Cisco and Webex: It Takes Two to Tango with MicrosoftBy Paula Musich | Posted 2007-03-15 Print
Cisco's plans to buy Webex will create a complicated relationship with Microsoft where the two giants must both cooperate and compete.
Cisco Systems' planned $2.9 billion acquisition of leading Web conferencing provider Webex sets up a complex and interesting dance between itself and Microsoft as both vendors work through the need to both cooperate and compete in the same customer accounts.
Cisco will compete directly with Microsoft in the Web conferencing and shared applications market, where it is likely to gain the upper hand thanks to Webex's dominance with its subscription-based collaboration offerings.
Webex in the collaboration services market has "over 65 percent market share over the number two Microsoft and Citrix in third place," said Webex Chairman Subrah Iyar in a conference call on March 15.
The Webex online conferencing and application sharing technologies bring strong synergies to Cisco's Unified Communications initiative, where both Cisco and Microsoft are escalating their competition.
"Unified Communications is the only area in which we're competing," acknowledged Charlie Giancarlo, Cisco's chief development officer. "But at the same time we've heard loud and clear from customers that we need to interoperate. In 10 percent of the cases we'll still be interoperating where we're also competing."
Cisco in fact earlier this month announced it will expand Microsoft interoperability to allow its Unified Communications products to work with Microsoft Exchange 2007, Microsoft Live Communications Server 2005 and Microsoft Office Communicator.
But industry analyst Jan Dawson, at IT consulting and market research firm Ovum, does not view it that benignly.
Dawson, vice president of the London company's U.S. Enterprise Practice views the acquisition as the latest "front in the war between Cisco and Microsoft over Unified Communications. This allows Cisco to leapfrog into first place in the Web conferencing space, ahead of Microsoft in the second spot," said Dawson.
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