Cisco Systems is once again stepping on its partners' toes and taking on new rivals as it adds new capabilities to its suite of unified communications products and services.
On Monday, the company will announce several new and enhanced software tools for instant messaging, e-mail, social networking, videoconferencing, document and video sharing. Some of these new products will compete directly with similar products offered by Cisco partners, Microsoft and IBM.
Cisco is taking direct aim at Microsoft with a new corporate e-mail service called Webex Email. Cisco has combined technology from its acquisition of Postpath with its Webex conferencing service. The combined offering gives corporate users access to their Outlook e-mail from any browser. The new service puts email in the "cloud" and eliminates the need for Microsoft Exchange servers.
Cisco already competes with Microsoft in the unified communications market. In fact, the two companies are strong rivals here. But Microsoft has had an advantage over Cisco with its strong presence on the desktop.
Competition between Cisco and Microsoft started to heat up earlier this year, when Cisco took its WebEx Web conferencing service into the cloud. At that time, Cisco executives said there was a possibility that Cisco would compete directly with Microsoft's e-mail Exchange platform.
As for the online collaboration market, Cisco and Microsoft aren't the only ones developing solutions. Google also offers document creation and sharing online. But so far those services haven't gotten much appeal outside of the individual consumer market. And it has yet to take shape in the enterprise market. And of course, Google already offers Internet-based e-mail through Gmail. IBM, another major Cisco partner, is also trying to get into Web-based e-mail market with its product iNotes.
As part of its blitz of collaboration announcements, Cisco also announced several other products and enhancements to its unified communications line-up, including some new social-networking tools and enhancements to its video conferencing and high-end telepresence solutions.
On the social-networking side, Cisco has developed a YouTube-like service called Cisco Show and Share that allows users to create, edit, and share video content. It is also introducing the Cisco Enterprise Collaboration Platform, which creates a sort of Facebook for corporate users. The tool includes the ability offer blogging, wikis, team pages, and instant messaging on an internal social networking site.
Other new products include the Cisco Intercompany Media Engine. This product allows users from different companies to communicate and collaborate with each other over a secure network connection.
On the video side, Cisco is introducing the Intercompany Cisco Telepresence Directory, which allows users to see who is available for video chats. The company also added the ability to allow Webex users to click to make video calls to users in a Cisco Teleprresence room. These video conferencing rooms are high-definition video conferencing purpose-built rooms that often cost about $300,000. Cisco also said it has tweaked its telepresence product to allow it to work with equipment from competitors, such as Polycom and Tandberg.
Cisco is currently trying to acquire Tandberg for $3 billion. But Tandberg's shareholders recently said they would reject the offer if Cisco didn't increase its bid.
HP Skyroom software
(Credit: Hewlett-Packard)SAN FRANCISCO--Looking to take advantage of tightened corporate travel budgets, Hewlett-Packard on Tuesday showed the latest tech to come out of its labs, called Skyroom.
Unveiled together with Intel at the start of the Intel Developer Forum here, Skyroom is a real-time collaborative video conferencing and whiteboarding tool. HP CEO Mark Hurd hinted at the product when he spoke at Fortune's Brainstorm conference in July.
Skyroom allows colleagues in separate locations to make video calls and share videos, 3D applications, documents, and more in real time. Using an advanced video codec, rich applications and video are compressed and shared over a standard network, and intended to run as smoothly as if they were hosted on the user's local desktop. Cisco offers similar software with its WebEx brand.
Some of the more advanced teleconferencing software used now requires special equipment and often a specific room. Skyroom is supposed to work "more like a phone call or IM," Jeff Woods, the head of marketing for HP's workstation division said Tuesday.
At $149, and no subscription fee, it costs less than a round-trip airplane ticket from pretty much anywhere, as Woods noted. It's available immediately to both business users and consumers as a download on HP.com. But customers who buy an HP workstation notebook or desktop will get the software included for free. Commercial notebook buyers will get a 90-day free trial version.
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As Cisco Systems adds more functionality to its online WebEx conferencing service, it's ratcheting up the competitive pressure against partner and rival, Microsoft.
Cisco held a press event Tuesday to discuss how it plans to add more to its WebEx service. As the company includes more software into the conferencing service, it is competing more intensively and directly with one of its major partners, Microsoft.
"As Cisco expands this business, the co-opetition between Cisco and Microsoft will only increase," said Zeus Kerravala, an analyst with Yankee Group. "Microsoft is strong on the desktop and Cisco is taking a lot of these software functions into the cloud."
WebEx is a leading Web conferencing service that Cisco bought in 2007. This was Cisco's first foray into offering a service. And the product has been very successful. As a result, the company has used the service as the foundation for its emerging big business collaboration tools. Cisco has also recently bought two other companies that it plans to feed into the service.
Primarily, Cisco is adding more unified communications functionality to the service it calls WebEx Connect. This is an extension of the Web-based video conferencing service that also includes instant messaging and presence. Using technology from Jabber Cisco will add even more presence functionality. And through the acquisition of PostPath, it will add e-mail into the mix.
Cisco already competes with Microsoft in the unified communications market. In fact, the two companies are strong rivals here. But Microsoft has had an advantage over Cisco with its strong presence on the desktop.
Now Cisco is taking these services into the "cloud," where the company can leverage its existing expertise with WebEx to provide a virtual solution for its corporate customers.
But Cisco isn't just stopping with unified communications. The company is also in the early stages of offering document, spread sheet, and presentation creation and sharing as part of WebEx. These are very clearly areas where Microsoft has a strong foothold and a very strong business. The company's Office suite, which includes Word, Excel, and PowerPoint, is part of its business productivity portfolio. And Microsoft makes a lot of money from this software, about $60 billion of its sales during last fiscal year came from these products.
But Alex Hadden-Boyd, director of marketing for the collaboration software group at Cisco says that Cisco has no intention of going after Microsoft's core Office business. Instead, she said that Cisco is more interested in providing collaboration tools online that groups can use to create and share documents, spreadsheets, and presentations.
"If you look at WebEx Connect today, we already have the beginnings of this," she said. "We have team spaces with shared files and wikis. So we are already well on our way down that road. But we are not focusing on productivity applications or individuals such as re-creating Excel or PowerPoint."
"We are using our existing resources and we have no intention of creating the next Word application for individuals," she added. "We simply are trying to make it easier for work groups to share documents in a team space."
Yankee Group's Kerravala agrees that it doesn't make much sense for Cisco to try to compete against Microsoft's Office products at the desktop level.
"Cisco is not going to take on Microsoft head-to-head on the desktop," he said. "And the reason is simple. They know they'd lose. But Cisco has invested in the cloud and service technology that allows them to approach it differently."
That said, Hadden-Boyd said she does see competition increasing between Cisco and Microsoft in the overall collaboration market. She said the two companies will continue to compete aggressively in collaboration software such as IM and conferencing. Microsoft already offers IM and conferencing and is working on Web-enabling its Office applications.
But Cisco could some day compete head-to-head with Microsoft's email Exchange platform with its new e-mail service from PostPath.
"We could see that as a possibility," Hadden-Boyd said. "We could see businesses using PostPath for e-mail instead of Exchange."
As for the online collaboration market, Cisco and Microsoft aren't the only ones developing solutions. Google also offers document creation and sharing online. But so far those services haven't gotten much appeal outside of the individual consumer market. And it has yet to take shape in the enterprise market.
"Google is the wild card here," Kerravala said. "People are expecting Google to get into the enterprise market. And I see it possibly taking off with a younger kind of worker. But Google has never monetized anything outside its advertising revenue. So it will be interesting to see."
Correction, 2:02 p.m. PST: This story misstated the number of Allin's businesses being acquired by Dell. It is two.
Dell has acquired Allin's Microsoft IT consulting business, as well as its collaboration and business applications services business, in a $12 million stock deal.
The acquisition, announced Friday, aims to bolster Dell's consulting work in the areas of designing and implementing scalable networks and application architectures via Allin's technology infrastructure business, as well as in the areas of collaboration and business applications.
"The expertise we gain from Allin further deepens our ability to help customers exploit Microsoft technologies for business advantage," Stephen Murdoch, vice president of Dell's Global Infrastructure Consulting Services, said in a statement.
The acquisition will further increase , as a means to further sales of its hardware.
The acquisition does not include Pittsburgh-based Allin's interactive media and business process consulting units.
As Wall Street struggles to redefine itself, Cisco is busy this week introducing its latest wave of collaboration products to compete with Microsoft, IBM and Oracle.
"It's a major launch for us, including a comprehensive update to our Unified Communications platform, a new collaboration client for WebEx and Telepresence Expert on Demand," said Rick McConnell, vice president and general manager of Cisco's Unified Communications division.
Cisco's Unified Communications release 7.0 adds support for Windows Mobile, in addition to Symbian and Blackberry. iPhone support is in the works, McConnell said, but Android support is not planned at this point. It also interoperates with collaboration suites from competitors such as Microsoft and IBM. McConnell said that the software suite no longer requires a router for connections from a remote location, such as a home.
WebEx, the Web conferencing service that Cisco acquired in March 2007 for $3.2 billion, has been turned into a Web applications platform. WebEx Connect includes e-mail, calendaring, team spaces, bookmarking, and document sharing, and integrates with the Unified Communications portfolio. Like Salesforce.com, Facebook and other Web platforms, WebEx will allow third parties to build applications (widgets) that integrate with the platform and sell them through a marketplace. Cisco plans to add soft phone, video phone, speed dialing, and federated presence widgets.
PostPath and Jabber, two recent Cisco acquisitions, will be build into WebEx Connect for e-mail and instant messaging in the coming months, McConnell said. WebEx will be priced in the sub-$10 range per seat per month.
The WebEx platform.
(Credit: Cisco Systems )Cisco has also found a way to make its high-end, $300,000 TelePresence videoconferencing product more attractive to large corporations with multiple locations. Telepresence Expert on Demand provides integration with the Cisco Unified Contact Center, dealing with scenarios in which an expert can be summoned to a session. For example, a bank branch could call upon an expert in financial planning to meet with a customer via Telepresence.
"With the Telepresence system installed, you hit speed dial, which integrates with the Contact Center and rounds up an expert to address questions," McConnell said.
Most of Cisco's $40 billion in revenue comes from selling infrastructure to power networks and data centers. Don Proctor, senior vice president of Cisco's software group, called collaboration the "next phase of the Internet" and a $34 billion market opportunity. It's clear that Cisco hopes to bundle its communications hardware and software, creating collaborative infrastructure in a box, as it goes after more share of market and mind with its growing product portfolio.
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Cisco Systems is bolstering its unified communications and collaboration portfolio with the purchase of a corporate instant-messaging company.
On Friday, the networking giant announced it will purchase Jabber, which uses an open-source IM and presence protocol used by Google Talk and Gizmo. The company didn't disclose financial details.
In essence, Jabber's technology allows multiple IM platforms to "talk" to each other. This means that it allows people using tools such as Microsoft Office Communications Server, IBM Sametime, AOL AIM, and Google to send messages to each and get presence information about one another.
Jabber's technology is already used by some large companies including AT&T, BT, EarthLink, FedEx, and JP Morgan.
The deal will help Cisco compete even more aggressively against Microsoft in the unified communications market. And it will fit nicely with some of Cisco's previous acquisitions including the purchase of Web conferencing company WebEx.
Cisco expects to close the deal in the first half of 2009. Jabber's 50 employees will join Cisco's Collaboration Software Group.
Cisco Systems announced Wednesday plans to acquire e-mail and calendaring software maker PostPath in a $215 million deal.
The acquisition, which is scheduled to close by the end of October, is designed to bolster Cisco's collaboration portfolio by including PostPath's Linux-based e-mail and calendaring software with Cisco's "software as a service" platform.
Cisco's collaborative platform includes instant messaging, voice, video, data, document management, and Web 2.0 applications. PostPath will be folded into Cisco's Collaboration Software Group.
"The acquisition of PostPath complements our strategy to develop an integrated collaboration platform designed for how we work today and into the future, providing real productivity gains and a more satisfying user experience," Doug Dennerline, Cisco's Collaboration Software Group senior vice president, said in a statement.
Over the past two years, Cisco has focused on the collaboration market, with CEO John Chambers touting it as the next wave of innovation in the technology arena.
A major piece of that effort has been Cisco's last year. PostPath's technology will be used to enhance the current e-mail and calendaring capabilities of the WebEx Connect collaboration platform.
There's no doubt the battered economy is affecting technology bellwether Cisco Systems, but the company is looking to the future with plans for big investments across its portfolio in "adjacent markets."
On Tuesday, Cisco reported that earnings for its fourth fiscal quarter 2008 were up 4.4 percent to $2.0 billion on revenue that climbed 9.9 percent to $10.36 billion. The results were in line with analyst expectations, but were a far cry from the company's results during some of its best quarters when the economy was strong and healthy.
As for the future, Cisco's CEO John Chambers said he expects Cisco to continue to be affected by the downturn in the economy, and he projected sales would grow by about 8 percent in the first fiscal quarter and by about 8.5 percent in the second fiscal quarter.
He declined to give guidance for the second half of the fiscal year, because he said the economic outlook is likely to change in the next six months. Still, Chambers reaffirmed his long-term guidance for the company of growth between 12 percent to 17 percent a year.
While the company waits for the economy to turn around, Cisco is preparing to make heavy investments in new markets to prepare itself for when customers begin spending again.
This means that the company will invest in new markets that are adjacent to existing product lines in all its major customer segments from the home network to the data center, from small and medium businesses to the enterprise, and from its commercial businesses to the service provider market, Chambers said.
"We'll partner big to big, and acquire big to small, or big to medium," he said. "So you could see us partner with an IBM or a Microsoft or an Intel. And we'll acquire more like a Scientific Atlanta or a WebEx. My favorite kind of company to acquire is one with 100 engineers who have a hot product they are just about to release."
Cisco has weathered several economic downturns in the past. And in the past when times have been tough, Cisco has ramped up investments in new markets to fuel growth for the future. So far the company has executed this strategy extremely well, spawning several new revenue streams that have gone on to become revenue generators. For example, Cisco's unified communications business and its IP telephony businesses were areas where Cisco invested during previous downturns. And today these businesses are paying off generating a significant amount of revenue.
This time around, Chambers says he already sees the next technological wave.
"Web 2.0 and collaboration will be the biggest drivers for our business over the next five to 10 years," he said.
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