NES to Avaya, Tandberg (Soon) to Cisco as Industry Consolidation Accelerates - Page 2
The Cisco/Tandberg deal may be considered a bit sexier because anything involving video is noteworthy. The keys to the deal for Cisco appear to be both the acquisition of an acknowledged leader in the video conferencing sector and the opportunity to push the UC category as a whole toward video. The more video the better for Cisco, which will see benefits in its overall networking business.
“It's Cisco looking to drive additional traffic on its networking infrastructure and to expand its presence in video collaboration,” said Alan Weckel, a director at the Dell'Oro Group. “As we go on, we are going to see more and more video throughout the enterprise as well as SMBs as a way to communicate and conduct business.”
Lichtman guesses that about 20 percent of the UC category is video conferencing. Obviously, Cisco benefits as that total is pushed higher. More specifically, he sees important elements in the Cisco acquisition: It gains a strong provider of video conferencing end points – the gear that sits on desks and in conference rooms -- as well as Tandberg's research and development and channel strengths. It simultaneously eliminates a strong competitor. Like Avaya, it will gain considerable expertise in the form of executives who stay with the firm.
“Cisco's acquisition of Tandberg is very very important,” he said. “It almost locks up the visual collaboration space for Cisco and instantaneously makes them the strongest player in the telepresence and video conferencing sector.”
The Chess Game Continues
In the big picture, the two deals can be seen in the context of the continuing synthesis of UC and the broader worlds of IT and telecom, a process that will take years to work through. Krithi Rao, an analyst for Unified Communications for Frost & Sullivan, said that the evolution of IP, time-division multiplexing (TDM) and hybrid equipment suppliers is entering a new phase in which the platforms are linked in collaborative and UC-based scenarios.
The companies that figure out these connections most effectively will control the UC/collaborative space. To an extent, both the Cisco/Tandberg and Avaya/Nortel Enterprise Services deals can be assessed in this bigger framework. For many, that's where the money will be in the 21st century.
“VoIP also is now evolving to a broader communication technology,” Rao said. “Within that process there is going to be a shift in the competitive landscape.”
The action is just starting in the unified communications sector, and there is no reason to think that the normal arc of development won't take place: Big vendors will go after smaller firms in an effort to buy market share and name recognition, channel capabilities, technology, expertise and other assets. “There is a lot going on in this space,” Weckel said. “Going forward�there will be more consolidation and more acquisitions as vendors try to offer enterprises a complete solution.”