Ericsson and Cisco on Monday narrowed the gap between the telco and IT equipment markets by announcing a far-reaching strategic partnership.
The agreement will see the companies offer customers an end-to-end product and services portfolio spanning mobile, enterprise, data centre, and IP network infrastructure, as well as network control and management, and global services.
Ericsson and Cisco will also conduct joint R&D in a number of areas including 5G, the Internet of Things (IoT), software-defined networking (SDN), and network functions virtualisation (NFV). To support this effort, the companies have agreed to discuss fair, reasonable and non-discriminatory (FRAND) terms and enter into a licensing agreement for their respective patent portfolios.
"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," said Cisco CEO Chuck Robbins, in a statement.
"Today’s announcement brings together two visionary industry leaders, with complementary cultures and track records of innovation," he said.
Indeed, together Ericsson and Cisco boast more than 56,000 patents and employ 76,000 professional services staff. They also spend a combined $11 billion on R&D.
"We share the same vision of the network’s strategic role at the centre of every company’s and every industry’s digital transformation," said Ericsson CEO Hans Vestberg. "Initially the partnership will focus on service providers, then on opport unities for the enterprise segment and accelerating the scale and adoption of IoT services across industries."
The partnership is expected to generate $1 billion of additional annual revenue for each company by 2018.
