Dear Tandberg shareholders: Will you or won’t you make Cisco the happiest and most powerful videoconferencing vendor in the world?
This acquisition of Tandberg sure has drama, doesn’t it? Here it is, early evening on Dec. 3 and there’s still no word as to whether Cisco has acquired the requisite number of shares it set for itself to close the deal. Cisco’s agreement to buy Tandberg includes the provision that the deal can only happen if Cisco can get hold of 90% of Tandberg’s stock. As of yesterday, Cisco had only managed to collect commitments from shareholders to take over 84% of the stock. If Cisco can’t get to 90%, the deal won’t happen and Cisco will walk away. Cisco has extended the deadline for reaching the 90% threshold a coulpe of times, but it said yesterday that tdoay was the final extension. The clock was to run out at 5:30 PM CET (Central European Time), which passed us by hours ago.
Yet we have no news. Cisco and Tandberg have been silent on whether they were able to get this done. We haven’t heard much at all since Cisco upped its offer from $3 billion to $3.41 billion to entice some holdout shareholders who felt the original offer undervalued Tandberg.
Here we are, with not a peep from Cisco and Tandberg. Are executives working the phones, trying to figure out whether this deal? Or have they decided to let the silence speak for itself and the deal is dead. We shall see.
Is the term “unified communications” already dated? Don Van Doren over at Unified Communications Strategies notes Cisco seems to be pushing lately for “collaboration,” and while it’s fortunately less of a mouthful, the UC terminology war is only confusing enterprises.
Pulling no punches, he lays into vendors for soiling UC’s good name:
First, UC has come to be associated with the voice and voice-substitute (e.g., IM) components of communications. This emphasis has been especially prevalent from the legacy telephony equipment suppliers, many of whom tend to see things through a voice filter. In my opinion, voice will increasingly be augmented by other forms of unified communications, which can offer deliver better information more rapidly or accurately.
Meanwhile, he adds, confusing customers does no one any favors:
The risk is that when there is confusion, people tend either to sit on their wallets, or to reflexively purchase tried-and-true, like-for-like functionality. The impact is that too many enterprises will delay the realization of the compelling benefits that UC can enable by failing to grasp the impact of the industry changes that are underway.
Cisco’s newly revised $3.41 billion offer for Tandberg represents a total capitulation to the demands of several holdout Tandberg shareholders who were asking for more money.
Cisco originally offered $3 billion for the Norwegian videoconferencing vendor, but the deal was contingent on 90% of Tandberg shareholders accepting the price. The deal appeared in trouble when a cadre of shareholders who owned about 24% of the company’s stock demanded an 11% increase over Cisco’s original offer.
Today Cisco has come through with that. Its $410 million bid increase is about $80 million more than the holdout shareholders were asking for. This deal looks like it’s going to happen.
Lost in the hoopla from last week’s news that HP bought 3Com was a much smaller deal in the high definition (HD) videoconferencing market. PC accessory company Logitech has bought LifeSize Communicaitons, a six-year-old vendor of HD desktop videoconferencing and room-based telepresence products for $405 million.
Logitech is best known as a manufacturer of peripheral devices for PCs, especially keyboards and mice. With only a line of standard-definition webcams, Logitech’s specialty is not enterprise video.
With LifeSize, Logitech graduates from selling peripheral devices to consumers and small businesses to selling an enterprise solution. It’s a whole different ballgame. In addition to endpoint devices, LifeSize sells HD videoconferencing infrastructure, such as multipoint control units (MCUs), gateways and security devices.
In the wake of Cisco’s attempt to acquire Tandberg (a deal which might be collapsing), LifeSize probably recognized that competing in the enterprise video market will require the backing of a larger corporate partner. Logitech might have the money to boost LifeSize’s marketing budget, but it doesn’t bring the right sales channel to the table.
The most logical next step for Logitech will be to approach key unified communications competitors to Cisco like Avaya, Siemens and Microsoft to build up video interoperability partnerships.
While not true for many technology segments, bloggers in the unified communications space often post pragmatic, insightful and useful information. However, finding specific information when you need it in the blogosphere is a challenge, but one that Google is trying to address.
Google Social Search is a new experimental feature designed to help users customize searches, including blogs, reviews and other content publicly available within your social circle.
In the realm of dual-mode fixed-mobile convergence (FMC), one of the biggest barriers to broad adoption is the narrow scope of smartphone platforms supported. Agito and DiVitas, the two top independent dual-mode FMC vendors have struggled to come together with some of the platform makers… A big stumbling block for adoption has long been the lack of dual-mode FMC support for Research In Motion’s BlackBerry platform, still THE enterprise smartphone platform of choice.
In June we reported that Agito finally managed to add BlackBerry suppoprt, expanding beyond the 40 or so Nokia Symbian and Windows Mobile devices it had already been supporting.
DiVitas, on the other hand had been quiet for awhile on the BlackBerry front, limited to Windows Mobile and Nokia E series and N series phones.
Today DiVitas announced a huge expansion of the mobile platforms it supports. It has developed a native client and a web-based client that extends its FMC technology to the iPhone, BlackBerry and Android operating systems.
Check out this PDF data sheet on the new Divitas offerings. You’ll see snapshots of what DiVitas’ FMC client looks like on each mobile platform.
Bloomberg is reporting that Cisco might walk away from its agreement to buy Tandberg. As we mentioned two weeks ago, A large group of shareholders have balked at the $3 billion offer Cisco and Tandberg’s executives and boards of directors agreed upon. Cisco’s Tandberg deal is contingent on it being able to acquire 90% of the company’s stock. Twenty-one shareholders who own 24% of the company say Cisco’s offer is too low.
Bloomberg is citing a “person familiar with the transaction” as the anonymous source for its report. Financial analyst Martin Hoff at Arctic Securities ASA told Bloomberg that Cisco probably won’t just walk away. Instead, the anonymous claim that Cisco is contemplating a pullout from the deal is probably just a scare tactic. “It’s probably smart of them to send some signals to scare the shareholders into accepting the offer,” he told Bloomberg.
If Cisco does close the Tandberg deal, it will expand its enterprise video strategy from its high-end telepresence products to a full suite of desktop and room-based video systems, multipoint control units and video management software. Combined with Cisco’s existing lines of telephony products and Cisco will be competing directly with Tandberg’s chief rival Polycom on all fronts. If that happens, enterprises can expect other major communications vendors like Avaya and Microsoft to become heavily aligned with Polycom.
Cisco’s deal to buy Tandberg could be on ice.
When Cisco and Tandberg agreed to their video marriage two weeks ago, the dowry was set at $3 billion. And the deal was contingent upon the approval of the owners of 90% of Tandberg’s stock.
According to Reuters (via GigaOm), Swedish brokerage SEB Enskilda has told Cisco that it represents 21 shareholders who own 24% of Tandberg’s stock, and those shareholders want more money. “We think the price is too low,” Amund Lunde told Reuters. Lunde is CEO of life insurance firm Oslo Pensjonsforsikring, which owns 1% of Tandberg, It’s not clear what it would take to win over these holdouts, but clearly Cisco will have to dig deeper to get a controlling interest in the company.
Apparently investors have been telling the Norwegian press that something stinks about the Tandberg deal. According to the Financial Times (via Norwegian language site Dagen IT) Rasmussen Group CEO Rune Selmar said Cisco’s promise of three-year bonus agreements to “key” Tandberg employees “probably explains part of management’s positive attitude to the acquisition.”
Ouch. That sounds awfully close to an ugly accusation.
Many, many Nortel retirees are in danger of losing their retirement benefits and severance payments as Nortel slowly slides into oblivion. Some of them would certainly face true financial hardships if this were to happen. Given the salary he has drawn over the last four years, former CEO Mike Zafirovski is probably not one of those vulnerable former employees. However, he is suing Nortel for his golden parachute.
Zafirovski was supposed to be the leader who turned around Nortel’s fortunes. Hired in 2005, he came on board with a five-year plan to help the Canadian tech giant rediscover its magic touch. He had some good tools to work with: a huge and loyal install base, good engineering talent, a strong brand name.
But fortune didn’t smile on the Zafirovski era. Nortel muddled along for three years. Then the economy took a nosedive and Nortel went bankrupt. Now rival companies are circling the Nortel carcass, biting off chunks of the business for $1 billion here and $500 million there. Zafirovski parted ways with Nortel in August. He left the company in such a state that it no longer even needs a CEO. The board of directors is letting the financial executives handle the final bloodletting and breakup of the once proud company.
Zafirovski is fighting to make sure he gets compensated for his leadership. According to the Ottawa Citizen, he is seeking more than $12 million worth of bonuses, pension payouts and severance. Just a few months ago, he was fending off such lawsuits from former Nortel employees. Now he’s in line with the rest of them.
By now, we’ve all heard about and drooled over and whined about our lack of invites into Google Wave, the latest Google application that promises to “revolutionize” communication — or at least CNN says so.
I only made it 25 minutes into the insanely long Google Wave demo video, which was long enough to see developer Lars Rasmussen do a jig but not quite long enough to see the Wave flex its muscles completely.
Beyond the ooh and ahh factor, how useful do you see this in an enterprise space? Your personal life? Do you really want people seeing you type in real time? One of our sister sites, SearchCIO.com is postulating that enterprises may be integrating the Google Wave into their own applications:
“People want a single place to collaborate on projects,” said Ted Schadler, an analyst at Forrester Research Inc. in Cambridge, Mass., who wrote a blog post (“Google Wave: Surfing The Future Of Collaboration“) with his take on where Google Wave is heading.
“Right now across corporations, they have spreadsheets, projects hosted on SharePoint, users have to jump from one application to another and partners or customers are given access to a VPN to collaborate,” he said. “That’s why one place to communicate, tying together Google Wave and Google Docs, makes sense.”
I spoke to one Masssachusetts-based analyst tonight who is among the envied few with an advance Google Wave account, so of course asked her what she thought. So, for everyone who feels bad they didn’t get the invite… apparently, Google Wave is not very fun if no one else you know is using it.