Cisco and Lenovo agree to engineer AI, genAI solutions together

From integrating Cisco Nexus to Lenovo’s infrastructure portfolio to engineering AI solutions together, here’s what you need to know about Lenovo and Cisco’s new agreement

IT hardware giants Cisco and Lenovo are teaming up to jointly design and engineer integrated products around networking, purpose-built AI infrastructure and generative AI solutions.

The two tech behemoths will also integrate Cisco's Nexus networking ecosystem into Lenovo's edge-to-cloud portfolio with the goal of providing customers with networking solutions optimised for interoperability within Lenovo infrastructure solutions.

The goal is to design solutions to "simplify the path to AI innovation and digital transformation," said Lenovo's Kirk Skaugen, executive vice president, and president of Lenovo Infrastructure Solutions Group, in a statement.

"Our combined leadership in advanced networking and end-to-end server and data management infrastructure will deliver fully integrated, co-engineered solutions that seamlessly connect, protect and analyse data to propel AI-powered innovation for our customers from the edge to the cloud," Skaugen said.

Cisco and Lenovo to boost genAI for customers

Cisco and Lenovo said they will work hand-in-hand to enhance generative AI solutions for their enterprise customers.

This new memorandum of understanding agreement between the two tech companies will deliver integrated infrastructure solutions and services optimised for interoperability to accelerate customers' go-to-market initiatives.

This includes ensuring customers can buy a completely engineered infrastructure solution from a single technology provider.

Lenovo and Cisco will also work to integrate new technologies into Lenovo Digital Workplace Solutions, enabling an improved user experience with enhanced security.

The collaboration will bring together Lenovo's Care of One platform and Cisco technology to deliver unparalleled productivity no matter where work happens.

Additionally, Cisco and Lenovo committed to expanding go-to-market opportunities together that drive generative AI capabilities and boost digital workplace productivity.

These integrated solutions will "provide tremendous opportunities for our joint partners," said Cisco's Jonathan Davidson, general manager for Cisco Networking, in a statement.

"The partnership will be complemented by an expanded network of common channel partners trained in the combined technology portfolio of both companies," Davidson said.

Both Cisco and Lenovo have been investing to drive AI innovation.

Cisco earnings results

The Cisco and Lenovo partnership news comes as both companies reported recent quarterly earnings results.

This month, Cisco released its third fiscal quarter financial earnings results of $12.7bn in revenue, representing a decrease of 13 per cent year over year.

Net income for Q3 was $1.9bn, down 41 per cent year over year.

"Customers are consuming the equipment shipped over the last few quarters in line with our expectations and we are seeing stabilisation of demand as a result," said Cisco's CFO Scott Herron during his company's earnings results.

"The addition of Splunk to our product line will be a catalyst for further growth."

Splunk contributed $413m of total revenue during the quarter.

For its current fourth quarter, Cisco is projecting to generate $13.5bn in revenue. This means the company expects to capture a total of $53.7bn for its entire fiscal year 2024.

Lenovo earnings results

Last week, Lenovo disclosed that it generated fourth quarter revenue of $13.8bn, representing an increase of 9 per cent year over year.

Net income for Lenovo was $248m, up 118 per cent year over year.

"Lenovo's fourth quarter results clearly demonstrate that we have not only resumed growth across all our businesses but that our business momentum is accelerating, driven by the unprecedented opportunities brought by Hybrid AI," said Lenovo CEO Yuanqing Yang during his company's earnings report.

Fuelled by our intelligent transformation strategy and years of investment in innovation, we've built a full stack of AI capabilities and are at the forefront of pioneering the revolutionary AI PC market. Our vision in the AI era is Smarter AI for All."

Lenovo's total revenue for its full fiscal year 2024 was $56.8bn, down 8 per cent compared to $61.9bn in 2023.