Cisco’s collaboration launch conclusions

Cisco launched its long-awaited collaboration strategy, a move that is not only a giant step and risk for Ciscom, but an indicator of a major disruption in the networking market. Cisco is telling the world that selling bits is not enough, that margins and growth will have to come increasingly from the applications that ride on top of the network and link those bits to consumer or enterprise value.

By making the connection through others, both the sellers of capacity (the network operators) and the sellers of network equipment like Cisco have faced an increasing risk of commoditization and disintermediation. Others have often profited more from investment in networking than those who made it, and Google is the obvious example.

Cisco is apparently wrapping its launch in the mantle of Unified Communications, and in this particular regard we believe they’ve made a mistake. UC is an old concept, and by casting their offerings in the space they’ve both reduced the news impact and magnified the collision with their partners. There are only small chunks of technology that are critical to the collaborative space Cisco covets, and they should be focusing on them more discretely. We’ll have a full look at their launch when it’s public.