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Business News/ Industry / Telecom/  Ericsson, Cisco in partnership to provide future-oriented networks
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Ericsson, Cisco in partnership to provide future-oriented networks

Ericsson, Cisco will merge the offerings including routing, data centre, networking, cloud, mobility and global services capabilities

Under the partnership, Ericsson, Cisco will leverage each other’s strengths. Photo: AFP Premium
Under the partnership, Ericsson, Cisco will leverage each other’s strengths. Photo: AFP

New Delhi: Sweden-based telecommunications equipment maker Ericsson and California-based networking equipment maker Cisco Systems Inc. on Monday said they have entered into strategic partnership to provide future-oriented networks that could lead to incremental revenues of up to $1 billion by 2018.

Under the partnership, the two companies will leverage each other’s strengths. They will merge the offerings including routing, data centre, networking, cloud, mobility, management and control, and global services capabilities to deliver a highly secure technology architecture for seamless indoor and outdoor networks.

While this is a global partnership, what is noticeable is both the companies have been sharpening their focus on India since last year while stepping up their investments in the country and firming up their strategies to grab the Digital India opportunity.

Cisco, which generated about $1.1 billion in revenue from India last financial year, and invests about $1.7 billion annually in the country, has made “over 25 direct and indirect investments" in the country and is “collaborating with entrepreneurs across India to discover and accelerate the creation and adoption of disruptive technologies as well as new business models around IoE (Internet of Everything)", Cisco’s chief executive-designate Chuck Robbins said in an interview with Mint in June.

For Ericsson, India is the third largest market by revenues, accounting for 6% of the annual turnover among 180 countries, according to Hans Vestberg, president and chief executive, Ericsson. The firm is betting big on 4G rollout in the country which is expected to increase mobile subscriptions and improve mobile Internet consumption.

As the world catches up with so-called emerging technologies—social, mobility, analytics and cloud—in addition to digitization or digital transformation in enterprises and organizations going viral, the two industry players look to tap in the upcoming demand for networks that will “require new design principles to ensure they are agile, autonomous, and highly secure", the companies said in a statement.

The new network architectures will include 5G, cloud and the Internet of Things. In other worlds, it will have connected mobile devices, sensors as well as traditional networks on cloud talking to each other in a seamless fashion.

This will be supported by “multiple agreements that 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 statement said.

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 to $1 billion or more for each by 2018", the statement said.

The joint initiative will also look at software-defined network, where in a network is automated, maintained and monitored.

“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," said Hans Vestberg, president and chief executive officer, Ericsson. “For Ericsson, this partnership also fortifies the IP (intellectual property) strategy we have developed over the past several years, and it is a key move forward in our own transformation."

“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. T... Our partnership will drive growth for both companies, unique value for our customers, and incredible innovation for the industry," said Chuck Robbins, chief executive officer, Cisco.

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Published: 10 Nov 2015, 11:04 AM IST
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