Cisco, Ericsson Partner To Create ‘Networks of the Future’

Cisco Systems and the Swedish telecom giant Ericsson announced a sweeping global partnership Monday that's a few steps short of a merger, but which should shake up the networking industry with a powerful new combination.

The two companies said they were joining forces to create "networks of the future."

The pooling of the two companies' research and development teams could accelerate the introduction of faster mobile devices through 5G, the next phase of mobile telecommunications. The higher speeds of 5G will provide wireless connections for many new applications, including wearables, smart homes, and traffic safety, and will be a key component of the "networked society," according to Ericsson's research blog.

The announcement underscores the rapid changes occurring in the industry, as mobile and cloud computing and even the evolving "Internet of Things" creates new demands for faster deployment of networks through software as well as hardware.

The partnership was announced jointly by Ericsson President and CEO Hans Vestberg in Stockholm and Cisco CEO Chuck Robbins in San Jose. The two said they had been working on the agreement for more than a year, and would hit the ground running, with training already underway at both firms.

The news comes on the heels of the creation of a new data management and networking giant with computer maker Dell's $67 billion acquisition of EMC, a storage and network infrastructure company. In addition, Hewlett-Packard spun off a new company, Hewlett Packard Enterprise, last week to focus on providing data, networking, mobility and cloud computing technology and services to industry.

The partnership has a target of $1 billion in additional sales for each of the companies by 2018, the companies said.

"This is not a normal partnership," said Vestberg in a conference call. "This is way beyond that."

The new partners said they will combine their abilities in routing, data center operations,...

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