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Summary:

In order to fight its ongoing battle against Microsoft and Google on the whole issue of “collaboration,” Cisco today added yet another weapon to its arsenal. The San Jose, Calif.-based company said it’s buying PostPath, which will allow it to add email and calendaring features to […]

In order to fight its ongoing battle against Microsoft and Google on the whole issue of “collaboration,” Cisco today added yet another weapon to its arsenal.

The San Jose, Calif.-based company said it’s buying PostPath, which will allow it to add email and calendaring features to its WebEx collaboration software, for a whopping $215 million. The acquisition shouldn’t come as a surprise: John Chambers, CEO of Cisco Systems, recently said: “We believe we are entering the next phase of the Internet as growth and productivity will center on collaboration enabled by networked Web 2.0 technologies.”

PostPath, a relatively unknown start-up based in Mountain View, Calif., makes a Linux-based e-mail system that includes an independent AJAX Web client and works well on mobile clients. OK, it’s nothing more than a Linux replacement for Microsoft Exchange, sort of like Zimbra, which got acquired by Yahoo last year for $350 million.

It came out in stealth in 2006 and has operated under the radar for a long time. It recently announced that it worked with Apple’s iPhone. It is not clear who funded the company or for how much. The board members include representatives of Worldview Technology Partners, Matrix Partners and JAFCO Ventures.

Despite this acquisition, in addition to $3.4 billion purchase of WebEx, Cisco is primarily a hardware company that makes a living selling switches and routers. Nevertheless the company has the sales force and the channels to dent Microsoft’s domination. Oh, this battle is more fun to watch than anything else out there.

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  1. well, kudos to cisco for exploring software – but honestly, doesn’t this direction feel a bit like mcdonald’s when they tried to sell italian food? come on ‘mon, restrain your brand…

    and anyways, free tools for this are taking off – have you checked out the new dimdim? you oughta do a feature over at ostatic on this killer open source webexesque app….

  2. Once again, Cisco makes a sound investment in an email technology vendor. Just like it did with IronPort. Great choice.

    I have to take issue with Om’s comment that PostPath is like Zimbra. The architecture is quite different. See http://richi.co.uk/blog/2008/08/cisco-buys-exchange-like-vendor.html for reasons why.

  3. looks like they are getting ready to buy ctxs

  4. Unified Communications are Here Wednesday, August 27, 2008

    it is becoming increasingly clear where the action is really at nowadays on the internet (enterprise web 2.0 is truly here?). it is a race to provide a “unified communications” or “complete collaboration” solution.

    a “complete collaboration” solution is integrated SaaS, web based, messaging, collaboration and conferencing solutions (email server, task management, contact management, calendaring, document management, forums, chat and web conferencing all in one).

    microsoft’s shot at it is the recently launched “productivity suite” (hosted exchange+sharepoint+livemeeting). Google is also aiming this domain with google pages, google apps, gtalk, gmail etc. and now Cisco by adding functionality to webex.

    but for me, all of the above solutions are “SaaS for big organizations”. companies traditionally targeting the growing business domain are also moving towards a “unified communications” solution. hyperoffice recently launched hypermeeting , its web conferencing solution fully integrable with HyperOffice, making it a fully integrated messaging + collaboration + conferencing solution.

    Check out my take on the whole thing here

  5. @Dave — Cisco needs to buy/build software — fast. Microsoft, with Exchange and OCS, intends to merge e-mail, IM, collaboration and telephony into a single software-based platform. Microsoft software, of course. All the rest will be simple software plug-ins or add-ons to the MS platform, and all the hardware will be commoditized. There will be no PBX market any more and no more $billions in PBX sales for Cisco.

    @Om — even with this purchase, Cisco is still missing the magic advantage of Microsoft: control of the desktop (MS Outlook). That is why we at Unison built both a server and a fat desktop client for Unison. You can’t just replace the back end, as PostPath does — it doesn’t work that way.

    Separately, as someone who helped build the world’s largest Microsoft SaaS company (Intermedia), I can tell you that unified communications will not be ‘in the cloud’ for at least 10 years — I feel that is an idealistic Silicon Valley view. Today, only 1% of MS Exchange seats are hosted (around 2m out of 200m seats worldwide). Most corporate IT buyers are too concerned about security and ownership of content to go the SaaS route today — and unified communications is even MORE difficult to do as SaaS than standard Exchange/OCS/SharePoint hosting, because of latency and VoIP issues.

    For this reason we are mostly targeting Unison as an on-premise solution, however unfashionable that may be in Palo Alto ;)

    Rurik Bradbury
    Unison Technologies

  6. Cisco Makes a Bet on Web Collaboration Buys PostPath | Workstreamer Blog Wednesday, August 27, 2008

    [...] Story via GigaOM [...]

  7. Cisco seems to be on a path to get into the SaaS platform business. Their ad campaign on “Human Network” is brilliant and depicts them moving from networking hardware equipment to human collaboration. The future battle with Microsoft would be on services provided and not software, Cisco therefore should be in good shape.

  8. PostPath launched at DEMOfall 06 and raised $30 million in VC funding closing a C round Jan. 2007. The third funding round of $17.5 was led by JAFCO Ventures; existing investors Matrix Partners and Worldview Technology partners also participated.

  9. I can’t figure out why a company that sells switches wants to deal with software that does some Exchange like “stuff” Is Cisco a software company? This is very confusing.

  10. There is some weird stuff with postpath. I was looking at their screen shots of the ajax client, it “is” zimbra, not like but is. I guess there back end could be different though. Very strange.

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