News

Cisco Causes a Stir With Hosted E-Mail Service

• By Herb Torrens
• November 12, 2009

Cisco's announcement of a new hosted e-mail service is causing high-pressure rumblings in the cloud computing space.

On Monday, Cisco rolled out its Unified Communications System 8.0 product, the latest version of its flagship UC offering. One of the 61 "updates" to version 8.0 is WebEx Mail, an online e-mail service that works with Microsoft Outlook.  

Cisco now competes with the likes of Google, IBM and Microsoft in the hosted e-mail space. At the same time, Cisco serves as a partner with Microsoft on many UC integration efforts.

Will WebEx Mail and Cisco's UC platform put Cisco into direct competition with Microsoft, its partner?

"This is an important question," said Laurent Philonenko, vice president and general manager of Cisco's Unified Communications Business Division, in a telephone interview this week. "It is not our goal to go head-to-head with Microsoft in any of the UC categories. Our one goal is to get the newest and best UC technologies to our customers."

Philonenko described WebEx Mail as part of a healthy competition in the market aimed at meeting customer needs.

"We do compete with several other companies in the UC space, and there are areas such as messaging, telephony and now e-mail where our offerings overlap with Microsoft," Philonenko said. "But, the bottom line is we want to work together with all of the companies to provide better technology and more choices for the customers."

He said that going head-to-head with Microsoft in the online e-mail space is a very small part of the UC equation, which includes videoconferencing and messaging, document collaboration, presence and more.

"When you talk about going head-to-head with Microsoft, what about Microsoft going head-to-head with us in telephony?"

Cisco's announcement comes amidst signs of increasing competition in the online services space. Earlier this month, Microsoft announced reduced pricing for its Business Productivity Online Suite (BPOS) Standard offering, as well as its Dynamics Online service. The BPOS Standard service, reduced to $10 per user per month, includes hosted e-mail via Microsoft's Exchange Online platform, along with hosted collaboration via SharePoint Online, Office Live Meeting and Office Communications Online.

In another sign that competition is brewing, Google's commercial Gmail service is being discounted to less than $3 per seat per month, according to a report released on Wednesday by Matthew Cain, research vice president at Gartner. The report added that IBM has also reduced its pricing for some cloud offerings to $3 per user per month.

Cisco's new WebEx Mail service includes "mailboxes with Outlook (MAPI) and Active Sync support for $5 per user per month," according to Gartner's report. Users can also opt for e-mail through the browser only "for $3.50 per user per month."

Cisco uses e-mail technology that the company acquired when it bought Postpath last year. WebEx Mail also uses Zimbra's open source AJAX interface, according to Gartner.

Gartner's report, "Cisco Confronts Microsoft With Cloud E-Mail Service," can be accessed here (may require registration).