Cisco on Cisco

As of August 2010, Cisco had completed more than 130 acquisitions, and with each one Cisco sought to improve the integration process. The use of technology during various phases of the process has enabled Cisco to focus on key aspects of the acquisition: employee integration and business processes.

In October 2009 when Cisco announced that it would acquire Tandberg, video was positioned as a technology that would enhance the acquisition integration experience. A leader in the video space, Tandberg’s network architecture and dial plans are designed for efficient use of video. In step with Cisco, Tandberg has built a culture of collaboration based on video.

The most obvious challenge in the acquisition process was the significant geographic and time difference between the Tandberg and Cisco corporate sites. Tandberg has dual headquarters in Oslo, Norway, and New York City, New York, offices in 34 countries, and more than 1500 employees worldwide. Many of the senior executives are in the Oslo office, and most of the Cisco executives involved with the acquisition are based in San Jose, California. It was important for both Cisco and Tandberg executives to maintain face-to-face communication during the negotiation and integration process. While travel was mandatory for critical steps in the acquisition process, it was challenging for executives at both companies to make frequent trips between San Jose and Oslo without delaying or disrupting the process. Both companies had to look for alternatives to frequent air or other traditional travel modes. Video provided the solution.

Tandberg and Cisco each have pervasive video infrastructures. While the Cisco and Tandberg products offered tremendous interoperability, there was very little integration between the two enterprise system deployments at Cisco and Tandberg.

To facilitate information exchange between Tandberg and Cisco during the integration process, the following video infrastructure was deployed between December 2009 and March 2010:

• 30 Tandberg 1700 MXP desktop units in various San Jose locations
• 8 Tandberg Profile dual-screen endpoints
• 10 Tandberg E20 video phones
• 1 Cisco TelePresence System (CTS) 500 in Oslo
• 1 CTS 500 in London
• 1 CTS 500 in Reston, Virginia
• 1 CTS 500 in Madrid
• 1 CTS 3000 in Cisco’s Oslo office

Cisco conducts about 30,000 Cisco TelePresence™ sessions and approximately 558,000 WebEx® meetings per month, and all Tandberg employees have video phones on their desks and participate in 100,000 video calls per month. This high video activity led to an expectation within Tandberg that most audio communications would be enhanced with video.

From negotiation to closing, video was in the forefront of the acquisition integration process:

Video use was limited at this stage.

Cisco's initial offer to Tandberg presented over a Tandberg video conference link, with Cisco executives in San Jose and Tandberg executives in Oslo.

Installed additional CTS 500 endpoints in London offices to allow real-time collaboration between the Cisco acquisitions team on location and Cisco leadership in San Jose.

Held numerous video meetings between Cisco and Tandberg executives to negotiate deal and employment terms.

Used Cisco TelePresence services to prepare messaging and logistics for the global acquisition announcement.

Video broadcast the announcement to Tandberg employees worldwide, providing their first engagement with Cisco leaders.

Engaged with press and analysts via TelePresence.

Demonstrated out-of-the-box interoperability between Cisco and Tandberg systems.

Kicked off joint integration planning efforts using Cisco TelePresence.

Deployed CTS units in Oslo, the United Kingdom, and Reston, Virginia.

Deployed Tandberg units to the integration team.

Introduced Cisco to the Tandberg team using Cisco TelePresence Show and Share video technology.

Globalwide "champagne toast" to celebrate the acquisition close with all members of the combined TelePresence team and key executives from Cisco.

Used new interoperability technology to drive meetings, leveraging broad video deployments at both companies.

Used existing Cisco IT infrastructure.

For the acquisition Cisco employed around 200 staff members in 12 integration teams, and Tandberg supplied around 30 staff members. Not surprisingly, monthly TelePresence usage increased from 63 to 88 hours at Tandberg’s Oslo office during the acquisition process (Figure 1).

To help assess the impact of increased video usage, interviews were conducted with the acquisition teams. Without exception, they agreed that the video experience improved the information collection and exchange processes. In particular, video provided the greatest benefit in shortening the duration of the transaction overall, lowering travel costs, and easing employee disruption for an integration that traversed a significant geographic distance and nine-hour time difference.

 

 

Chief among the benefits cited:

• A material reduction in travel between the two companies. “For some organizational groups, the expected six or seven trips were replaced with a single trip. Cisco saved close to [US]$1 million in travel and accommodations during the acquisition,” says Christopher Reberger, senior manager in the Internet Business Solutions Group at Cisco.
• A material reduction in disruption and downtime typically caused by travel.
• Innovative video use. For example, uploaded video of demonstration center walkthroughs filmed with a Flip Video™ camera provided much more useful information compared to still photos.
• The ability to interpret subtle signals from body language and facial expressions of participants in TelePresence and video meetings.
• A mix of 1:1, 1:many, and many-to-many meeting participants on video calls.
• Improved collaboration and increased sense of community created by relationships forged through video.

Internal IT groups at Cisco and Tandberg are working on an end-to-end video architecture, which will include entitlement processes and network architecture and integration with other collaboration technologies.

"We will continue to integrate and expand the full scale of video technologies from Cisco and Tandberg within the Cisco IT environment. We expect the use of video within Cisco to grow, enabling us greater business advantage to serve our customers, partners, and employees," says Suresha Bhat, senior manager in the IT Emerging Technologies group at Cisco.

Video continues to be a key application driving bandwidth requirements globalwide. According to the Cisco Visual Networking Index for 2009-2014, the sum of all forms of video (TV, video on demand, Internet, and peer-to-peer) will exceed 91 percent of global consumer traffic by 2014. The Cisco Visual Networking Index is an ongoing initiative to track and forecast the impact of visual networking applications. Within Cisco today video comprises 50 percent of the allocated network traffic. Cisco's use of video is poised to grow, bringing more business opportunities, and enabling superior collaboration and increased customer satisfaction.