Ericsson and Cisco tie-up

There will be “multiple agreements that include commitments to network transformation through reference architectures and joint development, systems-based management and control, a broad reseller agreement, and collaboration in key emerging market segments”, said a statement from the…

The companies predict added revenue of $1 billion or more for each company by the end of 2018 from the partnership.

Ericsson and Cisco have a combined 56,000+ patents, $11 billion of research and development investment, and more than 76,000 services professionals serving customers across more than 180 countries. “Initially the partnership will focus on service providers, then on opportunities for the enterprise segment and accelerating the scale and adoption of IoT services across industries”.

Networking companies Ericsson and Cisco have signed a wide-ranging business and technology deal which they said could soon be generating an extra $1bn a year in sales for each company.

Nonetheless, there is encroaching competition for both companies from large incumbent players like Huawei (which competes directly with Ericsson but also increasingly with Cisco), Nokia Siemens/Alcatel Lucent (which also recently merged) and even smaller upstarts moving into their common, traditional carrier and service provider market.

“I don’t believe in big mergers – this is by far the best solution you can get”, Ericsson chief executive officer Hans Vestberg said in a phone interview.

Both the companies are going to offer more value to customers by offering service providers an end-to-end product and services portfolio, and joint innovation that accelerates new business models.

The partnership also helps Ericsson respond to Nokia Oyj’s expansion in that field.

Next-generation strategic partnership will drive growth, accelerate innovation, and speed digital transformation demanded by customers across industries.

“Today’s announcement brings together two visionary industry leaders, with complementary cultures and track records of innovation”, he said.