IP EXPO ONLINE » unified communications

Cisco Lining Up Bid for Skype?

Phil Jones — Wed, 01 Sep 2010 08:16:54 +0000

With the unified communications market already hard at work digesting the significance of Microsoft’s recently announced strategic pact with Polycom, rumours are emerging that Cisco is preparing to spring a surprise bid for Internet phone operator Skype.

According to TechCrunch, Cisco made a formal offer to acquire Skype just before the company’s recent SEC filing of its intent to make an initial public offering (IPO).

The IPO plans mean there is little or no chance of Skype even acknowledging that Cisco has made an offer, and the networking giant is unlikely to spill the beans in case it sparks a counter offer from an interested potential rival – such as Google. But TechCrunch, a well connected IT market blogsite, reckons it is working with well sourced information.

Skype has been the subject of plenty of speculation since its $2.75 billion spin-off from Ebay last year

Skype has been the subject of plenty of speculation since its $2.75 billion spin-off from Ebay last year. Although it proved to be a loss making acquisition for the online auctioneer (which acquired it from its founders for $2.6 billion in 2005 rolled out of Ebay) it has steadily gained traction in the nascent Internet telephony market, and now boasts very strong brand recognition in a market that it finally starting to show real growth.

In its recent IPO filing, Skype revealed that it was profitable (albeit only just) and generated revenue of $406 million in the first six months of 2010. This would not be enough to justify its IPO tender, which would value it around $5 billion if fully subscribed, except that it has also revealed healthy gross margins of 50%, which are expected to widen as its scale allows it to negotiate better termination rates from telcos.

Most analysts see potentially big synergies between Cisco’s existing UC portfolio

Initial response to the TechCrunch rumour is broadly positive. Most analysts see potentially big synergies between Cisco’s existing UC portfolio (the Webex and Unified Communications suits), which could only benefit from association with the Skype brand, and the added income likely to be derived from access to Skype’s 124 million strong global customer base.

Others also note that Cisco CEO John Chambers recently identified video as net killer app for the Internet, and promised that Cisco would unveil a consumer-oriented version of its enteprise video conferencing technology at next year’s Consumer Electronics Show. Acquiring Skype would allow Cisco to accelerate its delivery of a consumer video service, and in all probability do so at a much reduced price compared to what it is likely to be able to offer based on its current technology.

As well as floating the prospect of a Cisco bid for Skype, TechCrunch took the opportunity to refresh memories of earlier speculation that Google – owner of YouTube – might have similar interest in kick-starting a video telephony business by acquiring Skype. Those rumours were rife two years ago, when Ebay was desperate to off-load its loss-making subsidiary, but since then Google has made a decent fist of creating its own voice services based on its own technology.

This time around TechCrunch thinks likely anti-trust intervention will dissuade Google from getting involved in any bidding war for Skype, and it may be right. But, this doesn’t mean there may not be other suitors waiting in if Cisco’s interest is real. Didn’t Microsoft just ink a strategic pact with PolyCom to leverage video technology in its unified comms contest with Cisco? If so, why shouldn’t Microsoft go a step further a spend a few billions acquiring Skype for itself? It’s not as if it couldn’t afford to, particularly if it considers that buying Skype will be one in the eye not just for Cisco, but arch Internet rival Google too.

Microsoft Inks Polycom Pact to Combat Cisco in UC Space

Phil Jones — Thu, 19 Aug 2010 09:31:28 +0000

Microsoft has announced a multi-year strategic partnership with Polycom, the unified communications and video-conferencing pioneer, which promises to intensify both companies’ already fierce competition with Cisco.

Although the two companies have long-standing research and development agreements in place, this latest agreement is the first to see the companies partnering in the delivery of end-to-end UC solutions based on Microsoft business software products. It promises to be a stern test for Cisco in the UC market, and could also present new challenges to other smaller players with links to either or both of the two companies.

It promises to be a stern test for Cisco in the UC market, and could present new challenges to other smaller players.

However, on balance, analysts predict that this more market-facing alliance of business software giant, and the UC systems pioneer is likely to good for the UC market overall.

Nevertheless other analysts, notably CurrentAnalysis are critical of what they see as a lack of transparency in the new agreement. According to CurrentAnalysis: “the two companies have provided little insight into what new solutions will be jointly developed, when they will be available, and precisely what new sales and marketing programs will be in place around them.”

CurrentAnalysis’ criticism may be valid in the short-term, but with Microsoft preparing to host a major gathering of its UC eco-system community at IP EXPO in October, it won’t be long before existing and prospective UC customers of Microsft and Polycom will be able to have their questions about their future UC product strategies answered.

Windows 7 to Lead IT Spending Rebound

Guest Post — Tue, 03 Aug 2010 16:27:52 +0000

Corporate IT spending may still be lagging the levels of two years ago, says a new Computer Economics study, but recovering is coming lead by strong demand for Microsoft Windows 7, and growing interest in desktop virtualisation and unified communications.

According to Computer Economics’ latest Technology Trends 2010/ 2011 study whilst only 3% of IT organizations have so far migrated to Windows 7, 31% said they had ear marked funds for migrating to the new desktop operating system in their latest IT budgets.

Interest in Windows 7 is thought to be driven by a combination of factors, including the urgent need for a corporate desktop refresh at organisations that have frozen IT funding in the recent recession.

At the same time, some organizations seem to be taking the opportunity to go a step further and virtualise their desktop infrastructure. Only 15% of the 200 organisations surveyed by Computer Economics have so far deployed desktop virtualisation, but 29% say they will do so over the next 12 months.

“While this [desktop virtualisation] is still an emerging technology, the uptake appears rapid. Companies are having a very positive economic experience with early implementations and many are finding deployment costs are less than expected,” said John Longwell, Computer Economics’ vice president of research.

Unified communications is a slightly more widely adopted technology that continues to make gains. While 27% of organizations have adopted unified communications solutions, 40% are investing in UC solutions in their current fiscal year.

Other findings in the study indicate organizations are once again investing in ERP systems, as well as revisiting legacy application renewal and application consolidation strategies. Meanwhile, data center consolidation, a big area of focus in recent years, seems to be cooling off in the current environment, and RFID systems, open source business applications, and 10G Ethernet remain stalled at the gate in the enterprise market.

IT executives are willing to invest in technologies that deliver solid economic returns while requiring low upfront investments

The message seems to be that IT executives are willing to invest in technologies that deliver solid economic returns while requiring low upfront investments. IT organizations also seem willing to open the purse strings for investments deemed necessary, such as ERP systems and desktop upgrades, despite the prospect for limited returns. There is little appetite, however, for making big bets on emerging technologies with uncertain economic benefits.

£61 million cultural project rolled out in Leicester

Neil Robertson-Ravo — Mon, 23 Mar 2009 14:38:05 +0000

Last week Rob Grieg, Director of ICT and Operations from Leicester Theatre Trust (LTT) travelled down to London to explain how NEC Philips provided a Unified Solutions which has revolutionised Leicester’s new Curve theatre – a £61million state-of-the-art cultural project which was opened by Her Majesty The Queen on 4 December last year. Based around a service-orientated Unified Communications architecture – NEC Sphericall – the solution integrates the communications technologies with business applications providing a flexible and open infrastructure to support its current and future development plans.

View Rob Grieg presentation – Listen to Rob Grieg’s presentation – Read the case study