Ericsson and Cisco Systems announced a strategic partnership focused on business transformations in the communications service provider space supported by a common network-function virtualisation (NFV) and sottware-defined networking (SDN) architecture. Their partnership comprises a series of agreements spanning everything from reselling and joint sales, technology cross-licensing, co-innovation/joint development and professional services.
Commenting on the partnership and the key to its success, Dana Cooperson, Research Director at Analysys Mason, global telecoms specialist, said “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.”
“We see Ericsson’s nearly USD5 billion and Cisco’s over USD 0.7 billion in telecom software professional services as just one area ripe for growth.”
Analysys Mason sees this as an aggressive move positioning Ericsson and Cisco against their main competitors, including Huawei, HP, and the combined Nokia/Alcatel-Lucent, for dominance as the partners of choice for CSPs wanting to become digital service providers (DSPs).
The companies have made few details available to assess, however, Analysys Mason sees three areas necessary for the success of this strategic partnership:
1. The common architecture must be robust enough and the companies’ ability to pre-integrate solutions based on the architecture must be of sufficient value in time and money to be compelling to customers.
2. The companies will need to show that they are not too big to move quickly to create joint solutions.
3. Customers will need to be comfortable that Ericsson and Cisco are not, even with assurances of openness and embrace of OPNFV, Open Daylight, and other industry open source initiatives, strengthening their leading positions in mobile infrastructure, professional services and IP infrastructure to create de facto lock-in.
