Small and midsize businesses may soon have something new when selecting desktop applications: choice. Microsoft's hammerlock on the desktop may loosen as a couple of industry heavyweights try to wedge their way onto the desktop.
Cisco's desire to be more than a network equipment supplier became even more pronounced when the company forked over $215 million to acquire PostPath, a startup trying to displace Microsoft's e-mail and calendaring software.
PostPath developed a Linux-based system that enables businesses to augment or replace Microsoft Exchange. The startup's solution interoperates with other e-mail solutions, provides a browser-independent Ajax Web client, and works with mobile clients. The product doesn't require middleware to interoperate with Microsoft Outlook, Exchange, Active Directory, ActiveSynch, or BlackBerry Enterprise Server. Companies could deploy PostPath to improve Exchange performance or ease backup tasks, or they could dump it all together.
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That option appeals to many small and midsize businesses because of Exchange's high price and complexity. PostPath claims its products cost about one fourth as much to deploy as Exchange. And while the Microsoft product often requires a small army of skilled technicians to operate, PostPath is known for its simplicity. Rather than have customers install and manage the software itself, PostPath is software as a service (SaaS) -- the vendor maintains the product and customers access it over the Internet.
Even more important than the PostPath purchase are Cisco's plans for its new bauble: integrating PostPath's 67 employees with its Collaboration Software Group. CSG is a key component in Cisco's recently established Software Group, which oversees the IOS network operating system, network and service management, unified communications, policy management, and SaaS offerings. In other words, Cisco's growing software portfolio.
Eventually, the vendor plans to integrate PostPath into WebEx, a collaboration tool Cisco purchased for $3.2 billion in April 2007. WebEx supports instant messaging, team spaces for collaboration, wikis, document sharing, and voice, video, and data applications. PostPath provides an integral piece to Cisco's new unified WebEx Connect collaboration platform, which targets the Exchange/Outlook/Office juggernaut.
These changes are taking place because a paradigm shift is occurring in the industry. The dividing lines between networking equipment and desktop applications are no longer clear. Microsoft is pushing down the protocol stack and trying to deliver traditional networking products. The company has been coupling Office with LiveMeeting to woo WebEx customers. Also, the Microsoft Office Communications Server (OCS) has been positioned as a PBX replacement, in the long term -- if not sooner. Software has obviously become a bigger part of Cisco's arsenal, as evidenced by its aggressive moves with CSG.
Both Microsoft and Cisco will need to navigate the rough waters created by this shift. Traditionally, the two have worked together to serve customer needs. In fact, the duo relied on Session Initiation Protocol (SIP) protocol to integrate Microsoft Office Live Communications Server with Cisco's Unified Communications system. But their relationship has turned more combative as the market has evolved. In June 2006, Microsoft turned to Nortel, Cisco's traditional rival, for help in building unified communications applications. Now, the fight is clearly on.
Cisco must overcome some challenges to be successful in its latest foray. The company has little experience in the desktop application arena. Microsoft has proven to be a fierce and formidable competitor, willing to use just about any tactic to crush its competitors -- and then relish in their demise.
Also, the skirmish isn't limited to just the two behemoths. Google, viewed by many as the industry's hottest company, has been aggressively pushing its Google Apps to small and midsize businesses.
While the shareholders of the different companies may be a tad nervous about how the market will play out, small and midsize businesses can rejoice. Microsoft's dominance has meant a dearth of choices for customers. As Cisco and Google move into the application arena, that scenario should shift, which will force all of the vendors to deliver less expensive, more functional collaboration products to their customers.
See more columns by Paul Korzeniowski.
Paul Korzeniowski is a Sudbury, Mass.-based freelance writer who has been writing about networking issues for two decades. His work has appeared in Business 2.0, Entrepreneur, Investor's Business Daily, Newsweek, and InformationWeek.
