Sunday, March 18, 2007

Cisco and WebEx - Part II

What Cisco has bought, by spending $3.2B, is a powerful operating network that can be enhanced endlessly by adding more value to the users of the network.

WebEx calls their network MediaTone Network and has been successfully using it to conduct real-time collaboration for their subscribers. (I have been a participant on several such collaboration sessions although I have used only solutions where audio was networked through a 800-number network rather than over the IP network). MediaTone Network is accessed over the Internet; however, once on the MediaTone Network, the collaboration information traverses primarily the MediaTone Network except, of course, the first and the last miles.

Now, just imagine any new kind of software as a service (SaaS); this powerful private network need only be programmed with additional applications to provide this new service; if necessary, of course, you can throw more hardware at the problem. And, if you take a look a the WebEx financials, you'll find that their gross margins are significantly higher than the 65% we are accustomed to from Cisco. This is a win-win situation for both Cisco and WebEx. (Actually, it has already been a win for WebEx in their recent stock price). I wish that this merger goes through. (I own some shares of Cisco).

Thursday, March 15, 2007

Cisco and WebEx

This morning's announcement that Cisco has agreed to acquire WebEx makes it a bit clearer as to the direction Cisco is taking for its evolution. Web-based online meetings are what WebEx has been serving up to its customers, mainly small & medium businesses (SMBs), and this acquisition has a potential to turn small businesses completely online. The advent of Google Apps is but a modest start, also in that direction. And, Microsoft Live has been online for quite some time now.

Makes you also wonder about the kind of value-added applications that would succeed 20-25 years from now.