Cisco and NEC have had several previous alliances, mostly at the regional and theater level. The two companies share an integration relationship in the U.S., an OEM agreement in Japan, and a joint marketing agreement in Australia. With Cisco already holding a strong position on the data side of the converged network, a successful move into telephony provides a new market that can be parlayed into increased growth rates at a time when the company's stock performance has been uncharacteristically quiet. Cisco's updated strategy involves a strengthened emphasis much farther up the Open Systems Interconnection stack than most observers might expect. Such capabilities raise voice over IP beyond a pure price play and could help accelerate deployment.
Cisco needs to tread carefully, though.
The last thing the company wants is to be perceived as moving onto the turf of large software vendors, inciting a battle that Cisco would be ill-equipped to win. The combined solution leverages Inktomi's caching and content distribution software, Portal's customer management and billing platform, Sun Enterprise Server and Solaris Operating Environment, and Redback's Subscriber Management System. Consulting companies, such as Cap Gemini Ernst and Young, are recommending the integration service for deployment. As a result, complex sales cycles involving new technologies can be simplified while cost of sales can often be reduced when the companies combine marketing resources. As is the case with all partnerships, careful selection is the key.