Cisco Expands Its AVVID Portfolio

Cisco has been one of Latitude’s biggest service customers and this is undeniably one of the reasons Cisco acquired the company, which earned nearly 75% of its revenues through services. But the party line is that the integration between MeetingPlace and Cisco’s IP Voice infrastructure proved to be the strategic value that tipped the scales for the networking giant. In his briefings about the acquisition, Rick Moran, Cisco’s VP of Product & Technology Marketing-IP Communications, emphasized the convenience of having MeetingPlace functions and services built into the phone’s display panel. Users can enter, reserve a meeting or start an audio and Web-based meeting immediately from their office phones. The concept is not new. Other PBX manufacturers brought this integration to market in the mid-1990s, and several offer it today but for Cisco to build its own webconferencing features into the AVVID platform would have taken longer and cost more than the approximately $80M it spent to acquire Latitude’s more mature and proven technologies.

For Cisco customers who have adopted and deployed alternative webconferencing solutions and for system integrators and resellers who provide solutions other than Latitude’s MeetingPlace, the acquisition announcement may cause concerns about future conflicts of interest. With Cisco and MeetingPlace tightly integrated into one solution, the prospect of Cisco supporting third party conferencing platforms as part of its future AVVID platform is remote. In fact, Cisco may offer promotional bundles to displace competitive webconferencing solutions.

Outside the networking giant’s own opportunities and risk analyses relative to the integrated audio and Web experience, this acquisition is important for rich media communications companies and customers in several ways. First, it indicates that the size and momentum of the rich media market is getting sufficiently interesting that it appeals to both the desktop operating system providers (i.e. Microsoft acquired PlaceWare earlier this year) and voice infrastructure providers. This acceleration of interest in rich media communications by large potential suitors affects all companies who offer virtual meeting support tools, including those that streamline webcasts to large audiences, in both positive and negative ways. On the one hand, there are more receptive environments for small companies to discuss mergers and acquisition and the value of the intellectual properties developed to date may be higher than before the Cisco announcement. At the same time, the potential for rapid changes in vendor loyalties and strategic alliances, even acquisitions, may cause customers to change their attitudes about a prospective investment. Within hours of the Cisco announcement, vendors who had previously been told that a customer would be purchasing Latitude’s platform were re-opening discussions with prospects who prefer to purchase platforms from small, highly targeted solution providers.

Cisco-branded PC Applications
Finally, one should view this acquisition as a clear departure for Cisco from its "core" business of building and providing network infrastructure. Although the company already offers a unified messaging platform, called Cisco UNITY, as part of its VoIP product line and a customer contact center solution, the MeetingPlace platform represents a direct investment into a "user friendly" PC application for mainstream business users. In the future will we see Microsoft and Cisco challenging one another for mind share in the business application arena?

Only time will tell. One thing for certain, the full impact of the Latitude acquisition will take several months to measure.