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.

Cisco video exit demonstrates the dangers of diversification

Cisco has announced it will sell its Service Provider Video Software Solutions (SPVSS) business to a company backed by private equity firm Permira, the company it bought it from in the first place.

The new company will command a relatively broad portfolio consisting of Cisco’s Infinite Video Platform, cloud digital video recording, video processing, video security, video middleware, and services groups. Abe Peled, former Cisco video executive and adviser to the Permira Funds, will head up the new company focused on developing and delivering video solutions for the Pay-TV industry. Cisco will retain the video and media technology related to its core business in networking, multi-cloud, security, data, and collaboration.

“This is a unique opportunity to lead and shape the video industry during its transition with the flexibility as a private company,” said Peled. “The new company will have the scale, technology innovation, and world-class team to deliver outstanding go-to-market execution, customer engagement, and new end-user experiences.

“Cisco has built a profitable business in the video space with innovations to capitalize on IP distribution and cloud-based services. These combined assets provide a significant new opportunity for the new company. I am thrilled to be working again in this area with Permira who is committed to innovation and support for our Pay-TV customers, and look forward to the ongoing working relationship with Cisco in support of our mutual customers.”

In offloading this business unit, Cisco follows Ericsson out the media emergency exit. Both these companies looked towards video and media as a means to reinvent themselves in the digital economy, and both are looking quite sheepish in this segment now. Having purchased NDS from Permira in 2012, the video business has slumped, with revenues declining from 2014 onwards.

This is the danger of diversification. To dominate a new segment you realistically have to be first there (or one of the first), with some financial clout. Unfortunately, not all predictions of fortunes come true. Sometimes it works, the companies who bet big on AI are in the money, but sometimes it doesn’t. Diversification is a gamble; Cisco, along with Ericsson, lost out here.

“It is a reflection of the challenging landscape,” said Paolo Pescatore of CCS Insight. “There are too many solution providers chasing too few dollars. Bottom line, many of these solutions providers have diversified and now need to focus on core areas. Despite this, the media and telecoms industries are closer than ever. There will be more casualties due to further disruption. This represents an opportunity for other providers who still focus on connectivity and delivery of video over the Internet.”

While this closes a dark-chapter in the Cisco story, Permira will be rubbing its hands together gleefully. The Cisco media business was built on the $5 billion acquisition of Israeli firm NDS from Rupert Murdoch’s News Corporation and Permira. Should the firm be able to turn around fortunes, this is the sort of story which private equity executives dream of. That said, it will not be an easy task.

Customers of this division are traditional cable and satellite TV providers. The technology in question is used to send content to television set-top boxes, digital-video recorders and mobile phones, though a changing landscape and content consumption habits contributed to the poor performance of this business. Some serious investment will be needed to make this area relevant once again.

Nokia, Cisco, BT, Telefónica and Microsoft among new cybercrime-fighting cabal

34 tech and telecoms companies have signed a pledge to fight cyberattacks from criminal enterprises and nation-states.

The thing they signed is called the Cybersecurity Tech Accord and its creation seems to have been prompted by the growing trend of cyber-horridness coming from places like Russia and the apparent need for great global coordination to combat it. Microsoft seems to be taking the lead on this project, which is fair enough since its OS is the recipient of most of this aggro, but a fairly broad range of major tech companies have jumped on-board.

“The devastating attacks from the past year demonstrate that cybersecurity is not just about what any single company can do but also about what we can all do together.” said Microsoft President Brad Smith. “This tech sector accord will help us take a principled path towards more effective steps to work together and defend customers around the world.”

Here are the four cornerstones to this group effort as detailed in the announcement:

Stronger defense

The companies will mount a stronger defense against cyberattacks. As part of this, recognizing that everyone deserves protection, the companies pledged to protect all customers globally regardless of the motivation for attacks online.

No offense

The companies will not help governments launch cyberattacks against innocent citizens and enterprises, and will protect against tampering or exploitation of their products and services through every stage of technology development, design and distribution.

Capacity building

The companies will do more to empower developers and the people and businesses that use their technology, helping them improve their capacity for protecting themselves. This may include joint work on new security practices and new features the companies can deploy in their individual products and services.

Collective action

The companies will build on existing relationships and together establish new formal and informal partnerships with industry, civil society and security researchers to improve technical collaboration, coordinate vulnerability disclosures, share threats and minimize the potential for malicious code to be introduced into cyberspace.

“The Tech Accord will help to protect the integrity of the one trillion connected devices we expect to see deployed within the next 20 years,” said Carolyn Herzog, General Counsel at Arm. “It aligns the resources, expertise and thinking of some of the world’s most important technology companies to help to build a trusted foundation for technology users who will benefit immensely from a more security connected world.”