Cisco’s Intercloud illustrates how flexibility is key to co-innovation with cloud and virtual services partners
Cisco System’s Cisco Live! customer event 8-10 June in San Diego highlighted the extent to which network equipment providers (NEPs) like Cisco are radically shifting their businesses to better support their customers’ participation in the digital economy. Cisco’s Intercloud, a global network of clouds from which Cisco and its partners support cloud-based services and the Internet of Everything, is a prime example of an ambitious industry initiative, the success of which depends on radically rethinking the customer-supplier relationship to encourage co-innovation. Flexible commercial engagement models— including communications service providers’ (CSPs’) willingness to launch virtualised services without full OSS/BSS integration and to co-develop communications services with vendor partners— are an essential ingredient to Intercloud’s progress since its launch in March 2014 and provide valuable lessons for others with ambitious cloud and virtual service plans.
Moving from a “sell to” to a “sell with” partner-based strategy
Cisco and other NEPs must manage many significant changes in the way they do business as they shift from selling boxes to selling software and professional services and supporting digital economy services. For example, to create Intercloud Cisco has had to:
- enlist a wide variety of partners: the CSPs through which the cloud services will be delivered and the over 100 vendors that enrich the features and functions accessible through Intercloud nodes
- engage with each customer partner on individual terms, which could include co-development requirements and a wide variety of deployment (on-premise, hosted/managed, PaaS, SaaS) and charging (purchased, licensed, pay-per-use) models
- integrate Intercloud with its customers’ billing systems and, ultimately, OSSs
- reach agreement with its partners on intellectual property ownership
- change from a waterfall (sequential, rigid) software development approach to an Agile (modular, flexible) one, and, where it makes sense, to a DevOps (develop and operate) model
- restructure organisations, including sales, engineering and legal
- revamp sales compensation models.
Thus, Cisco’s investment in Intercloud extends far beyond the USD1 billion it has committed to building it.
Success requires top down leadership, quick wins and a willingness to be flexible
Cisco’s Virtual Managed Services (VMS), which are cloud-based communication services for enterprises and small and midsized businesses (SMBs), are an example of services that have been launched quickly off the Intercloud platform. Initial VMS offers progressed from Agile development to launch in about six months in close partnership with CSPs that were willing to accept a “minimum viable product” (MVP, for example one with minimal BSS/OSS integration and few service options). While it is difficult to predict just how many CSPs would be willing to launch a service without months of readiness and scalability testing, we view Cisco’s and its partners’ attempts as very positive for an industry struggling to compete against “fail fast” digital service providers. Cisco credits three critical factors of successful co-innovation partnerships:
- CEO support; CSP staff need executive cover.
- Customers’ willingness to make mistakes and adjust the plan as needed without invoking procurement contract penalties.
- Focus on business outcome first and then work backwards to process and technology.
Intercloud is a particularly ambitious undertaking by Cisco and its partners, but its lessons— have a business requirement and platform vision, be flexible, rethink the go-to-market, be willing to launch a service without all the bells and whistles so you can post quick wins— apply across a wide range of cloud and virtualisation service ideas.
Dana is the research director for Analysys Mason’s network-focused software research programmes. Her area of expertise is intelligent fixed and mobile network infrastructure. Her goal is to help customers strengthen their link in the communications value chain while evolving their business operations to benefit from, rather than be threatened by, shifts in the market. The key network infrastructure trends Dana focuses on include the integration of communications and IT assets and the drive towards software-controlled, virtual networking