Hot discussion about Ericsson & Cisco Alliance

“Two industry leaders in the development and delivery of networking, mobility, and cloud – today announced a global business and technology partnership.” – 9 November 2015

Ericsson & Cisco: creating the Networks of the Future

  According to a collaboration, the two sides will conduct in-depth cooperation on including routing, data center, network, cloud, mobility, management and control system, and global service capabilities etc.
  At the networking area, Ericsson and Cisco will work together in 5G, cloud, IP and networking and other fields, providing end to end across the entire network infrastructure leadership, including equipment and sensor coverage, access and core networks, and Enterprise IT cloud. At the same time, the cooperation, the convergence of global service capabilities, including consulting, integration and the ability to provide support for the management of IT and network operations, will help customers more quickly achieve its business transformation.

  In addition, the two sides also agreed on FRAND (fair, reasonable and non-discriminatory) principle for the signing of the respective patent portfolio cross-licensing agreement to promote joint innovation, to provide assurance to both sides. According to the agreement, Ericsson will receive a patent license fees paid by Cisco. Ericsson and Cisco complementary advantages, together hold more than 56,000 patents, to invest $ 11 billion a year on research and development, has 76,000 services professionals.

Cisco & Ericsson Alliance

Cisco & Ericsson Alliance

Follow-up further “deep cooperation” possible?

  For Ericsson and Cisco alliance, someone joked that this form of cooperation is more like a “foreplay” of merger, but because the two sides are too large volume, industry status to be too prominent, but with different corporate culture and geopolitics , merger integration is not easy, often dragging a few years working, but the process must involve people wanted change, loss of customers and other unfavorable situation.

  Acquisition becomes more and more popular in the current market environment, select the alliance is extremely rare kind of approach. Statistics show that Ericsson’s 2014 revenue of 228 billion Swedish kronor ($ 26.3 billion), employs about 11.624 million, while Cisco revenue of $ 49.2 billion, the two companies are telecom market and network market on the first and second. So why do Ericsson and Cisco choose this time to reach such a depth of strategic cooperation?

What is the main reason for this Cooperation?

The alliance of Ericsson and Cisco would make both sides more powerful, especially in the next 5G market…

According to the Chinese Information and Communication Research Institute released “5G network technology Architecture White Paper” shows that by 2020, 5G network is expected to large-scale commercial. This year, Nokia announced the acquisition of Alcatel-Lucent, and Huawei continues to grow, with Ericsson and Cisco communications industry feel the pressure, combined with 5G is coming, how to snatch the initiative, a key future development of the major communications companies.

  First, the telecommunications industry and the Internet is becoming increasingly blurred boundaries, as well as the growing telecommunications industry pipeline. Internet has created many new areas and opportunities. Such as cloud computing, Internet +, and other new business opportunities are brought today, due to the Internet industry. The fusion of telecommunications and the Internet, will naturally have the original two dominant Ericsson and Cisco have a huge impact.
  Second, the alliance of the two sides exist in the product line are defective part. In the big trend and industry background, Ericsson and Cisco technology and products are facing adjustment. Ericsson is the king of wireless access in the field, but faced with a short board in IP, cloud computing and core routing and other fields. Cisco’s Internet infrastructure sector and challenges, but there are more challenges facing the Internet itself, SDN brought about by the impact of industrial reconstruction.
  Again, both sides are facing a very powerful way competitors. For Cisco: Huawei is the main rivals; And for Ericsson, the main rivals including Nokia (after the merger) and Huawei, the two companies have a remarkable characteristic, that is comprehensive range of product lines, can provide a relatively complete solution for the user. 

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