Here’s Why Cisco and Citrix Are Finally Tying the Knot

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At Wednesday’s Citrix Synergy conference, Cisco (NASDAQ:CSCO) and Citrix (NASDAQ:CTXS) made their rumored partnership official.

Under the terms of the agreement, Cisco will recommend Citrix’s cloud network platform, which competes with F5 Networks (NASDAQ:FFIV) and Radware (NASDAQ:RDWR), to clients; the companies will develop a cloud solution that combines Cisco’s servers and Nexus switches with Citrix’s platform; and will develop mobile solutions that feature their collaboration.

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According to the joint press release issued Wednesday morning, “Cisco and Citrix believe the IT industry is on the verge of the next major architectural transition: the mobile-cloud era.” In order to better compete in the new era, the two companies will combine efforts to “help enterprise and service provider customers capture the market transition and transform their business models.”

The partnership has been rumored since the beginning of October. On Monday, market analysis publication Seeking Alpha wrote that investment firm Oppenheimer and equity research firm MKM thought that a deal was imminent. A collaboration between the two companies would allow Cisco to de-emphasize its ADC hardware, application delivery controller, to eventually acquire Citrix’s cloud network platform for $1.5 billion to $2.1 billion.

F5, according to Seeking Alpha, is believed to control half of the ADC market, compared to Citrix’s 20 percent and Cisco’s 15 percent, and such a deal would place both companies in a more solid position in the market.

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