Cisco IT and Internet Business Solutions Group Case Study
Video-Enhanced Acquisitions
How Cisco Used Video to Improve the Acquisitions Integration
Process
Video services reduce travel costs and accelerate Cisco‟s acquisition of Tandberg.
Cisco IT Case Study / Video / Acquisitions Integration: Acquisitions are often viewed as high-touch
transactions that require numerous visits between the negotiating companies to successfully close the
deal. In October 2009, Cisco® announced its intent to acquire the Norwegian firm Tandberg, a leader
in video communications. This case study describes how the use of video services between the two
companies helped to accelerate acquisitions integration planning and execution while reducing travel
costs and employee disruption.
Challenge
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
“By using video technologies we
were able to break many of the
barriers in each phase of the
acquisitions process. The „visual
touch‟ that video provided helped us
tremendously, and use of video will
play an integral role in future
acquisition integrations.”
Jawahar Sivasankaran, Senior Manager, Cisco IT
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.
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.
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Cisco IT and Internet Business Solutions Group Case Study
Video-Enhanced Acquisitions
Video Infrastructure
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
Tandberg 1700 MXP
Tandberg Profile
Tandberg E20
Cisco TelePresence System 3000
Cisco TelePresence System 500
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:
Early Engagement
Video use was limited at this stage.
Negotiation
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.
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Cisco IT and Internet Business Solutions Group Case Study
Video-Enhanced Acquisitions
Preparation for Announcement
Used Cisco TelePresence services to prepare messaging and logistics for the global acquisition announcement.
Announcement
Video broadcast the announcement to Tandberg employees worldwide, providing their first engagement with Cisco
leaders.
Engaged with press and analysts via TelePresence.
Pre-Close Deal Management
Demonstrated out-of-the-box interoperability between Cisco and Tandberg systems.
Pre-Close Integration Planning
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.
Day 1 - 60 Integration Execution
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.
Results
Increased TelePresence Usage, Enhanced Integration Experience
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).
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Cisco IT and Internet Business Solutions Group Case Study
Video-Enhanced Acquisitions
Figure 1.
TelePresence Usage at Tandberg Oslo Office During the Integration
CTS3000 Use Oslo
Acquisition discussions required an additional 25 TelePresence hours per month
120
Hours of TP per month
100
80
60
40
20
Hours of Tp per month
Average: July 2008 to August 2009
2010.04
2010.03
2010.02
2010.01
2009.12
2009.11
2009.10
2009.09
2009.08
2009.07
2009.06
2009.05
2009.04
2009.03
2009.02
2009.01
2008.12
2008.11
2008.10
2008.09
2008.08
2008.07
2008.06
0
Average: September 2009 to March 2010
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 ninehour 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.
“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.”
Christopher Reberger, Senior Manager,
Internet Business Solutions Group, 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.
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Cisco IT and Internet Business Solutions Group Case Study
Video-Enhanced Acquisitions
●
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.
Next Steps
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.”
Suresha Bhat, Senior Manager, IT Emerging
Technologies, Cisco
“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.
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Cisco IT and Internet Business Solutions Group Case Study
Video-Enhanced Acquisitions
For More Information
To read Cisco IT case studies on a variety of business solutions, visit Cisco on Cisco: Inside Cisco IT at
www.cisco.com/go/ciscoit.
For more information on Cisco and Tandberg integrated solutions, visit
www.cisco.com/en/US/solutions/ns669/ttg.html.
Note
This publication describes how Cisco has benefited from the deployment of its own products. Many factors may have
contributed to the results and benefits described; Cisco does not guarantee comparable results elsewhere.
CISCO PROVIDES THIS PUBLICATION AS IS WITHOUT WARRANTY OF ANY KIND, EITHER EXPRESS OR
IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
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