Incremental revenue opportunity of $1 billion or more expected for each company by calendar year 2018
Ericsson and Cisco have announced a global business and technology partnership to create the networks of the future.
The multi-faceted relationship will offer customers the best of both companies, including routing, data centre, networking, cloud, mobility, management and control, and global services capabilities.
Together the companies plan to deliver customer value by offering service provider customers an end to end product and services portfolio, and joint innovation that accelerates new business models, and creating the mobile enterprise experience of the future through a highly secure technology architecture for seamless indoor and outdoor networks.
They will also be channelling the combined scale and innovation of both companies to accelerate the platforms and services needed to digitise countries and create the Internet of Things (IoT).
In a world driven by mobility, cloud, and digitisation, the networks of the future will require new design principles to ensure they are agile, autonomous, and highly secure, said the companies. Ericsson and Cisco will meet this challenge together by offering end to end leadership across network architectures including 5G, cloud, IP, and the IoT, from devices and sensors to access and core networks to the enterprise IT cloud.
Customers will be able to accelerate their business transformation by drawing on the parties’ complementary capabilities, including global services capabilities such as consulting, integration, and support to managed operations across IT and networks.
The announcement will be supported by 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.
The parties have also agreed to discuss FRAND policies and enter a licensing agreement for their respective patent portfolios, enabling unfettered joint innovation and providing certainty for customers of both organisations. As part of this agreement, Ericsson will receive license fees from Cisco.
Hans Vestberg, president and CEO, Ericsson [pictured], said: “I am excited to work with Cisco on continuing to shape the networked society. Foremost, we share the same vision of the network’s strategic role at the centre of every company’s and every industry’s digital transformation. 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.
“For Ericsson, this partnership also fortifies the IP strategy we have developed over the past several years, and it is a key move forward in our own transformation,” he added.
The strategic partnership will be a key driver of growth and value for the next decade, the businesses said, with each company benefiting from incremental revenue in calendar year 2016 and expected to ramp to $1 billion or more for each by 2018.
New and greater opportunities are also expected, as the partnership enables both companies to drive their efforts and investments to deliver value in growth markets.
Chuck Robbins, CEO at Cisco, stated: “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. Today’s announcement brings together two visionary industry leaders, with complementary cultures and track records of innovation. We have worked with Ericsson during the last year on developing a strategy for future industry leadership, and can start executing together today. Our partnership will drive growth for both companies, unique value for our customers, and incredible innovation for the industry.”
Meanwhile, Vittorio Colao, Group chief executive at Vodafone, said: “We welcome the partnership between Ericsson and Cisco which we believe will accelerate the pace of innovation across the communications industry as ultrafast networks, cloud services, and the Internet of Things become increasingly central to our customers’ needs.”
And Randall Stephenson, chairman and CEO, AT&T added: “Cisco and Ericsson’s announcement further reinforces the importance of seamlessly integrating IP and wireless solutions. This type of initiative is in line with the plans and investments we’ve laid out over the last four years for integrated solutions.”