory services-led approach, or they’re taking the approach of – I hate this expression, but it’s one that makes sense – eating your own dog food. I was with a partner last week and they were talking about a lot of the work that they had done to embed AI into their own workflows. Then they were taking their success out into the market and starting new conversations with customers they hadn’t historically had access to. All of that was leading to a network refresh conversation, because customers are excited about the opportunity with AI, and then the partner was able to embed the question around, “Well, are you ready? Do you have the right infrastructure in place?”

The conversation often is bigger than that, and obviously security is a huge area of concern when it comes to AI. I think that’s where Cisco is very uniquely positioned to win in this space. We’re seeing a lot of our competitors try to bring network and security together, and we’re really the only organization who can truly embed network and security together and then traverse it from the campus to the data centre.

Robert Dutt: To your point on dog food, I learned from a partner years ago that the way to phrase it is “drinking one’s own champagne.”

Erin Gertner: Oh, I like that expression a lot better. Thank you for that.

Robert Dutt: Let’s talk about the AI side of things. Cisco’s own AI Readiness Index showed that 7% of Canadian organizations feel they’re fully prepared to deploy AI, and that’s actually down a couple of points from 9% in 2024. 96% say it’s more urgent than ever. That’s a pretty big gap. How’s that tension showing up in the conversations that partners are having with their customers?

Erin Gertner: I’ve spoken to a lot of partners in the last little while, and again, each are taking a very individual approach. I think leading with outcomes and that consultative mindset – and it looks very different for each partner – but they’re all trying to understand what outcome a customer is trying to deliver, or what is the ROI, or what is that metric that’s going to help move a CEO’s agenda forward, or help them understand how they can build a true business case to build out a full AI deployment.

It’s hard, right? We’re going through our own transformation at Cisco. We’ve got a team of individuals who work with us internally building out our AI workflows, and even on my own team, we’re trying to do all these things to help our team adopt AI tools to make their lives easier and more efficient. You often hear that somebody’s job is not going to be taken by AI – it’ll be taken by somebody who knows how to use AI. It is even more critical than ever that organizations figure it out.

A lot of our partners have deployed some interesting things for themselves or worked through really interesting consulting engagements where they have use cases they can take out to market and help customers build that business case for themselves. They need to start small, they need to define what success looks like, and I think many customers have a long road there, but there’s certainly hope that we’re headed in the right direction.

Robert Dutt: Raj, the president of Cisco Canada, wrote an op-ed recently saying that Canadian businesses risk – I think the quote was – “Blockbuster-style failure” without having the right AI infrastructure. For a partner who’s sitting across the table from a customer who feels that urgency but hasn’t really started yet, what do you counsel that partner to advise the customer on? What’s the practical starting point? Where do you begin?

Erin Gertner: It’s tough. Again, it depends what type of customer they are and what their use case looks like. But I think for that customer, it’s really leaning back to outcomes – what is going to demonstrate success for that organization? The last thing you want anybody to do is go out and deploy an AI application and see absolutely no success out of it. That will move that executive’s agenda back probably a couple of years.

But we are also really encouraging partners to talk through: Are they ready? You can have the best use case out there, but do you have a good data strategy? Do you have a good security strategy? Have you thought about modernizing your network? Is sovereignty important to you? And if it is, do you want to start thinking about potentially building that on-prem, or taking a different approach than maybe what you have historically done, because there are new considerations being layered on top of all of that.

Robert Dutt: Talk to me about the Secure AI Factory side of things. Tim Coogan called it the partner opportunity of this year. I’m curious how that translates practically for Canadian partners. Is this a play mostly for the big SIs, or are you finding mid-market partners who are finding a role in the AI infrastructure buildout?

Erin Gertner: I think it’s a little bit of both. We’re having conversations around Secure AI Factory with some of our largest partners because it is really unique. Our relationship with NVIDIA is truly one of a kind, and we’re actually creating products together. I know everybody has done a great job of partnering with NVIDIA in the market, but our relationship with them is a little bit different.

What I love about the whole notion of Secure AI Factory is the fact that it’s everything built together. We make it really easy. We’ve pre-built all the CVDs. We’ve essentially created a blueprint for partners and customers to go out and deploy an entire AI pod. That includes everything from networking to servers to security to observability. We can even include storage, even though we don’t make it – we’ve got a bunch of great storage partners.

Is it going to work for a small customer being serviced by a small partner? Probably not. It might be outside the scope of what they’re doing. But for mid-sized customers who are running interesting workloads and they want them on-prem, and especially for bigger customers who want to scale and deploy really quickly, or partners who have a ton of depth and capability in that space, the Secure AI Factory is a great solution.

Robert Dutt: For a Canadian partner who’s looking at this refresh opportunity, where are you seeing the most traction in terms of the technology stack? Is it campus switching, data centre modernization, Wi-Fi, security? What’s the entry point that’s helping partners produce pipeline right now?

Erin Gertner: We’ve done a lot of work with partners. We’ve got a tool called PXP – I think you’ve probably had some exposure to it – but we’ve been doing quite a few workshops with our partners to help them understand where their opportunity is. PXP does a great job of being very data-rich and data-centric. As we go through the enablement with partners, it gives them a good sense of what their refresh opportunity looks like.

Then we are trying to make sure we enable them around the broader conversation. You don’t want to just be refreshing a switch for a switch. Our best partners are taking that data and – again, to your question, some partners, let’s say their history was really in the data centre – data centre networking is probably their biggest opportunity because that’s where they’ve sold the most in the past. For more broad-scale partners, it could be a combination of two or three different things.

What we’re really trying to coach them to do is take that opportunity and don’t refresh a switch for a switch. Help the customer understand what outcome they’re trying to achieve. Do they have the right security posture? What’s their Wi-Fi strategy? What’s their device strategy? We’re trying to help them take that data and broaden the conversation into something that’s more outcome-driven. Our best partners are doing an excellent job of that and building really big, interesting deals alongside their customers.

Robert Dutt: In doing that, when you’re looking at the services layer, are there any particular areas that you find are especially productive? Assessments, design, migration, managed services post-deployment – where are partners getting the most return from focusing their energy?

Erin Gertner: Consulting services has been a huge one. We’ve got a great assessment program and we have some partners who are doing a great job leveraging it and seeing a ton of success. I was in a partner QBR the other day and they were giving an example of having done a security assessment with a customer that significantly broadened the scope of the deal and helped the customer understand where they had some vulnerabilities in their current infrastructure. That deal almost quadrupled in size. Partners are doing a great job with that.

What we’re really trying to encourage partners to do is make sure we’ve got an adoption plan for every software deal out there upfront, because we want to make sure anything our customers buy from our partners, they have a great experience with. If they aren’t doing a good job of adopting that and showing value all the way throughout the chain, we’re not going to see a renewal at the end.

The other thing we’ve been talking a lot about with our leadership team is some of what’s happening in the industry right now with some of the shortages that are industry-wide. In COVID, we saw something similar happen – a lot of supply chain constraints. Then there was this really long ingest period that happened afterwards because customers just had so much technology. We are really encouraging our partners and our teams to make sure we’re leading with services, so there is an outcome attached to the end and there is a plan with the customer to consume the technology so they can get the most out of what they’ve bought from us.

Robert Dutt: We talked a little bit about the big guys, the SIs, and the opportunity around AI Factory. For the smaller partner, that long-tail 15-to-20-person MSP that’s living in Meraki and maybe doing some security, is this a real opportunity for them, or is this fundamentally a larger VAR and SI play? Where it is accessible to that SMB-focused partner, what does the on-ramp look like?

Erin Gertner: It’s absolutely accessible for that SMB partner. I also have the SMB part of our business, so this conversation is very close to my heart.

Given the IT skills shortage that is very dominant in the Canadian market, we are seeing a lot of customers who don’t want to manage their own network. As customers grow – let’s say they were a very small customer four or five years ago and they chose more of a consumer-grade solution at that time – as they want to move into a more enterprise-type solution with security and all the other bells and whistles embedded in it, a lot of those customers are choosing not to manage that themselves. But they want to be in the same place as their competitors, because the expectation is they grow and scale just as fast, probably faster in fact, as a big company.

A lot of those companies are born in the cloud, leveraging tons of cloud applications, so the way they create their foundation is even more critical than ever. We have a bunch of great small to mid-size partners who are doing awesome things in that space and growing pretty significantly, actually gaining a lot of market share because of their agility and their ability to manage something at a cost-effective price.

Robert Dutt: You mentioned the importance of data sovereignty in the conversation. The federal government has launched a call for proposals for sovereign AI data centres of over 100 megawatts, and we’ve seen Cohere get a lot of federal backing for their data centre build. Is data sovereignty a driver in this enterprise refresh, or is it a parallel conversation that’s happening at the same time?

Erin Gertner: I think it’s a bit of a parallel conversation, but it’s certainly driving a huge – not even refresh – just huge modernization effort. A lot of it is centred around Canadian organizations who are worried about data sovereignty, or who are worried that sovereignty requirements might hit them in the next few years. They’re trying to prepare themselves by building out new types of data centres on-premise – new data centres to support applications coming back on-prem.

While maybe they haven’t built everything on-prem today, we are seeing a massive surge in companies starting to think about what that might look like. For customers who had almost all of their applications in the cloud previously, their data centre network didn’t necessarily support the low-latency, really high-bandwidth requirements that would come into play if they start putting mission-critical applications back on-prem.

We are seeing a lot of customers starting to think about what they would need to build to support sovereignty requirements, or if they’re going to continue to live in a hybrid world – which, let’s be honest, the majority of Canadian organizations are probably going to live in that world, and that’s all good – the network they have today probably doesn’t support that in the way they’d like either.

Robert Dutt: Let’s talk about what you’re doing to support partners through this process. What are the incentives, enablement resources, the programs that are particularly relevant to Canadian partners who are looking at this opportunity and going after it?

Erin Gertner: I think we’ve been pretty declarative about wanting to be the critical infrastructure for the AI era. We’re doing a lot of enablement with our partners. We’ve aligned our incentives, both front-end and back-end, to this opportunity. We’re doing a lot of workshops to help our partners understand where those opportunities lie and help them understand how to go out and capture them.

We’ve also been running a lot of demand generation alongside our partners around our AI strategy, what that looks like, as well as showcasing the innovation that Jeetu has put forward in our portfolio around network and security coming together, because I do think it’s a great story and one that maybe not everybody knew. Some people probably think we’ve still got two different platforms with Catalyst and Meraki, where the truth is those have come together in the last year.

With our acquisition of Splunk, there’s a lot that’s been infused into the network. Jeetu has also done a fantastic job of creating a really innovative security portfolio, a lot of which is actually embedded into the network layer. So there’s been a lot of education that we’ve had to do with both our partners and our customers to make sure they’re able to go out and tell that story to the market. I think Tim Coogan said this best – our job is to create that innovation, and then our job is also to help enable our partners to go out and be an extension of our sales force and help them deliver value to customers based on that innovation.

Robert Dutt: What do you see as separating the partners who are winning these refresh deals from those who aren’t? What are the best partners doing differently?

Erin Gertner: Again, I think really leading with that outcomes-based conversation and not just doing a like-for-like refresh. The ones who are going out and really taking a consultative approach, they’re winning a lot more and they’re winning much larger deals. I was on with a partner yesterday who was showcasing some of the work they’d been doing around AI and sharing with us some of the success they had just recently had, and they’re winning amazing deals by taking a very consulting-led approach.

What we have seen in the past from certain partners is they go in and focus very much on that refresh opportunity, and then they almost leave the door open for another partner to come in and have a conversation around networking, observability, and all the other aspects around that critical infrastructure. So the best partners are the ones who are leading with the whole portfolio.

I know we’re going to talk about 360 as well, but we’re really trying to incentivize our partners to build a lot of skills and technical depth around our solutions, and the ones who are really good at being able to tell the story of how our whole portfolio comes together – that “One Cisco” story that we often talk about – they’re the ones who are winning the most.

Robert Dutt: If I’m a Canadian partner listening to this and I haven’t really started leaning into that refresh opportunity yet, what should I be doing about this on Monday morning when I show up to work? And looking further out, we’re in the top of the first – what do you see the second and third innings looking like here in Canada?

Erin Gertner: Firstly, reach out to us. However you engage with Cisco, whether it’s through one of our distributors – who are amazing and have access to all of our tools – or reach out to your partner account manager at Cisco. We can provide all the training required on how to have the right conversation, as well as access to all the data you need to help you figure out where you should start and which customers are due for a refresh or have a refresh opportunity in the next six months. We can make it really easy for our partners to know where to spend their time and get a pretty fruitful payoff, both on the front-end and the back-end with us.

What do I think the second and third innings might look like? I think we’re still really at the infancy of that. We’ve seen a few customers go down the refresh path – probably our largest customers have gone down the refresh path. Some of them have modernized networks or they’ve gotten to where they think they need to be to support AI applications. But I do think we’re going to see some of our smaller customers start to catch up.

I also think we’re still really at the infancy of the success of AI. We talk a lot about the role of agentic AI and how that’s going to proliferate through organizations in the future. I don’t know that many customers have figured that out yet today. There are some who are really at the edge of innovation and who’ve done an amazing job with that, but it isn’t mainstreamed yet. As agentic AI really starts to roll out, the demands on your network and the demands around security especially become even more complex and even more critical.

I think that’s going to be the next wave. A lot of companies have done a good job of finding one or two use cases, maybe small ones, that have delivered value for them in AI. But there are very few organizations – and we talked about it through the AI Readiness Index – very few organizations who have really found tremendous value from AI today, but they will in the future.

Robert Dutt: I think you’ve done a great job of setting up the game for Canadian partners here. Good luck with the rest of the ballgame, and thanks so much for taking the time.

Erin Gertner: Thank you.

Robert Dutt: There you have it, Erin Gertner from Cisco Canada. I’d like to thank Erin for her time on this one, and thank you for listening.

A couple of things that stood out to me. First, how strongly the consulting and assessment-led approach is paying off. Partners who are going in and helping customers understand the full picture – security, AI readiness, network modernization – aren’t just winning deals. They’re winning deals that are three and four times the size of a like-for-like refresh. And the other is something Erin said that I think is worth sitting with: there’s no AI without a network. Simple statement, but it reframes the entire refresh conversation for partners who aren’t sure where AI fits into what they do.

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Till next time, I’m Robert Dutt for ChannelBuzz.ca, and I’ll see you in the channel.