There’s been much said about Cisco’s intensified competition and its play for partner loyalty. Reflecting on Cisco’s partner summit, John Chambers emphasized the event is high priority as he guides Cisco through its transition from a direct company to a partner–led direct touch company.

While Cisco works to get closer to its partners and build trust, it’s interesting to note Microsoft is working on getting closer to its customers. It will be rebranding the partner program “Microsoft Partner Network” to market partner value, and no doubt sell customers on partner quality. 

While the new program will tout the value of partner’s designation (Registered, Certified, Gold), it will distinguish those with the best technical credentials and attempt to help them in realizing return on their investments.  Microsoft needs its VARs to deliver more complete solutions and is encouraging them to leverage not only their expertise but the partner ecosystem via its new program. More details will be available at the Microsoft Partner conference in July.

In the meantime, VARs need help with cash flow and have made it known to their manufacturers.  Cisco responded last week, extending 90-day terms to more partners. On the other hand, Microsoft’s financing terms have become more restrictive.  Now Microsoft software and services must comprise at least 35% of the deal in order to qualify for financing.   By contrast, IBM requires 20% of the deal be IBM content to qualify for IBM financing.

Are these financing changes reflective of Microsoft’s own financial health? Or are they primarily designed to keep VARs focused on its solutions while preparing for the upcoming (Fall 2009) Windows 7 release? Perhaps a little of both.