Small vendor SpiderCloud has a long history of poking the giant -- Ericsson -- in the small cell market, but it suddenly finds itself in a precarious spot now that Ericsson has teamed up with Cisco, the important ally SpiderCloud found to resell its products earlier this year.
It -- like some of Cisco Systems Inc. (Nasdaq: CSCO)'s other smaller partners like Altiostar -- is now asking the question, what will the conscious coupling of Cisco and Ericsson AB (Nasdaq: ERIC) mean for its own side relationship? (See Cisco & Ericsson Forge Killer Partnership.)
SpiderCloud Wireless scored a significant win when it announced that Cisco would be reselling its entire wireless small cell portfolio at Mobile World Congress in February. The privately held company specializes in indoor, enterprise small cells and has also developed a clip-on module that works with Cisco's WiFi access points to create a multimode device. (See Cisco to Resell SpiderCloud's Small Cells.)
Amit Jain, vice president of marketing and product management for SpiderCloud, says the company has been assured there is no change to its partnership with Cisco at this stage. They have been making great progress with Cisco on small cells, he says, especially with the clip-on module. "Cisco will continue marketing and selling our product to enterprises," he tells Light Reading.
The main reason to believe that plans might change, however, is that Ericsson also makes a complete indoor, enterprise small cell solution with Radio Dot (and it also happens to be a bitter rival). (See Ericsson Boasts Small Cell Breakthrough and Ericsson's Radio Dot Receives Mixed Reception.)
There would seem to be a few possibilities that could arise from this love triangle: One, it remains business as usual, as promised; two, Ericsson begins reselling SpiderCloud products as well in what would be a huge victory for SpiderCloud; three, Ericsson replaces SpiderCloud at Cisco, obviously a huge blow; or four, SpiderCloud gets acquired by Cisco or Ericsson and it becomes a moot point. This is a possibility Light Reading has raised several times in the past as well. (See SpiderCloud: A Small Cell Acquisition Target?)
Light Reading asked Jain which option he saw as most likely, but didn't get a direct response to our multiple choice. He pointed out that the press release on the partnership includes that Ericsson has the right to sell Cisco's networking portfolio, so there is potential for option number two. He also stressed the unique strength of SpiderCloud + Cisco for a new category of buyers: enterprises buying small cells on their own, without a service provider.
In that case, he says, SpiderCloud has the upperhand because its products work over the Ethernet LAN with other already installed devices, whereas Radio Dot requires Ericsson macro equipment as well.
"I think the big shift we believe is happening in small cells is that more enterprises and venues are interested in buying their own small cells, and Cisco is uniquely able to address this direct-to-enterprise model," Jain says. "That's where we feel our product is a fantastic fit. We intend to focus on that model with Cisco. Beyond that it's difficult to speculate."
Kelly Ahuja, the senior vice president of Cisco's service provider business, tells Light Reading that both Cisco and Ericsson will "continue to address our current customers' needs in these areas through our existing relationships where applicable."
Cisco Chairman John Chambers also told Barron's that he sees no conflict between its partnerships with SpiderCloud and cloud RAN vendor Altiostar and the one with Ericsson for the time being, but he did concede there may be an opportunity to fold its small cell efforts into the partnership -- though he didn't mention how SpiderCloud would fit in that scenario.
"At a high level, given Ericsson's expertise in radio and our expertise in enterprise, we could create more seamless mobility for enterprise. That's a phase that we will look at. But the immediate opportunity is in service provider," Chambers told Barron's.
For more on the partnership between Cisco and Ericsson, check out the following stories:
- Cisco + Ericsson: Analyst Reactions
- Will 'Ciscosson' Be a Success?
- Ciscosson Out to Spoil NokAlu's Wedding
- 'This Industry Will Be Won & Lost In the Next Three Years' – John Chambers
- What's the Deal Behind 'Ciscosson'?
- Juniper Takes Haircut On 'Ciscosson' Team Up
- 'Ciscosson' Aims for Future-Proof Partnership
- How Will Cisco + Ericsson Be Viewed From the Front Line?
- Cisco + Ericsson: Friends With Benefits
- Cisco & Ericsson Forge Killer Partnership
— Sarah Thomas, , Editorial Operations Director, Light Reading