Understanding Cisco's Collaboration Strategy (Part1) (Collaborative Thinking)

The following is Part 1 of a series on today's announcement by Cisco.

What is driving Cisco into the collaboration market?

There are many reasons driving Cisco in this direction (revenue opportunities, growth needs, and customer demand). Cisco believes that the collaboration market is in transition – that there are structural changes in the market that opens the door for Cisco to leverage its assets (voice, video, and networking) in ways that will enable it to take a leadership position. This should come as no surprise to market followers or competitors – Cisco is a company that strongly believes that its ability to grow and innovate is dependent on how well it:

· Understands the emergence and evolution of market shifts and the repercussions of those shifts to Cisco (pro and con)

· Formulates strategies, adjusts its own business model(s), and arrays resources to capitalize on market opportunities created by those shifts

· Continuously listens to customers and other stakeholders along the way

· Restructures its organization and channels to best leverage its relationship capital in ways that establishes market leadership

· Iterates and executes on those strategies in a manner that times Cisco’s entry and growth into those market adjacencies

What major changes in the collaboration market is Cisco exploiting?

Cisco is exploiting three “wedge issues” as it moves into the collaboration market:

· Virtual Computing Environment: The deal with EMC and VMware enables Cisco to catch-up to a transition that matured more rapidly perhaps than Cisco expected. Market expectations and competitive needs combined to make a partnership necessary. Cisco can leverage this alliance as it attempts to influence/control its role and infrastructure solutions in the SaaS/Cloud market.

· Video Networks: It should come as no surprise that Cisco fixates on video. However, it is a lever that Cisco can exploit given consumer trends (YouTube) and social computing trends where conversations and visual communication are now viewed not from a tooling viewpoint but as “acts of collaboration” at the people and process level. Capitalizing on video trends keeps Cisco on a necessary business trajectory. Video is a competency Cisco can claim as its unique heritage compared to Microsoft and IBM as well.

· Collaboration: Converging UC (voice, conferencing) and collaboration trends make this a crucial market adjacency for Cisco to enter. In some ways, it had no choice. Cisco could not allow a key rival (Microsoft) to encroach in the UC market without a response. So on the one hand, its move into collaboration is defensive to protect its UC assets. However, more importantly, given the structural shifts within the collaboration market – it is very opportunistic for Cisco to move into collaboration regardless of Microsoft. The move into collaboration is enables Cisco to transform its voice and video communications solutions into broader solutions and adjust its business model to deliver additional solutions specific to collaboration.

Summary

Cisco sees value in a network-centric approach that will unify collaboration activities across multiple silos. It's embedded capabilities in the network enable it to perform unique services such as auto tagging all forms of media. As collaboration moves in the direction Cisco believes will happen, the sharing of knowledge transitions from a text centric model to include voice and video (on-demand, Podcasts, etc) where it (Cisco) brings unique value relative to other approaches.

The combinatorial opportunity arising from these wedge issues enable Cisco to target SaaS-based email to gain short-term customer traction and establish longer-term market credibility as a collaboration platform and solution provider. Simultaneously, Cisco hopes to build momentum (via WebEx Collaboration Cloud and Enterprise Collaboration Platform), to solidify its collaboration story. Its new portfolio component, enterprise social software, positions Cisco more broadly across multiple market segments associated with collaboration (content management, search, and portal). Overall, becoming the market leader for inter-company collaboration appears to be the primary focal point for Cisco. However, it will end up competing head-on with traditional collaboration vendors (i.e., IBM, Microsoft) as well as up-and-coming new entrants (e.g., Jive).