Ericsson + Cisco Ink Strategic Deal Projected To Bring Each $1B More In Sales By 2018
It's not another massive enterprise merger, but two of the biggest companies whose equipment and technology underpin a lot of our communications networks today are now teaming up.
Context & Ripple Effects
In late 2015, Ericsson and Cisco chose an alliance over the merger many expected, projecting [[a:|the strategic deal would add $1B in sales to each company by 2018]] by pairing Cisco's routers with Ericsson's radio networks. The related coverage shows what came after: rather than leaning only on co-selling, Ericsson spent the following years buying its way into adjacent layers — the $6.2B Vonage acquisition for cloud communications and Cradlepoint for $1.1B in wireless WAN gear.
First-order effects
- The two vendors immediately bundle routing and radio into combined offers aimed at operators and large enterprises, putting pressure on Nokia and Huawei to field comparable integrated stacks or concede deals at the account level.
Second-order effects
- Operators gain a single-vendor interface across wired and wireless domains, a dynamic visible years later when AT&T picked Ericsson for its $14B open-standards network modernization; Cisco, meanwhile, kept buying capability directly, paying ~$4.5B for optical component maker Acacia.
Third-order effects
- The pattern points away from loose alliances toward outright absorption: partnerships that proved strategically central ended in acquisitions (Vonage, Cradlepoint) and portfolio pruning (the Iconectiv sale), suggesting equipment vendors consolidate around owned end-to-end stacks rather than co-marketed ones.
The trend: Telecom equipment vendors are converting co-selling partnerships into full capability ownership through acquisition as networks converge on integrated, standards-based architectures.