Zeus Kerravala
Zeus Kerravala is the founder and principal analyst with ZK Research. Kerravala provides a mix of tactical advice to help his...
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Zeus Kerravala | September 23, 2010 |


Cisco's Unified Communications Strategy for the Next 12 Months

Cisco's Unified Communications Strategy for the Next 12 Months I expect Cisco to use its next fiscal year to stretch its lead over its archrival, Microsoft, focusing on video, social networking and cloud based UC.
ALSO: Brian Riggs weighs in on the controversy: Commenting on the Commenters

I expect Cisco to use its next fiscal year to stretch its lead over its archrival, Microsoft, focusing on video, social networking and cloud based UC.
ALSO: Brian Riggs weighs in on the controversy: Commenting on the Commenters

Those who follow Cisco know that the company's fiscal year runs August through July, meaning it’s a whole new year for them. I happened to be on the Cisco campus last week and met with a number of individuals that are involved in Cisco's UC and C strategy to discuss what the next 12 months would look like for Cisco in this market. Many industry followers, myself included, believe that Cisco has done a good job of leading this market and will be one of the main companies to watch moving forward, so Cisco's strategy should be something we're all aware of.

Historically Cisco has been all about "catching market transitions", that is, focusing on markets with no true market leader early, inserting themselves as an enabler of the transitioning stuff and then being in a leadership position when it's mature. It's worked for them time and time again and there’s no reason to assume that it won't be a successful strategy moving forward.

Cisco has three main focus areas next year:

* Pervasive video
* Social networking
* Cloud based UC

Looking at each one individually:

Pervasive Video
This should be no surprise to anyone. Cisco has invested billions of dollars into video. It acquired Tandberg, acquired Flip, released a video enabled tablet and although it did not invent TelePresence it certainly legitimized it as a critical component of UC. The value to Cisco is obvious. Video chews up gobs and gobs of bandwidth. More bandwidth equals network upgrades. Despite all of the advanced technologies Cisco has, network infrastructure makes up about half of Cisco’s revenue (and also carries fat margins) so pervasive video would mean a huge boost to Cisco's top and bottom line.

Now, is the world ready to replace every voice call with video? It seems to me that we've heard this story before. Y2K, 9/11, the economic struggles in 05, etc. It seems every few years we declare this to be the year of video and it turns out to be more mouth-share than actual customer mindshare.

So, do I think it will be different this year? I'm guessing it will be improved but not the huge uptick that Cisco is expecting. Now don't get me wrong, I personally believe that video communications are better than voice only. However, I’m not so sure the market and buyers are ready. Much of Cisco's success for their FY11 in video will be their ability to explain to the customer when and how to use all the different types of video effectively.


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