Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : LSI Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Tony Viola who wrote (19868)	8/31/1999 11:20:00 AM
From: All Mtn Ski	Read Replies (2) \| Respond to of 25814

How will this affect LSI's relationship with CSCO? IBM, Cisco In $2 Bln Network Supply Pact By Eric Auchard NEW YORK (Reuters) - International Business Machines Corp. (NYSE:IBM - news) Tuesday said it had agreed to supply Cisco Systems Inc. (Nasdaq:CSCO - news), the No. 1 Internet equipment maker, with network technology, components and computer services in a five-year deal initially valued at $2 billion. The IBM-Cisco deal marks the fifth multi-billion dollar technology supply deal IBM has signed in recent months as it seeks to boost its role as a supplier of key technology components across the computer industry. Armonk, N.Y.-based IBM has disclosed a total of $30 billion in such contracts. The latest pact represents a bet by IBM that it can make more money supplying key components to former rivals, like Cisco, than it can by plowing new money into the telecommunications equipment industry and trying to compete head-on, an IBM spokesman said. Following the announcement, both stocks rose slightly Tuesday. IBM shares gained $2.125 to $125.50 on the New York Stock Exchange from Monday's closing price. Shares of Cisco, of San Jose, Calif., rose $1.625 to $68.375 on the Nasdaq stock market. In a statement, James Vanderslice, group executive in charge of the IBM Technology Group, said the pact will combine IBM's strength in powerful computers, software and computer services with Cisco's expertise in networking technology. ''This alliance demonstrates a significant opportunity for customers to utilize Cisco's portfolio of ... network solutions and IBM's technology and the reach of its worldwide services to ... move business to the Internet,'' said Selby Wellman, senior vice president of Cisco's Interworks Business Division. Terms of the new deal call for IBM to sell Cisco its patents and intellectual property for network equipment like routers and switches -- Cisco's core business -- and expand the sale of custom computer chips for Cisco equipment. In addition, the computer maker's IBM Global Services arm will form an alliance with Cisco to provide a full spectrum of consulting and network integration services to Cisco corporate customers and telecommunications services suppliers worldwide. Portions of the deal are subject to government regulatory review, the companies said. An IBM spokesman said that IBM would retain control of its SNA mainframe and token-ring high-speed network operations, as well as its local area Ethernet adapter business, but sell the intellectual property for its switches and routers to Cisco. Cisco customers will be able to call on IBM Global Services, the world's largest supplier of computer consulting and systems integration services, to support all of their Cisco network installations. Services will include network consulting and design, product procurement, network construction and maintenance. IBM Global Services plans to substantially increase the number of specialists trained to support Cisco networks, it said. Kevin Reardon, director of strategy for IBM's Technology Group, said the $2 billion pact represented the value of the components alone. Additional services contracts for IBM Global Services unit would represent further revenue, he said. Terms of the intellectual property exchange were not disclosed. Cisco and IBM said they will collaborate in setting standards for managing e-business activities over the Internet. The partnership will help customers draw up mid- and long-range network strategies and help them implement the next-generation of high-speed Internet networks by offering them new services. IBM has also struck component supply deals with Dell Computer Corp. (Nasdaq:DELL - news), the No. 2 personal computer maker, which agreed to a $16 billion component supply pact, Japanese videogame maker Nintendo Co. Ltd., Taiwan's Acer Group, a diversified computer maker, and EMC Corp. (NYSE:EMC - news) , a data storage maker. dailynews.yahoo.com