To survive, you've got to keep wheedling your way. You can't just sit there and fight against odds when it's not going to work. You have to turn a corner, dig a hole, go through a tunnel - and find a way to keep moving. - Twyla Tharp
Customer is unhappy with how the provider works. Due to some contractual and logistical reasons customer cannot change the provider so he chooses to force the provider to improve by adopting more iterative and incremental way of development together with other Agile practices.
Provider is not happy with the decision. He is risk averse and any change is considered a risk. Risk mitigation of this transformation receives bigger priority than the transformation itself. Management is so concerned with risks that it does not even try to understand what the transformation is all about. Any deviation from the Waterfall model and practices established years ago is considered unacceptable.