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Microsoft, Cisco pledge peace on unified communications

By Kevin Fogarty, News Director
21 Aug 2007 | SearchITChannel.com

Channel News Update
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The CEOs of Microsoft Corp. and Cisco Systems Inc. this morning announced what amounts to a pre-emptive cease-fire in what some observers expect will be a nasty battle for market share between Microsoft's and Cisco's unified communications products.

Microsoft's Steve Ballmer and Cisco's John Chambers spent 45 minutes assuring invited press and analysts at the Mandarin Oriental hotel in New York (and everyone else via webcast) that the two companies will continue to make Microsoft's and Cisco's unified communications -- as well as other products -- interoperable, no matter how rancorous the competition becomes.

"This [announcement] is driven by customers who want to know how Cisco and Microsoft are going to work together and where they're going to compete," Chambers said.

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"Our customers love that we compete," Ballmer said. "'Isn't it great that we can get Voice over IP infrastructure from either Cisco or from Microsoft?' That's great. What they're saying is, 'If I choose to use some of your stuff ... and some of Cisco's, we expect it to work."

Customers -- according to Chambers and Ballmer -- began to ask about the competitive atmosphere during two years of on-again, off-again work to build compatibility between Microsoft's Network Access Protection (NAP) and Cisco's Network Admission Control (NAC).

The products did work together when they shipped, but the spat and technical differences between NAC and NAP have slowed sales of both.

"People love to say [that] it's black or it's white -- we're competitors or we're partners," Ballmer said. "But there's overlap. The question is how do we talk to each other -- not to change each other's plans, but to give customers what they want."

"That's not the message we're receiving from the customers in our base," countered Matt Briggs, partner and director of sales for Single Path, a Crestwood, Ill.-based Voice over IP (VoIP) and unified communications specialist that Cisco named its Midwestern regional partner of the year.

"People are starting to do some investigating; the message is starting to filter down to the SMB, where we operate, about Microsoft's VoIP," Briggs said. "What we hear is when people are upgrading Exchange and moving to [Office] 2007, they know there are some more robust communications and want to ask us what we know about it as UC [unified communications] specialists for Cisco."

Cooperation among value-added resellers (VARs) and integrators within both Microsoft's and Cisco's channels is already common, according to Briggs, whose company sells only Cisco and contracts with a VAR partner for joint Cisco-Microsoft unified communications and other product installations.

The competition between Microsoft's and Cisco's unified communications is going to get heavier, however, as the two corporate Bigfeet lumber into one another's territories, Briggs said. Cisco, for example, has gone beyond the wiring closet with the desktop-based Unified Personal Communicator, which combines voice, email, video and Web conferencing into an individual PC.

"And Microsoft, they're going to make it interesting, because they're an absolute powerhouse," Briggs said. "There's not a lot of overlap between us and our Microsoft specialists we partner with. But that will change as [Microsoft] gets the call control hammered out in Office Communications Server."

There has been some angst among customers, however, especially in big companies that might end up running similar products from different vendors to meet the needs of different business units, according to Zeus Kerravala, analyst at Yankee Group Research Inc. in Boston.

"Most people run both Cisco products and Microsoft products; Cisco UC has to run with Microsoft UC," Kerravala said. "They can't put their customers in that position. But there wasn't much of substance today. There will be some tension in that situation until they do something concrete."

Ballmer and Chambers spoke mostly in generalities; the greatest detail about what both described as a "partnership" came from a press release listing seven major technology areas in which each company pledged to make its products compatible with technology from the other.

The announcement also included broad descriptions of four "areas of collaboration" and a four-point "framework for cooperation."

"We didn't really expect to see anything more concrete right now," said Robert Arnold, an enterprise infrastructure analyst with Current Analysis Inc. in Sterling, Va. "They're not going to outwardly call themselves mortal enemies."

Even tempered by a cease-fire, however, that animosity will put channel companies in a touchy position, Arnold said. Customers with an IBM network and Microsoft email are unlikely to ditch IBM to install Cisco's UC equipment, he said. And Cisco shops are unlikely to choose Microsoft's UC over Cisco's.

At customers without a strong legacy, however, the choice will be up in the air, and each vendor will probably bring pressure on the VAR to push the deal their way, he said.

"Ultimately the VAR is going to have to choose the best solution for the customer," Arnold said. "If they don't, then the customer's not going to be happy, and the VAR won't be happy, and eventually Microsoft and Cisco won't be. It's got to be the right match."



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