What Risk to Cisco and Microsoft?
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In the global domination game Risk, enemies often unite to take out a stronger opponent. When the battle is done, the two that remain engage in one battle to control the board. Cisco and Microsoft are gearing up for such a bloodbath. |
Both companies fired warning shots at the other late last week. On Friday, Cisco took a small stake in VMware, with a $150 million investment. Days earlier, Cisco announced its new VFrame appliance, due out in August, as part of a push into data centers.
Meanwhile, Microsoft advanced into Cisco territory on multiple fronts. During its annual Financial Analyst Meeting on Thursday:
- Chairman Bill Gates proclaimed that video conferencing solution RoundTable is "now complete." He claimed that "even the audio part alone is way better than what came before."
- Jeff Raikes, president of the business division, announced the code release of Office Communications Server 2007 and Office Communicator 2007, which anchor what Microsoft calls its "unified communications" strategy. Raikes boasted that Microsoft would be a "major force in unified communications and voice" and that "we will be able to cut in half the cost of what companies spend on their enterprise telephony."
- CEO Steve Ballmer and Ray Ozzie, chief technical officer, laid out a startling services strategy: In its boldest bundling move ever, Microsoft is trying to integrate the Internet into all its product and services. It's an engulf-the-Internet-strategy that only differs from other bundling efforts by its shear scale.
The bigger battlefield isn't really technology but turf. Cisco and Microsoft have two of the largest—and largely overlapping—partner channels. As the companies push into the same markets, so will they push with many of the same partners. Past Cisco-Microsoft partnerships generated synergy while increased competition will create channel conflict between the companies.
Microsoft has opened new partnerships, such as the one with Nortel Networks, as allies against Cisco for the push into business communications. Who wins may be more about which company Microsoft partners with better—whether with big corporations or system integrators and solution providers—than about which company delivers the better technologies.
Conflict is inevitable. Cisco and Microsoft approach their respective markets from contrary philosophical positions.
The two companies' current corporate advertising campaigns point to subtle, but distinct differences in their philosophical approach. Microsoft's "Realize Your Potential" campaign is all about empowering the individual. By contrast, Cisco's "Welcome to the Human Network" campaign beckons, "We're more powerful together than we ever could be apart."
Microsoft wants to put the smarts on the desktop, while Cisco puts intelligence on the network. For example, Microsoft's unified communications strategy is about pulling voice, data and video communications to desktop software. Yes, there are server components, but the core interaction and pushing and pulling of communications occurs at the desktop.
Cisco envisions a world where communications are instantly available—pushed out from the network—anytime, anywhere and on any device. Cisco's network smarts approach derives from its Internet heritage. The approach also resonates well with the technology and business philosophies of many, perhaps most, Web 2.0 companies.
The inevitable conflict will be one of business philosophies, contrasting technologies and overlapping partner channels. The loser may not make the winner stronger. In some ways, Cisco is the Internet, because of its huge networking and router success. Microsoft is business computing, because so many corporations and organizations use its software.
The channel should be wary. When giants battle, they step on little people.
Comments (13)
Asus is getting ready to unleash a $199 compact notebook running Linux.
http://hardware.slashdot.org/hardware/07/07/30/1853241.shtml
Another Linux notebook from another OEM? First Dell, then possibly Acer, now Asus, what next HP? This is starting to look like a trend here.
Posted by chips | July 31, 2007 3:15 AM
Chips
What has this got to do with the above article ?
And as for your Asus laptop "It's targeted at new users who don't own a computer or at people who want a cheap, small laptop for basic tasks."
Note the last two words Chips "basic tasks".
And this "The storage options are a bit cramped, as you only get 4 GB of on-board storage (8 GB on the $299 model) and no optical drive."
It is only fit for basic tasks.
Imagine it no DVD/CD drive would you want it, I certainly wouldn't waist my money on it.
And as I said to you before "if you want more" sure "at a price" !
Everything coming out of you is Linux orientated Chips, again I say to you that you should go and be happy at "Linux Watch":)
Posted by Neil | July 31, 2007 3:58 AM
Very relevant Chips. Insightful as usual (not).
Posted by Ben | July 31, 2007 4:35 AM
Neil;
Whats your point Neil? Are you writting a book or something?
Posted by chips | July 31, 2007 4:38 AM
Chips
If you don't get it there's nothing I can do for you mate !
Try looking at Ben's comment and you will see that I am not alone.
You are too fixated on your own Linux (and other FREE software) world to understand.
Posted by Neil | July 31, 2007 5:35 AM
This isnt all bad. As a Cisco Specialist I wave the Cisco flag and push Cisco Call Manager and Unity, which relies on there being an AD environment and an Exchange Server on the network anyway. If a customer has Exchange 2007 and Office Communications Server it could be that by implementing a Cisco VoIP solution the functionality of the Office Comms Server can be further leveraged, which is a selling point for Cisco VoIP, and means that the additional expense of Unity is not required.
This assumes that the Microsoft product operates using open standards (not always the case with large vendors) and can interact with any VoIP solution. I would assume that it would as Microsoft dont do their own VoIP solution?
There is definite overlap, and the fact that Call Manager 5.x and 6.x now ships on Linux rather than a MS platform suggests there is some fall out between the 2. It was always on the cards though. Cisco are not only providing the 'string' that enables vendors like MS and Novell to work but are also providing content as well now, so overlap was always inevitable.
Posted by Mat | July 31, 2007 6:06 AM
I don't see a lot of demand for solutions that require a fat desktop machine. Especially one that is Windows only. We waited years for Vista and when it arrived it was, and is, a big disappointment.
I suspect Cisco approach will be the winner and MS communications server may be as unprofitable as the XBox.
Posted by Henry | July 31, 2007 9:47 AM
Free Software is everywhere. Yeah!!
We hack free solutions for communications, productivity (Office and media authoring/editing alike), databases, programming languages, all things you want, Baby!
Soon we will get to our goal and throw M$ out from the marketplace. Yeah!
Free Software, Free Software, Free Software
YEAH!!
Posted by Beef | July 31, 2007 11:24 AM
Free Software is everywhere. Yeah!!
We hack free solutions for communications, productivity (Office and media authoring/editing alike), databases, programming languages, all things you want, Baby!
Soon we will get to our goal and throw M$ out from the marketplace. Yeah!
Free Software, Free Software, Free Software
YEAH!!
Posted by Beef | July 31, 2007 11:25 AM
Man! Is it even possible to read a single article without having to go through a pointless chips/Neil/Andre debate? They constantly argue like childish retards about the same crap. Really annoying!
Posted by Ryannoyed | July 31, 2007 8:08 PM
To someone with a hammer, every problem looks like a nail.
Cisco's strength is network plumbing (routers etc). Therefore it sees all problems in terms of network plumbing.
Microsoft's strength is the desktop. Therefore it sees all problems in terms of the desktop platform.
I don't think either approach will prevail, since neither one gets the whole picture. Who does get the whole picture? How about a platform that can run on desktops, servers and also the network plumbing?
In other words, how about Linux?
Posted by Lawrence D'Oliveiro | July 31, 2007 8:40 PM
Ryannoyed - good on you.
Posted by Ben Symington | August 1, 2007 1:36 AM
Lawrence,
WTF...You've made no sense here. Let's not confuse OS from software applications that drive communications. Cisco has an open architecture approach to communications. They deliver network SOFTWARE that run on application specific platforms (routers not plumbing). They also deliver communications SOFTWARE, that run on Linux appliance, some Windows servers and they deliver client side SOFTWARE that run on windows/MAC/linux desktops. The basic principle of communications is that it should be open and non proprietary. Cisco knows that no company has a monopoly when it comes to innovations and for businesses to protect their investment and be able to leverage other innovative products, the architecture must be OPEN, SECURE and adaptable.
Cisco is the only end-to-end player here, I guess they are going to unify unified communications :)
I think that's the winning strategy.
Posted by DO | September 24, 2007 3:02 PM