Vendor Thoughts On Cisco & Web Conferencing

    March 28, 2007

When Cisco made its announcement about purchasing WebEx on March 15, competing web conferencing software vendor iLinc rushed out a press release the following day, talking about the news from their perspective. This got me wondering what other vendors might have to say about theshakeup in the market. I decided to contact several of them in different niches of the industry and see what they felt like sharing.

Of course I owe it to iLinc to start off the parade, since their statement was the impetus for the project. Mark Yeager is vice president of marketing at the company. Mark says that as a direct competitor to WebEx in the same market space, the announcement has been a short-term boost for iLinc. Some prospective customers who were making a vendor decision have elected not to get in the middle of an acquisition where they don’t know howsupport and contracts will be handled by the new owners. He says iLinc can also push the idea of being solely focused on conferencing, while the service is not central to Cisco’s business. He is also delighted with the valuation that Cisco came up with for WebEx, as it may make the investor community smile a little more brightly on other public web conferencing companies.

Mark also points out that the fear and uncertainty factor in the new ownership affects potential business partners looking to work with a web conferencing vendor. A company in a space such as CRM, social collaboration, or e-Learning that wants to add integration with a web conferencing vendor might prefer to do business with a smaller, more focused entity.

Mark finished with a compliment to the WebEx "sales and marketing machine." They have been remarkably important in promoting and evangelizing web conferencing as a mainstream business tool and Mark says he hopes that Cisco doesn’t "crush" the new acquisition as they have occasionally done with past purchases.

Isaac Garcia came at the question from his perspective as CEO and founder of Central Desktop, a company that combines web conferencing with a larger suite of shared workspace collaboration services. He pointed at WebEx’s web-based sales model for small and medium business (SMB) customers. It is largely a matter of making sure they are seen everywhere on the web and letting prospects come to them. Isaac saysthat Cisco doesn’t have that kind of an approach and will have to learn from WebEx if they are to act on their statements about using WebEx as an entree into the SMB world. Isaac thinks it is more likely that WebEx will become more of an enterprise tool than the other way ’round. He says it is very difficult to move downmarket from a large, expensive, full-featured enterprise utility to something more palatable to an SMB world. You can’t afford to remove features and functionality to justify a lower pricebecause your differentiation goes away.

Although Central Desktop offers its own version of a unified collaboration platform, Isaac doesn’t feel that he is likely to get into competition with a Cisco/WebEx offering in that area. He says that the larger company has to justify and maintain a massive sales overhead with big ticket enterprise sales. Central Desktop as a smaller vendor can scale their operations to handle volumes of lower-priced sales to SMBs. As he put it: "They won’t want to compete in the small market. It’s too bloody down here! Largerenterprises with their large channels are not as precise and efficient as many of the smaller vendors are."

Brainshark offers yet another view of the deal, as they don’t compete in the web conferencing arena at all. They offer an alternative to live webcasts with recorded events that integrate lead tracking services. Joe Gustafson, the CEO of Brainshark, was initially surprised at the thought that Cisco would be interested in an application software purchase that didn’t directly link to their core hardware business.But he thinks that all the attention given to the use of web-delivered communications is good for the industry as a whole. He had been worried that publicity and attention had been languishing, especially with Microsoft all but ignoring web conferencing after buying Placeware and renaming it to Live Meeting. He is interested in seeing whether Cisco buries WebEx in their platform as an enabling technology supporting an overall infrastructure play or keeps working on diverse applications such as WebEx’s Sales Center,Training Center, Event Center, and so on. He thinks that if Cisco leaves the WebEx business alone, it is likely to be more successful and help the industry hit the high growth projections put forth by several analysts. Joe was skeptical about Cisco’s ability to move down into the SMB market as well. They have traditionally sold to enterprise IT departments who like to control everything centrally. SaaS is attractive to business units who don’t want to worry about setup and maintenance. They just want touse a service and move on with their business.

I made overtures to two of WebEx’s most well known direct competitors… Adobe (with its Acrobat Connect product) and Citrix (makers of GoToMeeting and GoToWebinar). Neither company wanted to be interviewed on the subject. Citrix did send along a prepared statement in an email message saying that Cisco’spurchase "underscores the huge market potential of real time collaboration technologies." Nothing too earth-shaking there.

And as always, everybody waits with bated breath to see when and whether the long-touted Unified Communications vision from Microsoft will come to fruition with web conferencing tied in to all its other functions.