When Cisco acquired WebEx it resulted in (1) direct competition with Microsoft's Office Live Meeting service and (2) opened a future new competitive battle with Microsoft's Office Live / Windows Live Spaces. While the competing web conferencing solutions are part of a broader confrontation between Microsoft and Cisco regarding unified communications, the more serious battle (in my opinion) will occur if/when Cisco can deliver a platform and ecosystem around WebEx Connect.
If Cisco can forge more partnerships like the one with Oracle (posted here), and create a WebEx Connect marketplace for additional content, collaboration and social software solutions (delivered by third parties that see Cisco as a more level playing field than Microsoft, or more reliable than Google), and add to platform Cisco's own unified communications services - then Cisco no longer will be viewed as just a networking or PBX vendor trying to dabble in adjacent markets. "IF" it can do these things (along with building out a developer story), then we could see a realignment of vendors we consider top players in the collaboration space. This evolution might take 3-5 years. But that's not all that long - it took Microsoft just about 5 years to become a credible force in the unified communications market.
With Cisco touting its own approach to unified communications, is there a Betamax-VHS battle looming?
There's plenty of room for both Cisco and Microsoft to be very successful in this space. There will be some ways that our things can work together, because we've worked with Cisco on a lot of the network and security initiatives. But there's very direct competition here too. Cisco has offered an IP phone system for some time, and our Office Communications Server uses Internet telephony to let you track what's going on with your colleagues and makes it easy to set up a screen-to-screen-type call. Cisco acquired WebEx, and that competes directly with what we call Live Meeting, which is our screen-sharing piece that allows people to talk and work on a document at the same time. But I think we should have the advantage, because we can create the overall user experience.