Monday, 09 November 2015 22:34

Ericsson, Cisco combined to create ‘networks of the future’

Ericsson, Cisco combined to create ‘networks of the future’ Face to face: Chuck Robbins, CEO of Cisco and Hans Vestberg, President, CEO of Ericsson

Ericsson has forged a strategic partnership with Cisco which it says will combine the best of both companies in a move designed to create the “networks of the future”.

Announcing the partnership on Monday, Ericsson said the companies will combine their capabilities of routing data centre, networking, cloud, mobility, management and control, and global services to offer end-to-end leadership across network architectures for 5G, cloud and IP, and the Internet of Things.

The partnership is supported by multiple agreements between Ericsson and Cisco, including a global service partner agreement, as well as a broad reseller agreement. The two companies have also agreed to discuss FRAND policies and enter a licensing agreement for their respective patent portfolios.

Hans Vestberg, President and CEO, Ericsson, says: "This partnership fortifies the IP strategy we have developed over the past several years and it is a key step forward in our company transformation."

Vestberg said, as a result of the partnership, Ericsson will extend its addressable market and is expected to generate US$1 billion or more of additional sales by 2018 (full year). He said the extended addressable market is primarily in professional services, software and resell of Cisco products, with additional sales expected to be accretive to operating income already in 2016.

The partnership is expected to generate full-year effect from synergies, primarily in expenses of SEK 1 billion in 2018.

Vestberg also said Ericsson and Cisco will continue to explore further joint business opportunities as the partnership progresses.

In a blog post on Ericsson’s website on the partnership with Cisco,Vestberg said: “As industry leaders, we have worked together to develop a joint vision for innovation and customer success. Cisco brings their leading position in IP and a strong presence in enterprise. We bring our leadership in mobile networks, our strength in global services, and strong relationships with the world’s leading service providers.

“Between us and Cisco, we hold more than 56,000 patents, invest $11 billion annually in research and development, and operate more than 76,000 services professionals serving customers in more than 180 countries.

“The strength of this partnership lies not just in its scale, but in the depth of the solutions Ericsson and Cisco can now provide to the networking market. It is a market in transition – increasingly mobile, cloud-based, and digital – and customers are seeking end-to-end solutions to reach their full potential.

“We have evaluated the impact of acquisitions, our own development, and other strategic opportunities – and this partnership is by far the best way forward. We believe that this partnership will create the most value both for our customers and for Ericsson and Cisco.”

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Peter Dinham

Peter Dinham - retired in 2020. He is a veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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