“When the dust settles and we have more visibility, I think the reality is going to be something in between,” says IDC analyst Rohit Mehra.
Whatever it is, the alliance announced today will affect the competitive landscape and the two companies’ customers.
“The low-hanging fruit is getting Cisco’s networking portfolio in the hands of Ericsson’s vast sales and services organization,” says Mehra. “Ericsson gets a broader portfolio compared to what Juniper had, and Cisco gets the global reach to service providers.”
One can only imagine that the executives at Juniper are doing some hand-wringing today. With Ericsson embracing Cisco’s portfolio, it seems unlikely that it will continue to develop its relationship with Juniper. The routing and switching company works with the top 100 global service providers, of course, so it will be hard for Ericsson to not bump into Juniper.
“There are other relationships that Juniper has,” says Mehra. “IBM still has a great relationship with Juniper.”
Juniper has had a couple of strong quarters, which could make it an attractive takeover target or potential marketing partner, itself. The question is: Who would take it over or co-market with it?
“I think Ericsson in the past has been discussed as a potential acquirer,” says Raynovich. “The fact that Ericsson and Cisco are linking up — that does make that more complicated now. Alcatel-Lucent has a strong router portfolio, so they don’t need it.”
End-to-End Cloud and Networking
Cisco and Ericsson are touting the end-to-end advantages of their partnership, as the companies together span “routing, data center, networking, cloud, mobility, management and control, and global services capabilities,” according to their joint statement.
Apart from a combined Nokia and Alcatel-Lucent, only one other company brings together so many elements of networking and cloud: Huawei.
“The threat from Huawei cannot be underestimated,” says Mehra. “The threat from Huawei is in all these areas that Cisco and Ericsson already play.”
Cisco working with Ericsson could also become a bigger threat to HP, which has made a name for itself as a service integrator.
Analysys Mason analyst Dana Cooperson says HP presents itself as a service integrator that customers can trust because it doesn’t have a secret agenda of trying to sell hardware. “The role of prime integrator helps you take all these pieces and parts and help you put them together,” she says.
Ericsson and Cisco will be able to present themselves as less of a vendor-lock-in threat by working together.
“Customers will need to be comfortable that Ericsson and Cisco are not, even with assurances of openness and embrace of OPNFV, OpenDaylight, and other industry open source initiatives, strengthening their leading positions in mobile infrastructure, professional services and IP infrastructure to create de facto lock-in,” Cooperson writes in an analyst note.
Of the partnership agreement, Mehra concludes, “I do think it’s a good start. If this goes well for the next couple of years, they might consider a closer relationship.”