Ericsson and Cisco Systems CSCO +0.00% announced yesterday a strategic partnership focused on business transformations in the communications service provider space. Together, the Swedish mobile equipment maker and the American networking corporation, can boast more than 56,000 patents, $11 billion of research and development investment, and over 76,000 services professionals located in more than 180 countries.
The partnership comprises a series of agreements spanning everything from reselling and joint sales, to technology cross-licensing, co-innovation and joint professional services, and should it aims at boosting each company’s annual revenues significanly.
“Given Ericsson’s annual revenues of more than USD26 billion and Cisco’s of more than USD49 billion, and opportunities in new enterprise-driven communications and IoT services, we think each company’s goal of driving USD1 billion in new revenues by 2018 based on this strategic partnership is achievable,” said Dana Cooperson, Research Director at global telecoms specialist Analysys Mason
Ericsson’s nearly USD5 billion and Cisco’s over USD 0.7 billion in telecom software professional services is one possible area ripe for growth.
The agreement is described by analysts as an aggressive move positioning Ericsson and Cisco against competitors, like Huawei, HP, and Nokia -Alcatel-Lucent , for dominance as the partners of choice for communication service providers that want to become digital service providers as well.
In fact, the announcement was well received by several high-profile executives of companies like Vodafone , AT&T T -3.13% and Verizon. For Robert Gurnani, Verizon’s Chief Information and Technology Architect, it even “has the potential to reshape the industry”.
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