In early November Ericsson and Cisco – two industry leaders in the development and delivery of networking, mobility and cloud – announced a global business and technology partnership to create the networks of the future. The partnership consists of multiple agreements including (via a Cisco press release):
…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 parties have also agreed to discuss FRAND policies and enter a licensing agreement for their respective patent portfolios, enabling unfettered joint innovation and providing certainty for customers of both organizations. As part of this agreement, Ericsson will receive license fees from Cisco.
The Register recently published a weekly Faultline newsletter, which is created by Rethink Research and provides insight into the future of digital entertainment and the global broadband economy that discussed this new partnership between the two companies.
The partnership is a benefit because, when you juxtapose the strengths of the two companies, you find that Ericsson thrives in the wireless sector where Cisco thrives in the IP segment. So the idea is that Ericsson will provide customer leads to Cisco to solve the side of the business that Cisco thrives in, and vice versa with Cisco pushing leads to Ericsson. Rather than fight one another for total control of each customer, they can split duties and each appeal to the same customer base.
What that really comes down to is cloud computing and the Internet of Things (IoT), which we have covered for those that haven’t heard of IoT or don’t fully understand it. Once you do understand it, you’ll come to realize that to provide bandwidth for all of these connected devices, companies are going to need to find a way to provide a lot of coverage to large areas for relatively low costs. In the areas of virtualization, software defines networking, services and cloud platforms, the two companies complement one another, rather than competing. These are the areas where IoT relies most heavily.
In a nutshell, Cisco has the hardware and Ericsson has the network and research. While Cisco has a strong end-to-end approach to IoT, Ericsson has been developing the links between hosted cloud services and billions of endpoints. Each company has large service providers within the sales portfolio, meaning that a competition could ruffle some feathers and lead to an inability to do business with companies that Ericsson and Cisco both wish to do business with once IoT reaches real-world application.
So now, rather than duke it out and attempt to replicate one another’s successes, the companies will work together, deliver leads to one another, and share over 56,000 combined patents between the two companies (the majority of which belong to Ericsson, the difference of which Cisco will pay for in dollars). The most exciting part of this partnership (for end users at least) will be in the joint research and development that the companies are able to participate in. The companies will focus on creating new platforms for secure technology architecture indoors and outdoors, and acceleration of platforms for the IoT.