Cisco gears up for a platform fight

Cisco has long been the covert superpower of the information age, quietly providing multiple tiers of the critical infrastructure that supports Internet communications. But recently, there have been signs that this titan of IT wants to be more than just a backroom player, and that it is arming itself for a series of punishing battles with higher profile vendors.

Much of Cisco’s historical model for expansion has centred around ‘acquired R&D’, the purchase of early stage companies whose technology can be used to augment its extensive array of networking equipment. The first signs of a change in strategy, though, came in 2005, with a $6.9 billion deal for TV set-top box maker Scientific Atlantic. But the company confirmed it has an even wider agenda in March with the announcement of a $3.2 billion deal to buy online conferencing company WebEx.

It is not just the size that makes these purchases stand out, but that they take the company beyond its traditional core market of networking. While remote conferencing may be set for a surge in interest as business leaders become more attuned to the environmental impact of corporate travel, Cisco has produced its own video and web conferencing equipment since 2004. The WebEx buy-out will certainly make it the gorilla in that market, but the most intriguing part of the acquisition lies in the application set that Cisco also gets its hands on.

The philosophy is to use the network as a platform for the next explosio in business and consumer applications.”

Charlie Giancarlo, Cisco

As Cisco’s chief development officer, Charlie Giancarlo explains: “The philosophy at the core of our innovation strategy is to use the ‘network as a platform’ for the next explosion in business and consumer applications.” And in WebEx, Cisco has acquired the software platform to deliver just that.

With its Connect service, WebEx hopes to capitalise on the very fact that its customers use its online collaboration tools as the gateway to a network of colleagues by offering third party applications that run on the same platform. The strategy is similar to’s AppExchange, but while Connect currently plays host to fewer applications, WebEx as a whole boasts more subscribers.

As IT advisory group Gartner notes, this expansion into applications and supporting infrastructure is becoming a cornerstone of Cisco’s forward strategy, and with the market for on-premise applications maturing, “the only viable way” to achieve this is with a SaaS model.

But WebEx is not the only Cisco purchase that fits in with that network- centric outlook. As Cisco looks to exploit a collaborative suite which would be delivered as a service, it has bought Tribe, a social networking services company, and Five Across, a developer of social media content management.

All this places Cisco in direct competition with Microsoft. But as the software giant has been extending its own unified communications strategy of late, Cisco may rightly feel it has little choice but to respond in kind.

Henry Catchpole

Henry Catchpole runs Inform Direct, a company records management software company which simplifies the process of dealing with Companies House. The business was set up in 2013.

Related Topics