Feeds

Big Blue backs out of networking via Cisco deal

Agreement worth billions of dollars to both companies

  • alert
  • submit to reddit

Build a business case: developing custom apps

IBM has announced a five-year deal with Cisco Systems that will let Big Blue bow out of the routing and switching marketplace. IBM will supply networking vendor Cisco with network technology, components and services in the deal which was yesterday valued at an estimated $2 billion. Cisco will buy IBM's network equipment business, which will let IBM phase out some of its older switch and router product lines. IBM will keep the network equipment which is used to link mainframe computers. IBM thinks that there is more profit to be made from supplying parts and services to old rivals such as Cisco than trying to compete by investing in its own networking kit business, it was stated. IBM said this was just the beginning – and it expected to sign more deals in the communications sector. Selby Wellman, senior VP of Cisco Interworks Business Division, said the supply deal would add whopping sales amounting to billions of extra dollars for both companies. The specifics involve Cisco buying around 200 patents for network equipment such as routers and switches from IBM's Networking Hardware Division. The move will increase sales of IBM custom computer chips used in Cisco networking kit. Sources estimated that the deal would also pull in $3 billion of revenue for IBM in extra service charges. IBM added that it would support all of its Cisco network installations. ®

Build a business case: developing custom apps

More from The Register

next story
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Amazon says Hachette should lower ebook prices, pay authors more
Oh yeah ... and a 30% cut for Amazon to seal the deal
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Feel free to BONK on the TUBE, says Transport for London
Plus: Almost NOBODY uses pay-by-bonk on buses - Visa
Nintend-OH NO! Sorry, Mario – your profits are in another castle
Red-hatted mascot, red-colored logo, red-stained finance books
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Maximize storage efficiency across the enterprise
The HP StoreOnce backup solution offers highly flexible, centrally managed, and highly efficient data protection for any enterprise.