Ericsson and Cisco have joined forces, announcing a massive new partnership designed to create the networks of the future. The alliance is framed by a number of agreements that have the companies working together to market and sell their routing, data center, networking, cloud, mobility, management and global service solutions – basically the whole range of products and services for each of the tech giants.
The partnership is set to generate $1 billion in revenues for each company by 2018, hinging on a global service provider agreement as well as a broad reseller agreement. The companies are also in talks to address their FRAND licensing policies and will likely enter into a licensing agreement for their respective patent portfolios.
Ericsson also confirmed that the companies will focus efforts on new development areas at both companies, including software-defined networks (SDN) and virtualization. A team of 400 research and development personnel from both companies will be dedicated to this initiative.
The move is strategically huge for Cisco and Ericsson, during a time when major tech companies are buying each other out, splitting off key businesses and moving in new directions in a frantic effort to stay competitive. Both companies compete with Huawei as well as Dell and EMC (which recently merged) and Nokia Siemens/Alcatel Lucent, which also merged.
Image via Shutterstock
“I am excited to work with Cisco on continuing to shape the Networked Society,” said Hans Vestberg, CEO of Ericsson. “Foremost, we share the same vision of the network’s strategic role at the center of every company’s and every industry’s digital transformation.”
He added that the partnership will focus on the service provider market initially, eventually moving to the enterprise sector as well. The overriding goal will be to accelerate the scale and adoption of IoT services, a goal for both companies over the past few years.
Cisco CEO Chuck Robbins added that the companies already worked together during the past year, sharing strategies for industry leadership and innovation. “With the pace the market is moving, the successful companies will be those who build the right strategic partnerships to accelerate innovation, growth, and customer value.”
Edited by
Stefania Viscusi
