Ericsson and Cisco announced a broad strategic partnership focused on Service Providers, enterprise networking and the Internet of Things (IoT) ecosystem.
The companies see an incremental revenue opportunity of $1 billion or more expected for each company by calendar year 2018. For its part, Ericsson said the extended addressable market is primarily in professional services, software and resell of Cisco products. Ericsson also expects the partnership to generate full-year effect from synergies, primarily in expenses of SEK 1 billion in 2018.
The alliance will 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. Together, Ericsson and Cisco hold over 56,000 patents and invest $11 billion annually in R&D. The companies will begin working on a joint initiative focused on SDN/NFV and network management and control.
Hans Vestberg, President and Chief Executive Officer, Ericsson, stated “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 center 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.”
Chuck Robbins, Chief Executive Officer, Cisco said 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.”
