Cisco buys WebEx

Cisco buys online collaboration service WebEx in a move seen as increasing the giant's relevance to smaller businesses.

Cisco has acquired WebEx, maker of hosted on-demand collaboration applications, in a move that builds on the network giant's full-court press to lead the unified communications market and target the younger workforce.

According to Cisco, the roughly $US3.2 billion deal is expected to broaden its unified communications vision, mostly within the SMB space.

In a statement, Cisco chief development officer Charles H. Giancarlo said, "As collaboration in the workplace becomes increasingly important, companies are looking for rich communications tools to help them work more effectively and efficiently. The combination of Cisco and Webex will deliver compelling solutions accelerating this next wave of business communications."

Cisco has recently trumpeted its "network as a platform" vision, and according to experts, this acquisition falls right in line with that stance.

"Cisco believes the network is a platform for all forms of communications and collaboration..." Giancarlo said.

Subrah S. Iyar, CEO of WebEx, added: "Cisco and WebEx share a vision of Web collaboration as a key to accelerating business processes and critical to durable competitive advantage. Cisco's global reach and customer focus will help us extend our core Web collaboration applications and continue to broaden the services we offer through the WebEx connect platform."

WebEx's solutions include subscription-based technologies and services for companies to engage in real-time and asynchronous data conferences over the Internet, as well as share Web-based documents and workspaces.

Zeus Kerravala, Yankee Group senior vice president, said the WebEx acquisition -- coupled with Cisco's recent acquisitions of social networking and collaboration vendors Five Across and Utah Street Networks -- gives Cisco an advantage by allowing it to entice a younger enterprise workforce, which will eventually demand this level of functionality.

Kerravala said the WebEx buy is also a slap back at Microsoft for making further inroads in the enterprise. The WebEx deal could be seen as a rival to Microsoft's popular LiveMeeting collaboration tool.

"Everyone talks about unified collaboration, but until now we've only had unified collaboration tools for workers over 40," Kerravala said, adding that the WebEx, Five Across and Utah Street acquisitions further promote the idea of any user collaborating from anywhere. Kerravala called that the "anywhere worker."

"Cisco can build this into the network and make it a service," he said.

As the unified communications market continues to evolve and mature, Kerravala said, companies can expect to see major vendors offering hosted services that are targeted to companies that may not have the resources to run in-house collaboration systems. Cisco already offers a host of collaboration tools, but Kerravala noted they have yet to capture a hosted service like WebEx, which eliminates the need for some companies to shell out massive amounts of money for software and hardware required for in-house systems.

"If you're going to be a unified communications vendor, you not only have to offer a wide variety of tools but different ways to deliver those tools," Kerravala said. "Cisco never had a hosted delivery mechanism. Everything they sold was to companies who wanted to buy it and do it themselves. There was a big chunk of the market that Cisco had kind of left alone."


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