Huawei CEO tries to deflect cybersecurity spotlight onto Ericsson and Cisco

It was just a matter of time before Huawei played the whataboutism card and Founder/CEO Ren Zhengfei couldn’t resist in a recent interview.

Chatting to CNN in Shenzhen Ren said the following when referring to the US ban on Huawei gear: “They have to have evidence. Everybody in the world is talking about cyber security and they are singling out Huawei. What about Ericsson, what about Cisco, don’t they have cybersecurity issues? Why has Huawei been singled out? There’s no Huawei equipment in the US networks but has that made the US networks totally safe? If not how can they tell other countries that your networks will be safe without Huawei?”

When Huawei announced its lawsuit against the US government we figured it would have a pop at Cisco sooner or later, but Ren decided to involve Ericsson for good measure (but not Nokia). He has a bit of a point, we suppose, but there are a couple of flaws in this fallacious approach. Firstly, if he thinks any other vendors might be a security risk then he is subject to the same burden of proof he is applying to the US. Secondly, even if they are dodgy that doesn’t mean Huawei isn’t.

The main theme of this resumption of the Ren roadshow was to augment the points Huawei made when in its lawsuit. Ren stressed he would rather shut the company down than let the Chinese state muck about with it and said US tactics will result in scaring away investment in the country. He also tried playing the martyr card, insisting that what doesn’t kill Huawei will make it stronger and even suggesting this aggro represents a timely wake-upcall for complacent Huawei employees.

Ren’s media tour coincides with parallel attempts to win hearts and minds among US allies, but it looks like those are being trumped by a more direct approach from the US. A recent report from Bloomberg reveals German spooks think Huawei is just too dodgy to be allowed into the country’s 5G networks.

Apparently the German intelligence officials remain unconvinced by Ren’s vows never to collaborate with the Chinese state and are also worried about upsetting the US. “It’s above all a matter of trustworthiness and of the impact on our relationship with our allies,” a Foreign Ministry official told some parliamentary committee.

On top of that the EU has recently been publicly expressing concerns about Chinese 5G kit in general so, for the time being at least, momentum seems to have swung back in US favour. Ren’s attempt to metastasise the aggro to other networking vendors must be causing some alarm, not least because it raises the prospect of them being caught in the orbit of the law suit. If we’re on a Huawei to hell, we’re taking you with us, seems to be the message.

 

Cisco calls for US GDPR rollout

In a move which might make the networking giant quite unpopular on the US side of the pond, Cisco’s Chief Legal and Compliance Officer Mark Chandler has called for a US version of GDPR.

Having been implemented during May 2018, Europe’s General Data Protection Regulation (GDPR) is starting to make waves in the technology world. The first complaints were filed as the ink was drying on May 25, though with the first rulings started to be announced eight months later, the implications and dangers are starting to become clear. Unless Silicon Valley wins the opening legal skirmishes, precedent will be set and disruption to the data sharing economy will be very apparent.

Considering the massive potential for disruption in the digital ecosystem, Chandler will not be making any friends in Silicon Valley by pushing the case for more focused protections on data protection and privacy. Commenting to the Financial Times, Chandler stated he believes the new regulations have worked out well and after some tweaking, the same rules should be applied in the US as well.

Of course, a legal executive from a networking company stirring the pot is unlikely to turn heads right now, the rules would not necessarily have any monumental impact on the networking infrastructure giant, but there might be a few upset individuals in Silicon Valley. For years, the internet players have effectively been able to do what they want, but GDPR sought to end this reign of freedom.

Although GDPR is an incredibly complex set of rules with more nuances than a teenage philosophers diary, the overall aim is pretty simple. Firstly, the user has more control over his/her personal data, and secondly, internet companies have to demonstrate a need to collect and process data, while also improving securities around these processes. And of course, there are the fines as well.

This is perhaps one of the biggest concerns of the internet giants as they can now be held accountable. Prior to GDPR, fines were feeble. For any normal company, they would be horrid, but considering the size and profitability of the likes of Facebook, Google, Amazon and Apple, any punishments dished out would take a matter of minutes or hours to pay off. GDPR allows regulators to assign fines which are relative to the size of the organization, therefore companies can now be held accountable.

While GDPR does seem to be forcing many companies to act more responsibly, the saving grace for Silicon Valley is that it is limited to Europe. The lobbyists will be fighting hard to make sure such rules do not find sympathetic ears in Washington DC, though governments do seem to be welcoming.

In India, the government is considering new rules which would tighten up protections around personal information, while the Japanese government has signed a new treaty with the European Union which extends GDPR protections of European citizens to Japan. These are two examples, though as more complaints are filed and more Judge’s opinions released to the public, interest in these rules will almost certainly increase.

What you always have to consider when you read such comments is that Cisco is a B2B firm. The privacy rules are geared towards empowering the consumer and therefore would have minimal impact here. In public, many of the internet giants are calling for a revamp of privacy rules, its just good PR form, but they will be privately terrified of a GDPR replicant.

What is also worth bearing in mind is that the US is not as sensitive to privacy issues as Europeans are. Of course, legislators will have an eye on privacy and it will be a worry, but Europe is much more aware and condemning of the slippery practises of Silicon Valley. For years, the Californian lawyers have revelled in technology outpacing regulation, identifying grey areas and loop holes galore. However, the European regulators are attempting to make life difficult.

Cisco and Huawei inch up the Interbrand top 100

Brand consultancy Interbrand has published its latest ranking of the world’s strongest brands and given Cisco and Huawei minor promotions.

In last year’s assessment Cisco had the 16th most valuable brand, while Huawei came in at number 70. In the intervening 12 months Cisco’s brand value has increased by 8% to $34.5 billion, taking it to 15th place ahead of a waning GE. Meanwhile Huawei’s brand has apparently become 14% more valuable and now contributes $7.5 billion to its success.

Huawei was so happy about this that it issued a press release. “In the next industry cycle, technologies like AI, 5G, IoT, and cloud computing will become more and more important,” said Zhang Hongxi, Huawei’s Corporate Marketing President. “Huawei delivers more value and creates a better experience for customers by integrating AI, smart devices, networks, and the cloud.” Cisco didn’t bother.

Measuring brand value must be a tricky business since brand an inherently emotive, instinctive concept. A summary of Interbrand’s methodology can be seen below. It combines financial data, which is easy to measure, with an index that claims to measure the portion of purchasing decisions attributable directly to brand and another that attempts to quantify brand loyalty.

Interbrand methodology

In essence it seems to get the raw financial data and then tweak them up or down according to how Interbrand perceives the value of the respective brands. The resulting ranking seems to correlate much more closely with market value than it does revenues or even profitability, which stands to reason since share price is heavily influenced by investor belief in the company’s ongoing performance and growth.

Once more there’s no sign of Nokia or Ericsson on the list, which makes you wonder how much of Huawei’s brand value is derived from its consumer devices business. Apple has been at the top of the list since it launched the iPhone and Google is consistently second. Amazon’s brand value has apparently increased by 56% since last year, allowing it to overtake Microsoft and Coca Cola for third place. There are no operator brands in the top 100 despite Verizon and AT&T making vast profits.

Former Cisco boss thinks tech leaders are too cocky

John Chambers, who ran Cisco for 20 years, reckons the leaders of tech companies need to dial down the arrogance a bit.

He made the comment to Yahoo Finance in the context of the tech venture capital business he started up since stepping down from Cisco. “I worry about our industry – it’s a tug-of-war between overconfidence, bordering on arrogance, among some of the leaders,” He said. “It’s hard to get that arrogance out of them.”

Chambers’ major issue with this mindset is that arrogance can prevent the people running tech startups from continuing to learn and grow, which makes them less attractive investment prospects. “For the companies I select, if they are arrogant I don’t touch it,” he said. “I have developed a criteria. If the CEO doesn’t want to be coached, if they don’t know what they don’t know, and truly if the chemistry is off, I don’t touch them.”

The VC business is called JC2 Ventures, so named because Chambers runs it with his son. Showing the kind of humility he expects of his fellow tech moguls Chambers named his son after himself and JC2 Ventures apparently has 12 companies in its investment portfolio.

Cisco investor fears of ‘melting ice cube’ are wrong – analyst

Despite reading off positive results for the last three months, it seems investors are still worried about how much influence Cisco can have in the digital economy. But investment bank Jefferies think they are all wrong.

While Cisco reported positive results in the last 24 hours, $49.3 billion for the last twelve months (a 3% year-on-year increase), George Notter, MD of the Telecom & Networking Equipment group at Jefferies, notes there are still fears from investors that Cisco will not maintain the influence is swings around today as the world transitions to the digital economy. For Notter, the business is in a solid position and will only get stronger.

“Growing economies, data growth, and the general shift to a Big Data/Analytics-driven world are big (and accelerating) drivers for the company,” said Notter. “Further, investor perceptions about the company as a “melting ice cube” fighting against workload migration, market share pressures, etc. are wrong.”

The strength of the business here is the end-to-end network capabilities, which Notter notes will become increasingly strategic to Enterprise and Service Provider customers. Notter also points to improved product orders, growth for product deferred orders and enhanced backlog. Many of the indicators are heading in the right direction.

While there is of course work to do on the transformation project at Cisco, there is evidence it is working. The team has been seeking ways to boost the recurring revenues column on the spreadsheets, with the latest results demonstrated an increase to 32% of total revenues. Admittedly this is only up from 31%, but an increase none the less.

One area which Jefferies is not as confident is on the financials. Notter and his team believe revenues will be on the up over the next twelve months, hitting $51.1 billion for FY2019, though this estimate is about $600 million below the bottom end of Cisco’s own estimates. Although Jefferies are not as confident as the Cisco management team, at least they agree revenues will be heading in the right direction.

Cisco forks out $2.35bn for Duo – the acquisition train thumps on

Cisco has announced its intent to acquire Duo Security for $2.35 billion in its quest for more subscription based deals.

Michigan-based Duo Security was founded in 2010, growing to 700 employees with offices across the US and in London. The company’s cloud-based two-factor authentication is becoming a much more common tool for employees around the world who want to access sensitive information from multiple devices, in various locations. The deal is expected to be completed in the first quarter of 2019.

Combining the words Cisco and Acquisition is not uncommon, as the business seems to believe acquisition is a much more efficient means to success than organic growth. This is the fourth acquisition to be announced by Cisco in 2018, with the company swallowing up another nine organizations across 2017 and another seven in 2016. Eleven were added to the mix in 2015.

“When we started Duo, the security industry was badly broken,” Duo CEO Dug Song wrote in a letter to employees. “Users were blamed and victims were shamed for what were really design failures in IT – or worse, vendors spent more time admiring attackers versus defeating them.

“The complexity of security products often introduced more problems than they solved, and for every dollar of product, twice as many dollars were spent on services to support them. A new philosophy and approach to security was needed; one that demonstrated respect for people, both in the design of the products and in how business is done. And so we formed Duo.”

The move itself is another step forward for Cisco which has been striving to prove its security credentials in the competitive world of cloud services. Aside from this acquisition, the networking giant has also brought OpenDNS, Sourcefire and Cloudlock into its armoury to bolster resources and offerings to customers. For the moment, the companies will continue to act as separate entities, with Song continuing as GM, though the business will fit into Cisco’s Networking and Security business led by EVP and GM David Goeckeler.

“I’m excited to welcome the Duo team to Cisco,” said Goeckeler in a blog post. “I’m even more excited about the impact as part of Cisco’s intent-based networking portfolio that Duo is going to make for customers deploying multi-cloud models.”

For Cisco, Duo fits into the intent-based networking strategy, adding another arrow to the quiver; identity and access. It does sound like a good fit for Cisco, as identity and access is becoming much more of a headache for CTOs around the world, especially considering the continuous flood of data breaches hitting the headlines. That said, acquiring Duo provides another step into the world of recurring revenues for the business, which is never a bad thing.

Cisco pledges $100 million to UK digital innovation

Cisco CEO Chuck Robbins has announced a $100 million pledge to help accelerate digital innovation, buddying the firm up to Downing Street and the governments Industrial Strategy.

Several individual initiatives will feature as part of the pledge, with the first to be an artificial intelligence research centre in partnership with University College London, focused on addressing challenges in the development of the industry, as well as fostering the relevant skills in the UK workforce.

“Technology is permeating everything we do, not only opening up new markets, but creating more opportunities for individuals, businesses, and countries,” said Robbins.

“Cisco is committed to driving innovation in the UK and to our continued partnership with the UK government through our Country Digital Acceleration programme. We believe that the UK’s expertise in AI and its commitment to making sure future innovators have the right digital skills will help ensure the nation’s citizens are well-positioned to capture the opportunity ahead.”

AI is fast becoming the most popular buzzword for 2018, and considering the glorious promises, it is far from surprising governments are hanging onto the coat-tails of the tech giants. While the UK is continuing to slip behind leaders in the digital economy, the hope is a dominant position in the AI field will reverse these fortunes. The government estimates AI could add £630 billion to the UK economy by 2035, so it is little wonder it is a priority.

The centre, which will be based on the UCL campus in central London, housing between 200-250 people including AI Master students and professors, focusing on healthcare, drug discovery and transport as a few of the areas.

“With the creation of the AI Research Centre, we believe the UK can lead by example in international community, shaping the development and use of AI worldwide, to ensure its potential and benefits are felt by all,” said Tom Keen, Head of Business Development, British Innovation Gateway, at Cisco.

Alongside the AI research centre, Cisco has also announced it also fund work in mobility, addressing key challenges in cyber security and connectivity for autonomous vehicles, clean energy to fuel the digital era and also initiatives to address challenges for the ageing society. The final project aims to address issues of loneliness, social exclusion and pressures on public services.

Looking more specifically at the mobility project, this will kick off with Project Swift in Scotland. Working in partnership with ScotRail, the aim is to place high-speed wifi on trains between Edinburgh and Glasgow in a commercially sustainable model. It’s a bugbear for many commuters throughout the UK, therefore an easy PR win for the firm should it prove to be successful.

Orange picks Transylvania for 5G FWA demo

Operator group Orange took its mate Cisco and Samsung on a road-trip to northern Romania to show off its 5G multi-vendor fixed wireless access skills.

Orange says the test is the first of its kind in Europe and is a key step in the development of 5G in the region. At its core it seems to be a classic FWA set up, but using 5G architecture and millimetre-wave spectrum. The radio base station of the virtualized access network connects through fiber to the virtualized Core network installed in the Orange datacenter.

It took place in a village called Florești, near the town of Cluj, which is apparently the capital of the province of Transylvania. 15 Orange residential customers got to live the 5G FWA dream, which also involved Samsung 5G ‘terminals’ (which seems to mean small cells in this case) and Cisco routers.

“This is a test which brings us closer to the future, an opportunity to better understand the way in which technology works in real usage environment conditions, the challenges that we can face while deploying new technology and the benefits it can bring to both our residential and business customers.” said Liudmila Climoc, CEO of Orange Romania (pictured, center).

Perhaps seduced by the prospect of encountering vampires, Iain Morris of Light Reading flew over to Transylvania to witness the demo first hand. And it looks like his wish was granted, in a way, because among the Orange execs he met was one Arnaud Vamparys. You couldn’t make it up! You can read more about his Romanian road-trip here.

BT decides to resell some Cisco SD-WAN gear

UK telco group BT has launched a new global managed service based around Cisco software defined wide area network (SD-WAN) kit.

BT has a fairly established history of partnering with Cisco, so this is more of an extension of the existing relationship than something completely new. To date it has all been about the NFV and SDN so this latest initiative is pretty consistent with that.

Most of the announcement reads like a piece of Cisco marketing, detailing what a great idea ‘BT Connect Cisco SD-WAN’ is if you want to keep an eye on the data flows across your WAN. This is especially handy in the transition to the cloud, which seems to be a big reason why BT wants to add it to its managed services portfolio.

“Over 90 per cent of BT’s global WAN customers use Cisco technology and the vast majority ask us to manage it,” said Keith Langridge, VP of Network Services at BT. “Today’s announcement gives them a choice of physical or virtualised Cisco SD-WAN portfolio delivered as managed services backed by our excellent security credentials.

“We have a wealth of know-how and experience in designing hybrid networks and a global infrastructure engineered for SD-WAN and NFV service delivery. Organisations looking at taking their first step to SD-WAN can be reassured that in BT, they have an established, trusted Cisco partner able to give professional services advice to plan, build and evolve secure and reliable hybrid networks globally.”

“BT is offering the complete portfolio of Cisco SD-WAN-based solutions as managed services and doing so on a truly global scale,” said Scott Harrell, GM of the Enterprise Networking Business at Cisco. “Cisco SD-WAN, built on Viptela technology, is a great example of how intent-based networking is fundamentally changing the blueprint for networking.”

The extra bit of added value BT is claiming concerns its orchestration capabilities, indicating the whole package is aimed at companies generally looking to sort their virtualized lives out. The managed services part promises to hold their hands throughout their network evolution and the tone of the announcement suggests there are more BT/Cisco announcements to come.