IBM/Cisco Alliance to Benefit Customers of Both Companies

In what is likely to become an historic move in the legacy of information technology, IBM has agreed to supply Cisco Systems Inc. (San Jose, Calif.) with network technology, components and computer services in a five-year deal valued at $2 billion.

IBM also announced a strategic alliance between its Global Services division and Cisco, whereby the two companies will provide their customers with a spectrum of services and jointly developed solutions for e-business and networking needs. Cisco customers will also gain the ability to use IBM Global Services to support Cisco products.

Recognized as the preeminent manufacturer of Internet-enabling equipment, Cisco will be the beneficiary of patents and intellectual property from IBM's Networking Hardware Division for network equipment like hubs, switches and routers.

"As customers move from traditional business models to become e-businesses, they need assistance and leadership from their technology providers," Dr. James Vanderslice, senior VP and group executive of IBM Technology Group, said in a company press release. "Through this new alliance, we will provide that leadership by combining IBM's strengths in servers, software, services and technology for e-business with Cisco expertise in networking technology."

Selby Wellman, senior VP of the Interworks business division at Cisco Systems, added, "The Internet is reshaping the fortunes of all businesses, and we believe this alliance between Cisco and IBM will bring great value to our mutual customers by partnering to migrate them toward New World Internet-based business processes."

--L. Greenemeier