I find Cisco dropping out of hosted email fairly surprising; and not. Zeus agrees with Cisco and thinks the move was logical. I don't. I think the move was financial. And I think it was a short term move with long term ramifications. A sad ending to a potentially great story.
Cisco is a public company. For the past three quarters, it has warned of declining public spending, weaker margins, and increased competition. The stock is currently trading near its 52-week low. There is no doubt of internal pressure to find margin today, not tomorrow; and I am speculating here, but I suspect Cisco email isn't yet the profit center it could be. I've seen it before, bad things happen to good ideas during times like these.
There isn't much more to say about what happened. The bigger conversation is why it's significant.
Enterprise organizations are seriously evaluating the cloud, and trying to determine what, if anything, makes sense to move to the cloud. Email appears to be an application that frequently makes sense. Largely because so many of the users and devices connecting to it are no longer at a headquarters location any more. Google is obviously aggressively courting organizations to move to Google Apps. Microsoft intends soon to launch Office365 with hosted email and Office, and IBM is investing heavily in Lotus Live.
Cisco suggested that email is a commodity, and there is some truth to that. Most email engines offer fairly similar services. But what gets hidden in that notion is how email binds so many applications together. Email today drags calendar and contacts, and office productivity applications. There is also likely a strong correlation to presence and IM. Now we are clearly out of the commodity discussion and we still aren’t done yet--video? voice? collaboration?
Besides the cloud, another top priority in IT is mobility. Seems everyone wants their work to go these days and email is the lynchpin to an organization’s cloud and mobile strategy--or at least it will be soon. RIM was built around email. Remember when iPhone and Android didn't support Exchange--seems decades ago. Email on the smartphone is no longer optional. Social is another topic, and social networking tools also rely heavily on email. Email is the bedrock, with tentacles to every desktop PC, desktop phone, every smartphone, and to a heck of a lot of other things too: faxes, IM logging, social networks, security...
I think Cisco understood this--and decided that email was critical. Cisco obviously went to a great amount of effort to position WebEx Mail as an alternative to Exchange, Notes, and Google. Cisco announced this strategy to great fanfare (11/09), connecting the dots between mobile, the cloud, and communications. The argument was: Expand your email capabilities with next-generation collaboration solutions. These include integrated web conferencing, unified communications, social networking, instant messaging, and more. Cloudify email and collaboration, and premise voice and video. It was a decent strategy, but one that takes time. Cisco's core customers are enterprises and they don't move on a whim.
Responsible CEOs make tough choices when the cash is tight. The music stopped and hosted email found itself without a chair.
I expect over the next few years there will be a giant migration to hosted email, and as far as I can tell, IBM, Microsoft, and Google all agree on that; each of them is making huge investments and improvements in their hosted offerings. So are hundreds of service providers. I also think that collaboration is just starting to get interesting and these email vendors will be working hard to tie collaboration to email. There is plenty of evidence that collaboration won’t be tied to email at all--tablets may be the collaboration winner. There is some correlation between email and collaboration, as I just don't see a Google shop investing in SharePoint.
Cisco dropping email means Cisco is dropping its single-vendor UC vision; voice, video, IM/presence, collaboration, social, and (now) look elsewhere for messaging. That's not that bad, the vast majority of the vendors in this space don't have a complete offering and email is one of the more interoperable components. Instead, Cisco is doing doubling-down on Quad, by moving some of the email staff there. But Quad's success still seems less certain than email; evidently it must be doing well.
Enterprise email has been dominated by IBM and Microsoft--Google's impact on the enterprise is reportedly small, but growing. That growth represents a shift from premise to the cloud, and when you're moving an application is the best time to change it. Also, moving to hosted invites moving away from client/server to HTML. So the timing for Cisco to quit email feels wrong. Another year or two and Cisco's hosted email may have been on more solid ground.
Cisco really had the most complete single vendor UC solution, Microsoft is close but relies on several partners for its hardware. IBM relies on partners for voice, and Google doesn't appear serious (yet). So with no single vendor solution out there, it seems obvious that interoperability and open should be top priorities. Is it?
