Ericsson’s new CEO is “drinking through a firehose”, while Cisco’s CEO admitted employees are working “round the clock” to make the two vendors’ nascent partnership a success, discussions at Mobile World Congress have revealed.
It was less than 18 months ago that the two companies announced a tie-up that promised to deliver $1 billion in new revenues by 2018.
Much has happened since.
Cisco acquired Jasper Technologies to muddy the IoT waters and announced plans to cut up to 5,500 jobs, while Ericsson dispensed with the services of Hans Vestberg, its CEO who headed up the tie-up with its rival, and was forced into an uncharacteristic profit warning.
Despite all this, things appear to be ticking along.
The two firms said they have had 300 “engagements” and signed 100 deals.
One more was on show at MWC this week – Iraq’s Korek Telecom signed on the dotted line for an IP core network project that features Ericsson’s services organisation and Cisco’s ASR 9000 routers.
On the product side, the two companies unveiled a unified communications offering that combines Cisco’s enterprise collaboration service platform with Ericsson’s VoLTE solutions.
At Cisco’s MWC press conference, CEO Chuck Robbins (above, left) talked up the progress the two companies have made “at a time when there has obviously been a lot of change and uncertainty”.
He added: “Our customers have reiterated their desire for us to continue to make the partnership work for them.
“Our teams continue to work, frankly around the clock right now, to make sure we have everything we can put into the partnership to create success and [to work out] how we get anything that is keeping us from being successful out of the partnership.”
One of his key tasks is getting to know his new opposite number.
Börje Ekholm (above, right) took the Ericsson reins in January and said at his company’s MWC press conference that he was a “rookie”.
Yet this is the man who has been on the vendor’s board of directors since 2006.
Robbins said he had met Ekholm for the first time at the CES show in January.
“The commitment we made was that we believed in the fundamental tenants that led us to the partnership in the first place and that we were committed to re-energising it and trying to ensure that we did everything we could to actually accelerate it,” Robbins said.
He said he was seeing Ekholm twice at MWC.
Such face time is key, according to Rima Qureshi, the CEO of Ericsson’s business in the US with an oversight role of the Cisco partnership.
In her former Chief Strategy Officer role, Qureshi negotiated the deal back in 2015.
“[Ekholm] is drinking through a firehose right now, trying to learn everything that Ericsson does,” she told European Communications at the Barcelona event.
“He’s doing the same thing on partnership side too.
“The best way for him to know what needs to be done is to get the know the people on the Cisco side.”
The $1 billion revenue target still stands, Qureshi said, as does the “ultimate vision”.
This is despite continued uncertainty over where Cisco and Ericsson compete and where they don’t.
“In some cases [portfolio overlap] has caused confusion with operators – are we bidding separately or jointly?” Qureshi said.
Then there is the regulatory aspect, which requires the two companies to bid separately where they have too much market share.
“We have to manage legal position,” Qureshi said.
There is also the culture clash.
“There is sometimes a bit of my product is better than your product and we have to work through that,” according to Qureshi.
Ultimately, she says it’s “not always easy to give a straight answer” to customers on when they will be bidding jointly and separately.
This cannot be good for the present nor the long-term future of the partnership.
Yet even with hindsight Qureshi is convinced the decision made back in 2015 was the right one.
“I fundamentally believe more partnerships are required in the industry,” she said.
“The ecosystem requires us to work in a partnership model, we can’t acquire everything.”
In short, she says Ericsson and Cisco “have to learn to work this way”.
Whether operators agree remains to be seen.
Asked what her message to operators is, she said: “We’re committed and working through the challenges.
“Our objective is to look at the requirements of customers and choose the solution that best meets their needs.”