GigaOM

What Did Cisco’s $3.2 Billion for WebEx Buy?…

Following the deal announced by Cisco for the Web conferencing service, here are the candidates: 1) A channel for its cool telepresence system, according to Sean Ness. 2) A pig in a poke, opines Mike Arrington and a number of……

The collaborative business and service efforts are a large component of the future of Web 2.0 applications and is a big part of the business plans of many of the Web 2.0 companies. With the advent of commodity computer, particularly commodity computing cycles (a la Amazon Web Services like EC2/S3), the ability for smaller companies like 37signals to compete with Microsoft and Cisco in this sphere will only be enhanced. It will be interesting to see if the ROI on the $3.2B over the next couple of years is positive.

well, 2 million paying users for 3.5 billion…I see the goal, its the limited user base, 2 million, that is a big question mark. The race to the bottom on voip will be interesting, and I would not bet agains yahoo, ms, skype, cisco, or any contender. In fact, I bet oracle is about to get into the picture. Why? Becase you are talking about the convergence of many techonlogies, not the least of which is the enterprise database as we know it. Skype is doing a good job of making its userid the single tying factor to voice and the potential for infinite services on top of its massive social/consumer/business network. With googol trying to pony up with at&t, I do not see them as having a clear focus…they are too busy creating too cool web 2.0 tools for free…”they can’t see the forest for the trees…we are quite smart emperor’s dressed in the best and brightest attire. Cisco is a carnivore, but so is ms, and oracle.

Sorry, I forgot to mention, adobe is also vying for the voip space and p2p space and is no slouch in software, what they are missing is an enterprise database and customers who use
it.

Sorry, but I also like skypes “voip kernel” approach, embedding the skype kernel into handsets. They are becoming quite the innovator in that area and can drive voip on many many different devices. Not to mention their 3party app2app api which opens up the message channel for developers, this will take them very far if they do not eat their young.

[...] Communications, Inc. has a market cap of $2.82 billion and trades under the NASDAQ: WEBX symbol.  GigaOM has some further insight regarding why Cisco would actually buy the company.  In summary, Om Malik [...]

We’ve been using Adobe’s Connect product now for a few months and are finding it far superior to WebEx…I expect they will continue to gain market share against WebEx moving forward. In this light, the rich valuation seems unjustified.

3.15.07 Cisco buys WebEx…

The purchase price is about $3.2 billion, according to the press release. WebEx is a market leader in on-demand collaboration applications, and its network-based solution for delivering business-to-business collaboration extends Cisco’s vision for Uni…

Cisco’s earlier purchase of social networking assets from Tribe.net them the core SNS technology to make webex more sticky. One could imagine a potential consumer play (think of a realtime photo browsing experience between dispersed family members / friends, and many other scenarios) - i don’t know if that is their core demographic though.

What makes this exciting is that they have purchased a ’space’ where real ‘work’ happens - where people are spending real ‘time’ - they could allow social networking to grow from w/in this webex space. you can imagine many cool scenarios here…

Gigaom may differ on this line of thinking: http://gigaom.com/2007/03/03/cisco-tribe-five-across/

[...] 15th, 2007 Great article on GigaOm concerning Cisco’s $3.2 billion purchase of WebEx. As Om noted with two million [...]

Smart move. Will help Cisco with its enterprise strategy

Cisco already has a competing product with Meeting Place - the only difference is that Meeting Place is premise and WebEx is hosted.

This won’t have anything to do with it’s $300k telepresence solution - totally different solutions with radically different price tag.

I suspect this will go well beyond MS and Cisco. With PLM finally getting some broad adoption (many people I know working corporate only reported moving to PLM in the last couple of years) and those vendors increasingly moving to provide services for small business, unified communication becomes a much bigger and broader deal.

Now know why the increase in Webex stock price last several months.

Leakage?

[...] Malik, von GigaOM hält die doch sehr teuer bezahlte Übernahme für ein strategisches Schachspiel mit Microsoft, die [...]

[...] Source: Cisco [via GigaOm, CNet, and [...]

With Web 2.0 companies like Yugma, Yugu, Glance, View, DimDim, I think Cisco/Webex will loose ground in the SME space. Seems expensive given it’s older technology, with higher cost structure.

[...] tend to agree with Om Malik’s opinion in that they may be doing acquisitions like this in order to compete with everyones favorite [...]

[...] any case, WebEx is an interesting purchase to make. I think Om is right that the service makes a natural pawn (or maybe a rook) in the chess game with Microsoft for supremacy in the in-between world of Web and [...]

I cant get this.. totally stumped..

I agree with all rationale on adding strength to SMB focus and so on… BUT lets not forget that Webex
- literally sucks when you try to use it - somebody mentioned above that Adobe has better service… the list of competitor is quite big
- it is reaching to commodity type service - prices falling rapidly.. the cost of switching is not high for this type of service, so very little hold on customer base!!
- last year, specially in last few months, Webex has gone out agressively and signed plenty of flat rate contracts to avoid competitors taking market share.. however, this does hurt the overall space..

Given their pretty good record of successful acquisitions, you would expect better move than this!

from cisco, that is.

WebEx is definitely the best product .. I have been involved in hundreds of instances where tech support simply send me a webex link and after clicking it it initializes , launches the app and the desktop is shared within 20 seconds. Till to day I have never experienced any issues with WebEx. In any case they were the pioneer (at least in the windoze world) and if you forget great free software like RealVNC. Of course Windoze sucks in any case.. a OS like creature that evolved into a monster with remote connectivity slowly built into it (as opposed to open systems and Unix where ssh / telnet or other kinds of remote connectivity was the norm from the 60s). Microsoft windows is a backward Operating System and everyday even from a desktop perspective the gap between windoze and Linux is coming down. Linux adoption will only grow in the days to come and with Microsoft’s stubborn approach of not playing nice with anyone else will only accelerate its eventual demise.

I understand making acquisitions when Cisco’s stock is overvalued but I still do not understand buying versus building when the buy price is 3.2 Billion. I am confident I could build a team that could make a better product than Webex for 1 billion. I would then have 2.2 billion to market my new tool.

What happens to the Latitude Communications product that Cisco acquired?

Pfff!!! gone in smoke…..

Cisco has spent years integrating Latitude into its Unified Communications products.

I guess the latitude stuff can’t hold up as a Hosted product - thats where Webex comes in.

Selling a lot of Video intensive applications is good for the company’s core router business too!

Yeah Herb and I am confident that I can gather a team for 1 million that can BYA. I love the way WebEx work.. I just dont understand why many people here are cribbing about it. Is it something else beside technology .. something that now a days consumes many of our northern brethens…something political ..he he ?

Cisco is not only going to be head to head with MSFT. They will also be up against, Google! Then lets not forget Skype will follow down this path as will in some form. And it only gets better! Adobe is following down this path as well.
Bad move CSCO…looks like they are running out of ideas!

Lol - yep while Cisco may be buying a trusted ‘brand’ in Webex it still doesn’t make any sense the way it’s been explained by a lot of people.

It initially sounded like the old dot com buybble strategy of “Synergies”

I even have a joke theory - The acquisition strategy is being driven by the Treasury Department in Cisco who have so much cash in the bank just sitting there they decided the ROI on the acquisition was higher than the T bills they are currently invested in (and less work to manage as you said it’s already a stable and trusted brand).

BTW I have another theory as well but for that you’ll need to go to my blog and search on ‘Orative’ for those of you too lazy to do so wait until Cisco’s next announcement about them buying an IM platform and you’ll get why they bought Webex.

It’s just the extension of any form of communication, any time anywhere.

Cheers,
Dean Collins
http://www.collins.net.pr/blog

the latitude product is alive and breathing as meeting space.

cisco does over meeting space as a hosted platform but not to the same degree that webex does - it more of a “one off” for larger enterprise customers.

[...] It should have, afterall, it is not every day that a web company gets bought for $3.2b dollars. GigaOM had flattering things to say about the move, which appears to be yet one more move by Cisco to compete with MicroSoft in the [...]

[...] numero 4: Cisco che compra società curiosamente lontane dal suo core [...]

[...] justification for the $3.2 billion purchase of WebEx. However, it was on the conference call, Chambers really chanted the Web 2.0 [...]

I landed on this, very cool and interesting project for desktop sharing. WebEx seems over rated looking at some thing free and open.
Just quoting from the site directly.

What is ShowMyPC.com?
This is an open source Remote PC access project, an alternative to subscription
based sites like WebEx or Gotomypc.
ShowMyPC uses SSH port forwarding mechanism using Open Source SSH client plink
and VNC Remote access software. Users can use there own middle SSH server.
No registration, no logins, all open and free. Read More.

Interview with Rajeev Purnaiya : Founder of Hooeey
Rajeev Purnaiya was born and brought up in Bangalore. he sold for an estimated $4 million to WebEx (WebEx subsequently was acquired by Cisco for $3.2 billion).
Founding CyberBazaar was one of the best feelings for him and his next big thing is Hooeey. Let’s find out more…
http://www.loscreador.com/2007/06/21/interview-with-rajeev-purnaiya-founder-of-hooeey/

[...] that doesn’t mean WebEx (acquired by Cisco Systems for $3.2 billion) has anything to worry about right now, for Dimdim is still a work in progress. [...]

[...] the great grandma of online meeting providers acquired by Cisco for $3.2 billion, now has to fight back against upstart competitors providing web meetings at a flat monthly rate. [...]

[...] is a leader in the online web conferencing space. Press Release | TechCrunch | GigaOm  | [...]