IBM and Cisco strengthen ties

This month’s networking deal between IBM Corp. and Cisco Systems Inc. helps flesh out Cisco’s deployment strategy for its voice/data convergence wares, according to an industry observer.

“The ducks are being lined up in this industry as far as the hardware guys go,” said Dan McLean, an analyst with IDC Canada Ltd. in Toronto. “They’ve basically announced their convergence strategies and now they’re lining up services companies as the people that will implement those strategies.”

Just weeks before the IBM/Cisco deal, Nortel Networks had added Hewlett-Packard Co. to its list of key convergence solutions providers, McLean noted. Nortel’s list also includes Compaq Computer Corp. and NCR Corp.

There are several components to the IBM/Cisco agreement.

Firstly, IBM is leaving the routing and switching market place by selling 200 patents for routing and switching gear to Cisco. IBM will continue to manufacture routers and switches for 12 months and support installed equipment beyond that time frame.

Secondly, Cisco has agreed to purchase US$2 billion worth of IBM chipsets over the next five years.

Thirdly, and perhaps most importantly, IBM Global Services will significantly strengthen its ties to Cisco.

“It will be great for our networking services business,” said Phil Soper, general manager for systems management and networking with IBM Global Services in Toronto. “Cisco has been the technology leader in Canada for some time and we’ve developed a good working relationship with them. But it always had that shadow of the (IBM) Network Hardware Division (NHD) presence that made trust difficult.”

Now that Cisco salespeople know the company’s products aren’t competing directly with IBM equipment in customer accounts, Cisco and IBM can enjoy a much closer partnership, Soper explained.

Grover Smith, director of strategic alliances for Cisco, said the agreement will improve Cisco’s market presence.

“This allows us to connect with a company with a global reach,” he said.

IBM Global Services employees will now have access to higher level training on Cisco devices. IBM has also made a commitment to increasing Cisco certification activity amongst its employees.

Soper said customers with IBM networking equipment will be offered three choices: they can continue to run their networks on their IBM gear; they can transition to Cisco equipment; or they can go with a third-party equipment vendor.

Cisco and IBM will be establishing labs and project offices around the world to develop technologies and procedures to transition users from IBM to Cisco equipment, Soper noted.

Although IBM Global Services definitely has tighter ties to Cisco, Soper said the firm will continue to be vendor-neutral.

“If Cisco wasn’t the best fit for a client, we’d recommend another technology,” he said. “And so would the other reputable services companies out there.”

But IDC’s McLean noted the pact does tie IBM Global Services much more closely to Cisco.

“I think it’s clear Cisco is looking to establish IBM as one of its premier service partners and in the area of multi-service IP, by virtue of this agreement, I think IBM steps out front and centre,” he said. “IBM has to remain multi-faceted, but…I think they’ve made a clear commitment to Cisco.”