Ericsson Could Help Cisco Compete More Effectively in SDN Market



Telecom operators are adopting SDN solutions

In the previous part of this series, we discussed why Juniper’s (JNPR) stock fell by 8% after Cisco (CSCO) signed a partnership deal with Ericsson (ERIC). We also discussed how Juniper is aggressively going after leveraging the fast-growing SDN (Software-defined networking) market. Cisco is a comparatively newer player in the SDN market. It introduced the Cisco Open Network Environment, or Cisco ONE, in 2012. In November 2013, Cisco responded to the SDN trend by introducing its application-centric infrastructure (or ACI).

Article continues below advertisement

However, Ericsson could provide Cisco with much-needed mobile management technology. Lately, both AT&T (T) and Verizon (VZ) have started planning to replace proprietary networking solutions with SDN solutions. With these solutions, these companies are bracing themselves for a boom in video traffic in coming years.

Internet traffic could cross 1 zettabytes by 2016

According to a report from Cisco—part of Cisco Visual Networking Index white paper—, Internet video traffic will account for 80% of overall Internet traffic in 2019, up from 64% in 2014. It also noted that global Internet traffic will increase from 1.1 zettabytes in 2016 to 2.0 zettabytes by 2019.

Cisco has forged its second major partnership this year with Ericsson. The first one was with Apple (AAPL), back in May 2015. Cisco plans to integrate its networks with Apple’s devices so that enterprises can transfer data securely and quickly from these devices.

The PowerShares QQQ Trust (QQQ) maintains 12.8% of its holdings in Apple.


More From Market Realist