At Cisco's 2014 Collaboration Summit, Collaboration Technology Group (CTG) General Manager, Rowan Trollope was asked what success for him and the CTG group would look like a year from then (which is now). Rowan said, half jokingly, that success would be that the group would see 10% growth and he would still have a job.
At the time, CTG had seen consecutive years of falling revenues and the promise of 10% growth seemed unrealistic if not Pollyannaish. However, the group has been on quite the roll since then. It's seen four consecutive quarters of growth (including 17% growth in this past quarter), the launch of its workstream communications and collaboration (WCC) solution, Spark (profiled in the joint ZK Research/TalkingPointz Report), and the acquisition of one of the leading Communications Platform as a Service (CPaaS) providers, Tropo.
Today, Cisco made another move to continue the CTG's momentum, announcing it plans to acquire online collaboration platform provider Acanofor a hefty $700 million. Adding London-based Acano to its already broad product line will certainly be accretive to the business from a top and bottom line perspective and should open up new opportunities for Cisco, particularly with the Lync/Skype for Business base of customers. Also, because Acano is headquartered in Europe, Cisco can use its huge pot of overseas money for the acquisition and continue to use domestic currency to bolster shareholder value through share buy backs and dividend payments.
Acano was founded in 2012, and in the few years it has been in existence it has gained significant momentum. Acano's platform was built with three key criteria in mind: scalability through software, multi-vendor interoperability, and multi-device connectivity.
Unlike many of the video and collaboration startups that focused their energies on serving the needs of small businesses, Acano came out of the blocks trying to solve the challenges of the largest organizations in the world. When TalkingPointz principal analyst Dave Michels and I interviewed Acano for our WCC report earlier this year, the company told us they have over 800 enterprise class customers, including four of the five top investment banks and five of the top 10 asset management firms. These are big companies with big challenges when it comes to rolling out collaboration solutions company-wide. Acano also has over 2,000 customers using an Acano-powered service through its 25 service provider partners.
Acano has a highly scalable platform, available as a dedicated appliance or virtualized software, that supports both transcoding and switching where appropriate, making it very flexible. Customers can procure Acano's product and deploy it as a premises-based solution or can buy it as a cloud-based solution from an authorized service provide. Additionally, service providers can support a hybrid deployment model where the cloud- and premises-based infrastructure can interoperate.
The combination of hardware appliances and virtualized software gives Acano incredible scale. Customers can start with a small, software-only solution, and then rapidly scale up to tens of thousands of users and Acano virtual meeting rooms, called coSpaces (similar to a Spark room), while maintaining a high quality audio and video experience. Acano's software-based, highly scalable solution is ideally suited for the trend that has organizations becoming more regionally dispersed.
Because Acano's initial go to market was with large enterprises, it had to engineer a product with the assumption of multi-vendor interoperability, particularly with Microsoft's Skype for Business. Given that Cisco and Microsoft have been mortal enemies in the area of collaboration, it may seem strange that Cisco would want a product that has much of its installed based built on Microsoft.
However, today's Cisco isn't your father's Cisco. Over the past few years the company has made it a priority to build products that are open and interoperable. Evidence of this is in security, the WAN, and data center; this makes collaboration interoperability much easier. In every conversation I've had with Rowan Trollope since his arrival to Cisco, he has discussed the importance of being open and interoperable, and now he is putting Cisco's money where his mouth is. The ability to easily drop into a Microsoft Skype for Business deployment will be good for customers and remove a significant barrier to entry for Cisco.
For Acano, this is a good time to be brought into the Cisco fold. As I mentioned, Acano's focus has been to sell into large enterprises. It has taken a "land and expand" strategy, in which Acano is initially used for scaling multi-vendor video; then Acano looks to sell in its broader coSpaces solution after. Cisco's massive channel and high touch sales force can accelerate the expand part of the strategy. Cisco's channel will also help Acano scale down market to mid-size enterprises that have similar video scaling and interoperability issues.
The acquisition of Acano marks the return of Acano's CEO, OJ Winge, to Cisco. OJ has extensive experience in the video industry from his days at Tandberg and Cisco, leaving Cisco in 2012 for Acano, and now returns to his old stomping grounds, much wealthier given the price tag for Acano, but also more experienced in building a product designed for a mobile-first, cloud-centric world, which aligns nicely with CTG's vision.
One last interesting element of this news is how the roadmaps of Acano's coSpaces and Cisco Spark will come together. Both are excellent WCC solutions, but there is a fair amount of overlap between the two. I haven't learned yet how this might evolve, but I suspect Cisco will take the best of each and bring the two together. Given that both are software-only solutions, this task should be something Cisco can do relatively quickly.
The combination of Cisco and Acano enables Cisco to deliver multi-vendor video any way the customer chooses -- in the cloud or via a hybrid model. We all know that Cisco licked premises-based deployments years ago, but WebEx, HCS, Spark, Tropo, and now Acano give Cisco the broadest cloud-first portfolio in the UC industry.
Related content you might be interested in: Dave Michels interviews Cisco's CTG head Rowan Trollope
Follow Zeus Kerravala on Twitter and Google+!
Zeus Kerravala on Google+