NCR, Cisco in Strategic Deal - Analyst Blog


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NCR Corp. ( NCR ) will soon be offering Cisco Systems Inc. 's ( CSCO ) Unified Computing System in the Middle East and Africa ( MEA ). To make Cisco's products available in the MEA, NCR had to attain Data Center Unified Computing Authorized Technology Provider status from the tech giant. The designation was awarded only after completion of the requisite training to sell, deploy and support the Cisco Unified Computing System.

NCR shares a long-standing relationship with Cisco. NCR has been a Cisco service partner and integrator for over two decades.

The growing popularity of NCR operations in the MEA could be the reason for Cisco's choosing it as a technology partner for the region. Last December, NCR announced its plans of launching a range of independent data center design consultancy services in the MEA region in conjunction with a UAE-based information technology and telecom solutions provider Foresight Technologies Pvt. Ltd.

The MEA happens to be one of the fastest growing markets in the world which has encouraged NCR to expand operations there, time and again.

Gartner expects the data center market to grow at a 5-year (2010-2015) CAGR of 18.9% to $176.8 billion in this region. Moreover, Cisco expects IP traffic in the MEA to reach 2 exabytes (a billion gigabytes) per month by 2015, at a CAGR of 52%. Business IP traffic in the MEA will grow at a CAGR of 3%, faster than the global average of 24%. Therefore, the joint effort of NCR and Cisco will allow the companies to grab a large share of this growth.

The close association with Cisco will benefit NCR Corp. in two ways. First, NCR will be able to assist the tech giant in its inventions, which will also help the company to excel in its own technological innovation. Second, NCR's footprint in the MEA region will grow further.

NCR Corp.'s relation with the MEA region started in 1955 when the company opened its subsidiary in Cyprus. A favorable business climate, excellent telecommunications infrastructure, well educated and skilled human resources, favorable tax rates and proximity to the Middle East and Africa markets prompted the company to operate from the island country.

NCR's focus on emerging markets is palpable. A few months back, the company entered into a strategic alliance with Scopus Tecnologia for manufacturing and developing ATMs in Brazil.

As evident from the last quarterly performance, revenue contribution from the emerging regions was up from the year-ago level. We believe that NCR's relentless efforts in the emerging region could result in more stable revenues.

NCR has a Zacks #3 Rank, implying a short-term Hold recommendation.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Symbols: CSCO , MEA , NCR

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