SBC Communications Inc. and Cisco Systems Inc. Wednesday formed a
strategic marketing and sales alliance to accelerate delivery of
open-standard broadband services.
Through the multi-billion-dollar agreement, SBC (SBC)
tags Cisco (CSCO) as its preferred provider of data networking equipment. SBC’s network
currently connects 60 million access lines to 36 million customers nationwide.
As a part of the joint marketing and sales efforts, SBC plans to enhance
its coffers by packaging Cisco equipment along with its advanced voice,
broadband data and network integration services. The ability to bundle
broadband equipment and services gives SBC and Cisco an edge in supplying
the demand for end-to-end network solutions.
The SBC-Cisco alliance includes a series of joint research and product
development activities that are designed to help both companies meet
growing customer demand for emerging data and Internet Protocol services.
Financial terms of the alliance were not disclosed. The deal is
non-exclusive and applies to SBC’s service offerings in the continental
United States.
Edward E. Whitacre Jr., SBC chairman and chief executive officer, said
joining with Cisco brings it closer to becoming the only communications
company our customers will ever need and allows SBC to deliver top-line
revenue growth.
“Our goal is to provide customers with end-to-end, customized packages of
advanced voice, broadband data and network integration services on a global
scale through one of the most efficient, flexible, scalable and
future-proof networks in the world,” Whitacre said.
John T. Chambers, Cisco chairman and chief executive officer, said today’s
Internet economy forces companies to combine individual strengths to create
joint value for mutual customers.
“Cisco and SBC’s combined expertise in data communications and networking
will give our customers access to an ecosystem of infrastructure and
service partners, allowing them to compete more effectively,” Chambers said.
The alliance is a natural progression of a long-standing relationship
between the two companies. It more closely unites SBC’s broadband data
capabilities and service area with Cisco’s data networking, IP and
carrier-grade networking infrastructure expertise.
The deal is designed to help both companies to achieve their growth
objectives in the data, Internet and e-commerce space. Over the next three
years, SBC forecasts that its data revenues will double, growing at a
compound annual growth rate of more than 30 percent. SBC already serves
more than 100,000 customers with broadband networking services and more
than 60,000 customers with e-commerce and Web-hosting applications.
SBC’s Project Pronto, a $6 billion initiative to make DSL and other
broadband-powered services available to 80 percent of its wireline
customers by 2002 required a firm alliance with a networking specialist to
work. The alliance with Cisco will accelerate the convergence of SBC’s
voice and data backbone systems into a next-generation, packet-switched
platform.
By working with Cisco, SBC takes another step toward restructuring its
network to support IP-based services. SBC will rely on Cisco for its
Digital Subscriber Line, virtual private network, virtual point-of-presence
dial access service, broadband capabilities gateway, and asynchronous
transfer mode services.
Kitty Weldon, Yankee Group
program manager, said the alliance is a unique collaboration between two
premier companies that together can address today’s customer demand for
end-to-end managed services and connectivity solutions.
“This ‘A to Z’ relationship will benefit all types of customers as SBC and
Cisco collaborate in the lab, product development and marketplace, all to
the benefit of customers by delivering much faster and more complete
solutions,” Weldon said. “This is a three-way win for customers and both
companies.”
