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Cisco May Have to Up Tandberg Bid

As reported in multiple places, a group of Tandberg shareholders are saying they'll reject Cisco's $3 billion bid to acquire Tandberg unless Cisco raises its offer (this GigaOm post has reaction from Cisco.As the GigaOm post suggests, if the Cisco-Tandberg deal did fall through, attention would immediately shift to Tandberg's rival Polycom (Melanie Turek suggested on No Jitter last week that Cisco-Tandberg would put Polycom in a strong position). Would Cisco wind up in a bidding war against other enterprise communications players to acquire Polycom?

Polycom would certainly be a different sort of match for Cisco than Tandberg represents. Acquiring Polycom would make Cisco the powerhouse not just in videoconferencing, but in communications endpoints generally. Polycom is a leading SIP phone vendor, a market where Cisco also is strong, and via its 2007 SpectraLink acquisition, Polycom is also a heavyweight in enterprise wireless (a market where No Jitter's Michael Finneran has recently leveled harsh criticism at Cisco).

Shifting to a Polycom acquisition would also create come interesting dynamics with Microsoft. Among other things, it would make Cisco the licensee of the tabletop video endpoint that began its life as the Microsoft Roundtable. Microsoft turned over the sales of the Roundtable--but not the intellectual property--to Polycom earlier this year, and Roundtable was re-branded the Polycom CX5000. The unit is intended for participants sitting around a conference table, and dynamically switches the image it sends out based on who's speaking. Presumably that deal wouldn't survive a Polycom acquisition by Cisco. Nor would a Cisco-owned Polycom likely continue to manufacture the Microsoft reference design for OCS deskphones, generically dubbed "Tanjay" by Microsoft.

What do you think? Will Cisco sweeten its offer for Tandberg? Go after Polycom? Or neither?