For example, Cisco and Ericsson plan to discuss FRAND policies and enter a licensing pact for their respective patent war chests.
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“The strategic partnership will be a key driver of growth and value for the next decade, with each company benefiting from incremental revenue in calendar year 2016 and expected to ramp (up) to $1 billion or more for each by 2018”, they said.
The companies say that by 2018, they each expect to add $1 billion in revenues as a result of the partnership.
The deal will have competitive ramifications for many of Cisco’s and Ericsson’s rivals, including Huawei Technologies, Arris, and Nokia, which is acquiring Alcatel-Lucent for $16.6 billion.
Ericsson and Cisco have announced what they call “a multi-faceted relationship” that will “create the networks of the future” but appear to have stepped back from a full merger of the two companies.
Ericsson specializes in providing networks and services to telecommuncations operators, while Cisco offers networking solutions to a wider range of businesses and home users. “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”.
“We have evaluated the impact of acquisitions, our own development, and other strategic opportunities – and this partnership is by far the best way forward”.
Next-generation strategic partnership will drive growth, accelerate innovation, and speed digital transformation demanded by customers across industries. “We have worked with Ericsson during the past year on developing a strategy for future industry leadership, and can start executing together today”.
There will also be focus on joint innovation, including a joint initiative focused on software-defined networking, network functions virtualisation and network management.
Ericsson said Centerview Partners provided advise on the partnership.
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Updated with comments from Ericsson’s CEO and Cisco’s CSO.
