A Powerful Networking Pact

Cisco and IBM enter into a new technology, networking, and strategic services alliance

IBM and Cisco® Systems, Inc. recently formed a strategic global alliance designed to help both companies provide more powerful and flexible combinations of networking solutions, technologies, and services to businesses and service providers worldwide. Read on to learn about the details of the alliance.

Q: What has been announced?

A: IBM and Cisco Systems have announced a $2 billion (U.S.) technology agreement, a strategic alliance with IBM Global Services, and the acquisition by Cisco of portions of IBM’s networking intellectual property.

Q: Why are IBM and Cisco forming this alliance now?

A: By leveraging each company’s core strengths, this alliance will enable IBM and Cisco to develop and deliver solutions that greatly enhance network and systems performance. Companies that are becoming e-businesses demand higher levels of security, availability, and application performance. IBM and Cisco will collaborate in areas such as business policy management to develop powerful infrastructures that speed the deployment of e-business capabilities and provide these higher levels of service. One of the primary goals of this partnership is to provide companies with greater flexibility in developing mid- to long-term networking strategies through an expanded product portfolio. In addition, the partnership is designed to help companies quickly and easily implement next-generation networks through a combination of new services.

Q: What exactly does this announcement include?

A: The announcement includes three main areas:

1. An agreement by Cisco to purchase $2 billion (U.S.) in IBM technology over the next five years. This is consistent with IBM’s increased focus on supplying technology to the communications industry.

2. The acquisition by Cisco of routing and switching intellectual property from IBM’s Networking Hardware Division. IBM will continue to offer and support SNA solutions, Token-Ring solutions, and Ethernet adapters. IBM will also continue to sell router and switch products to existing customers, and will continue to support and maintain those products as usual. IBM’s Networking Hardware Division will gradually phase out new development and marketing of router and switch products. However, it will work closely with Cisco to develop network evolution scenarios that will enable current IBM customers to add Cisco products to existing networks. To facilitate a smooth transition, Cisco and IBM will establish a joint project office and create interoperability labs for testing.

3. A strategic alliance between IBM Global Services and Cisco. The two companies will offer a full spectrum of services and jointly developed solutions for companies’ e-business and networking needs. Cisco customers worldwide will also have greater ability to use IBM Global Services to support their Cisco products.

Q: Does this mean that IBM is exiting the networking hardware business?

A: No. IBM will continue to offer and support its SNA and Token-Ring solutions, and Ethernet adapters through worldwide sales and distribution channels. IBM will also continue to sell routing and switching products to customers currently rolling them out, and will provide ongoing support to those customers for the full length of existing contracts.

For more information
Visit www.ibm.com/networking or www.cisco.com

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November 1999