Cisco, IBM deal repositions Big Blue networking

The $US2 billion strategic alliance between Cisco Systems and IBM announced on Tuesday represents more than just a technology deal.

Paul Moung, vice president of IBM Asia Pacific's network systems and storage, told Computerworld yesterday the partnership is IBM's first step to transforming its networking hardware division.

"This is really IBM taking a new direction and moving from a network hardware business into network solutions," Moung said. "We are going to take all the expertise we have and instead of segmenting the markets into one that buys hardware and one that buys services . . .we're going to integrate all that and offer it to our customers as a total network solution."

Comprising three key components, the deal will see Cisco acquire routing and switching intellectual property from IBM's Networking Hardware Division, a new relationship between IBM Global Services and Cisco to jointly offer services and solutions for customers, and an agreement from Cisco to purchase IBM technology over the next five years.

Moung said despite selling its routing and switching intellectual property, IBM will continue to support the current line of products and existing customers until the products reach a "natural" end of life.

"Over the next 12 months we will slowly phase out new development of those products, but a very important message that we are giving to our customers is that we will continue to make the existing products available," he said.

Moung said IBM is reaffirming its commitment to Systems Network Architecture (SNA), token ring and Ethernet adapter products, with no changes to those products lines.

Richard Freemantle, senior vice president for Cisco Asia Pacific, said the alliance will benefit Asia-Pacific customers and partners, but exact impacts will not be known until the Department of Justice (DoJ) has approved aspects of the deal.

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