For all their protestations of cooperation, we have seen how Cisco and Microsoft are increasingly gearing up for a war for control in unified communications with the former allying with IBM and Nokia, and the latter with Nortel and Motorola.
And the past week has seen the two giants added further weapons to their arsenals, with Cisco acquiring WebEx and Microsoft TellMe. The former deal pitches Cisco more directly against the core of Microsoft’s UC push, its Live family of products; while TellMe enhances Microsoft’s mobile and voice capabilities and also shores up its defenses against Google, which will claim its own place in the UC sun using the disruptive techniques of the internet, such as open email and messaging. But this is not just a fight for the vendors, also needing to make some critical decisions are the service providers, mobile or converged, which have to create a UC offering of their own that will be strong enough to persuade enterprises to entrust such a strategic change to a third party, or at least give the operator a key role in the value chain. In this respect, Ericsson, more than any other vendor, is positioning itself to be the operator’s friend in leveraging UC to gain greater enterprise influence, and last week it made an acquisition of its own to help with this goal, of messaging company Mobeon.
The move to integrate all forms of messaging and mail, whether wired or wireless, within a common IP-based platform will not only enhance communications but underpin many new business processes and customer-facing activities for large and medium corporations, making it highly strategic. Many companies will use steps towards UC as the foundation for broader moves towards mobile enterprise, all-IP convergence and Web 2.0 or Web 3.0 techniques, which over time will affect all their core applications and have the potential to revolutionize their businesses.
In this scenario, the network and the application come together as never before, leading to a stand-off between those traditionally focused on the software, like Microsoft, and on the network, like Cisco. Both will need to fill the gaps in their overall skills and product line that arise from their different heritages, and can be expected to make many more acquisitions and alliances over the coming months.
Cisco’s $3.2 billion purchase of WebEx is a highly significant one, putting the networking supremo on a far more level playing field with Microsoft in some of the Windows giant’s key areas of focus. Cisco needs to follow the mobile network vendors, which now invest 75% of their R&D, and gain most of their differentiation and margin, from software associated with their infrastructure. While the routers and switches will remain the foundation stone of Cisco’s huge control over many corporate accounts, it will be the software platforms and middleware that will give it real growth and boost its profitability going forward, as well as giving it influence over the very underpinnings of corporate IT strategies.
Although WebEx is best known for its web conferencing and collaboration tools, its other offerings are more interesting in terms of Cisco’s challenge to Microsoft. These include, WebEx Media Tone Network (MTN), a platform for secure delivery of on-demand applications, and with the resources of Cisco behind it makes it capable of being turned into a core element of a corporate system. This will compete head-on with what Microsoft is trying to build with its collection of services under its Live brand.
WebEx also brings WebOffice, which runs on MTN and provides document sharing, calendars, databases and web meetings, and is similar to Microsoft’s recently introduced Office Live solution. Both are geared to the smaller company, but capable of being enhanced to take part in large enterprise systems too, particularly through integration with the vendor’s larger products. WebEx conferencing with Cisco Telepresence for instance. WebEx AOL/AIM Pro Business Edition provides group chat, VoIP capabilities, centralized administration, secure file transfers and integration with Outlook and will offer a similar set of capabilities to those planned for the upcoming Office Communications Server 2007, Office Communicator Client and updated Outlook.
AOL/AIM Pro Business Edition also integrates with WebEx business applications that are part of WebEx Connect, to create the sort of collaboration Microsoft is building between its Dynamics customer relationship management and ERP applications, its online services and its UC platform. Various partners, such as SugarCRM, have adapted their apps for WebEx Connect collaboration and hosted services.
All this shows Cisco pursuing its usual strategy of creating an end-to-end product that it sells to large companies on the basis that a one-stop shop will offer assured integration and security in every element – although it remains to be seen how WebEx will be positioned alongside the newly signed agreement to resell IBM Lotus Sametime, which also includes web conferencing features.
As Cisco and Microsoft both build up their portfolios they will add real time collaboration on mobile platforms, which will be fundamental to business processes and methods in the future, and is a foundation of ‘Web 3.0’, the more enterprise oriented evolution of web tools and usage techniques that is evolving in parallel to the heavily consumer focused Web 2.0.
The two have many elements in common however, notably a reliance on user generated content, on-the-fly collaboration and a new breed of dynamic, multimedia interfaces and communications methods, and the use of applications that are associative and adaptive in nature.
In Web 3.0, applications become entirely network related, and companies like Cisco will need to increase their control of access and navigation mechanisms too, as these become more fundamental to the experience. This leads many analysts to expect Cisco to make a move into search soon, potentially leading the way to a far more inherently network-based search system that could leapfrog the engines of Google and others in the enterprise Web 3.0 market.
That takes Cisco head to head with Google but essentially that is a battle for another day. For now, Google’s target is Microsoft, something it at least has in common with Cisco, and Microsoft’s own new acquisition, of privately held TellMe Networks (for an undisclosed sum rumored to be around $800 million), is designed to boost its defenses against both companiesas well as challenge Nokia.
Eight-year old start-up TellMe provides mobile search services via audio prompts in the US on a freephone number and delivers information on businesses, driving directions, sports scores, stock quotes, weather, news, movie show times and more. Tellme also licenses its speech technology to third parties for other applications.
TellMe adds new speech recognition capabilities to Microsoft’s Live family and both companies believe speech is under-used as a way to access information, locate people and enhance business processes. The new deal gives Microsoft a new weapon against Google, since it is now highly likely to combine mobile search with its web advertising technology, adCenter, to enable carriers to provide free voice services such as directory assistance.
In the short term, Microsoft said it would use TellMe’s technology to offer speech-based communications, mobile search and voice access to Vista, Office, Windows Mobile and Windows Automotive. Microsoft developers will be able to use the technology for their own applications.
Essentially this shows Microsoft and Cisco beefing up what might have appeared haphazard collections of UC elements to create a coherent and enterprise class harmonized framework.
And the most aggressive supplier in trying to ensure that such offerings from Microsoft and Cisco do not get very far with carriers is Ericsson, which is bolstering its own arsenal to create all-IP frameworks for carriers offering enterprise UC as well as multimedia quad play services.
The Swedish giant is on its own wave of acquisitions, the latest being fellow Swede Mobeon, an IP messaging specialist, for an undisclosed sum. Mobeon will become part of Multimedia, Ericsson’s newest business unit, set up early this year to spearhead a new focus on growth markets in content management and quad play, and to extend the company’s important managed services business into new sectors.
Jan W’reby, head of the new unit, said IP-based voice and video messaging is “an important part of our networked media and messaging strategy ‘ it will allow operators to offer an enhanced multimedia messaging experience to their customers.” The company will look for a unified communications range as comprehensive as Cisco’s, but geared to enterprise oriented carriers, as well as to media providers that want to incorporate messaging and two-way communications with traditionally one-way offerings like broadcast.
Ericsson says Mobeon has about 30% of the installed base of Messaging over IP systems, with its nearest competitor being Openwave. Mobeon was formed in 2001, but Ericsson took a stake in May 2003 when it transferred its IP voice messaging business to the company. The most recent version of the firm’s software, CompEdge, extended it beyond voice to include SMS and MMS.