I'm currently at Cisco's Partner Summit in Boston and as I expected, unified computing (the other UC) took center stage. Most of the executive presentations and partner chatter was around the strategic moves that Cisco is making around the data center, UCS and virtualization.Don Proctor, Cisco's software and collaboration guru, kicked off day 2 with some answers to some partner driven questions on collaboration. Here are the main questions that were raised, how Proctor answered them on behalf of Cisco, and my thoughts about the answers.
Question: Why should a partner invest in collaboration now? The question was based on partner comments that UC has been a tough market. Despite the promise, adoption has been sluggish and customer demand doesn't have UC positioned yet as a "need to have." Instead it's more of a "nice to have if I can find the time to deploy."
Proctor's answers: Don gave a multifaceted answer. First, from an overall market perspective he claimed collaboration is a $34 billion dollar market in transition, in which Cisco has a market leadership position. He referenced being #1 in voice, Telepresence and web conferencing. Don also stated that it's the transition of the decade as it encompasses globalization, consumerization, and he said it will change the industry forever.
The second point Don made was that collaboration has become an economic imperative for organizations. Slashing IT and travel budgets has become the norm, and businesses are moving from the physical to the virtual, and collaboration is a core component of this "new business."
My thoughts: On Don's first point, I half agree with these statements. I'm not sure if the $34 billion dollar market is accurate or not but I'll agree it's a really big market. However, much of it is made up of legacy markets such as email and voice. I'll give Cisco market leadership positions in Telepresence and Web Conferencing but there is debate about who has the true #1 position in voice. In my mind, if it's not a slam dunk answer, then no one is #1 (like we have in routers, operating system, etc). Additionally, the other markets that Cisco is #1 in are small parts of the overall market. E-mail is the big piece of the UC pie that Microsoft is trying to drive UC sales through, that Cisco has very little penetration in. Of course, Cisco purchased cloud-based email provider Post Path last year to move into the email market.
Don made some bold claims that Cisco's in a position to own and dominate the collaboration market. If the market stays primarily desktop based I think Cisco and its partners will struggle competitively with Microsoft and, to a lesser extent IBM. If Cisco can move the UC market to a cloud/SaaS based delivery model it can leverage its WebEx position and can dominate and even snatch some of the lucrative e-mail market away from Microsoft through Post Path.
Don's second point, I totally agree with. I think this economy has forever changed the way we work and made some exceptions the norm. Personally, I still think there's no way to really replicate the "in person" experience, but organizations are willing to trade down in meeting experience for the huge cost savings in doing things virtually. It means we need to become accustomed to working at weird hours to collaborate with people in different times zones (although for me its OK since it seems the Eastern Time zone seems to be the default one!!). Webinars, on line chats, video conferences are here to stay, and as companies reorganize business process around them, collaboration and UC will become a strategic imperative. Cisco needs to "prime the pump" here a bit and get some better case studies and examples of how companies have leveraged collaboration to improve the business (outside of just using Cisco as an example).
Question: What is Cisco's vision for collaboration? It seems the impetus for this question was from just the sheer number of vendors claiming to be a UC vendor, including some vendors that dominate their own markets such as Microsoft, Avaya and IBM.
Proctor's answer: Don called Cisco the first full-stack provider for collaboration--desktop, cloud, mobile and integrated into the fabric of the network. Cisco enables collaboration at every layer of the stack. He then further defined what this means by defining what it isn't. Collaboration isn't about editing documents on line (the anti Microsoft and Google statements) but instead defined it as network-as-the-platform + video + intercompany collaboration + technology process culture. He then made the bold claim that "video is the killer app for collaboration."
My thoughts: This part of the presentation was the one part that made me think. Don's comments were true. Cisco is the only supplier that provides UC at all the points he mentioned. The question is, though, where does it matter and how are they positioned? Right now, the desktop is where companies I work with think about UC, and while Cisco has a solution there, it's hard to compete with Microsoft, who has a monopoly on the corporate desktop OS and e-mail platforms. Additionally, while the foundational building block is currently VoIP, I believe presence will replace VoIP as that building block and Cisco's position there, like in email, is poor. However, like e-mail, Cisco acquired its way into this market with Jabber and could gain some share through a transition to a SaaS delivery model.
Question: What's going on with HP and Microsoft? This question was obviously driven by the partnership news that HP and Microsoft announced at Interop.
Proctor's answer: Don reiterated the standard line Cisco likes to give on how they compete and partner, but then did throw out some barbs of his own. He pointed out how both Siemens and Nortel drew close alliances with Microsoft and that really hasn't worked out for either company. Outside of that though, he did make some good points about how this does validate Cisco's claims that you can't build a world class collaboration platform unless you have a world class network.
My thoughts: I agree with Don on these points. I think the need for Microsoft to do this was based on the fact that when you put real time traffic on a network, the network itself does matter. I remember an early demo that Microsoft did of OCS where the presenter set up a call and then did a bunch of stuff to the network and the call still worked fine indicating that the network had no relevancy. That might work in a small, two phone environment but any kind of large scale deployment does need network engineering. My first thoughts surrounding the partnership between HP and Microsoft were that it was in contradiction to Microsoft's original go to market of "the network doesn't matter." However, I really don't think HP-Microsoft changes the competitive landscape enough to tip the scales in anyone's favor.
Overall I agreed with most of what Don said but I think he missed an opportunity. This was a point that Don alluded to a couple of times but I thought this should have come across stronger as one of the main competitive differentiators for Cisco.
