Competitive Strengths and Weaknesses
In working in close partnership with both Microsoft and Cisco, Fiona Lodge, Group SVP of CX & Digital Workplace Solutions at Dimension Data, has observed a number of trends around the two companies' competitive market stances.
For example, Microsoft excels in the SMB space and has seen good traction in mid-market, while Cisco still dominates the enterprise space. But even here, most enterprises already have a Microsoft Office 365 E3 license, which means that they effectively have a voice license in addition to the Cisco assets they hold. For some businesses, E3 is sufficient, Lodge said, but for a lot of enterprises, the perceived quality and reliability of Microsoft voice doesn't meet their requirements.
Cisco's advantage is that it really does understand voice and video, Lodge said. "Cisco spent 15 years going through that learning curve and has solid expertise at delivering high quality voice and video."
Additionally, most networks run on Cisco hardware. "Until and unless Microsoft invests in tighter integrations to the networking layer, Cisco will always have an advantage when it comes to quality," she said. Another strength in Cisco's corner is its "huge existing and loyal installed base," she added. "In today's fast-changing SaaS world, you'd expect that clients would be less worried about who the vendor is, but we have clients coming to us saying, 'We want UCaaS, but we want it on Cisco.'"
Fasciani pointed to Cisco's strong hybrid model as one of its top strengths. "It does cloud-to-prem connectivity better than anyone in the market," he said. And both he and Lodge pointed to Cisco's Collaboration Flex plan, which provides a good commercial bridge between prem and cloud, as a positive. "It's a really smart approach to easing the cloud transition," Lodge said (and based on what I learned in talking to Cisco executive leadership, we can expect to see similar flexible options for the contact center in the near term).
Cisco Collaboration's Next Act
All this said, Cisco remains a "fast follower" -- a typical incumbent position, Nolle said. "Cisco will wait until it sees something taking off and take advantage of existing assets to be a fast follower and dominate the space."
The industry experts I spoke to for this piece all have different perspectives on what are the critical success factors for Cisco as it evolves around cloud, software, subscriptions, and AI. For example, Frost & Sullivan's Popova said she believes Cisco needs to keep its eye on the essentials of stability, reliability, and security, in addition to working to better enable the service provider community and speed up its innovation around things like AI and machine learning (ML). Kerravala also said he sees AI as being a critical component of Cisco's path forward, and added to that the necessity of continuing to develop its hybrid strategy.
Nolle suggested that blockchain could be a game changer for Cisco if it approaches it right, but stressed again that it needs to focus on a new model for collaboration that addresses both the underlying object being collaborated on as well as the act of collaboration.
Lodge said she would like to see Cisco continue to invest in simplifying the end-user experience, while developing its partnerships with Microsoft, Google, and Apple, and Fasciani suggested adding a more strategic relationship with Slack to the picture as well. In addition, he said, making Webex more affordable for informal meetings may be key to growing its leadership in the meetings market.
Whatever the next act for Cisco Collaboration ultimately is, Rosenberg told me that he believes "fantastic execution" is the most important thing for the company. With BroadSoft now under its wing and being folded into the business, Webex (Spark) on a new path, and AI/ML being leveraged to provide better experiences with Collaboration products, there are plenty of things to watch closely as Cisco moves further into its FY2019.
For more insight from Cisco Collaboration's executive leadership on where the priorities are for individual business segments, see the companion piece, "New Execs Eye Change at Cisco Collaboration."
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