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Microsoft and Cisco: The Happy Couple...For Now

In the glow of a late-summer morning, they seemed so happy together. Steve Ballmer and Cisco CEO John Chambers spent yesterday morning verbally nuzzling each other and chatting happily with the aptly named Charlie Rose. (Yes, he's the guy who hosts a show on PBS that we don't watch but claim we do in order to sound more sophisticated than we really are. Hey, don't the reruns of "King of the Hill" come on at the same time? We have our priorities.)

Anyway, the two corporate titans talked about unified communications and about how their companies, increasingly competitors in the space, will continue to make sure that their products work together in order to keep customers happy. Oh, it'll be delicate, they said...what with the software juggernaut and the networking monster finally meeting on the same turf to do battle. But hey, it's all about customer satisfaction, reasonable collaboration (although, nothing too crazy, now) and coopetition, right?

Well, to some extent, it probably is. After all, partners tell us that customers want Cisco's back-end networking infrastructure tied to a Microsoft front-end (meaning, primarily, Office, but also Exchange and SharePoint) to form a perfect hybrid union of unified communications. Lee Nicholls, global solutions director for Microsoft technologies, says that his company, global IT services provider and Microsoft Global Alliance Partner Getronics, has made a tidy sum doing that type of work recently.

Customers are "taking their existing, trusted, proven Cisco back-end and wiring it to new communications infrastructure from Microsoft," he says, noting that collaboration between the two companies' wares is already pretty good: "Office 2007 is able to deliver voice mail from Cisco platforms," he adds.

But as we well know, what customers (and sometimes partners) want and what vendors want don't always end up being the same thing. Surely, you don't believe that Steve Ballmer and John Chambers will be happy to nudge gently into each other's installed bases and play to their relative companies' strengths?

Oh, no. That's not how they got to be where they are. Don't let their cuddly talk fool you: Each CEO wants the whole UC pie, and sharing a few slices of it will not be an option. (Hey, give us a break -- we're writing this around dinnertime.) Partners who work heavily with both vendors, we predict, can start expecting some serious pressure to "choose a side" soon, if they haven't experienced it already.

As for who will win the building Microsoft-Cisco war, the victors could be partners if both companies leverage their competition with each other to improve their wares and give UC -- already a pretty popular notion in a lot of places -- further credibility in the corporate world while at the same time providing plenty of incentives aimed at keeping partners in their good graces.

For his part, Nicholls isn't making any predictions, but he says that if Microsoft enters the battle at a disadvantage, it's only because Cisco has more networking street cred than its rival from Redmond. Microsoft's technology has "caught up" with that of Cisco in unified communications, he says. It's just a matter of changing perception for Redmond now: "It's not that Microsoft isn't good," Nicholls says. "It's just not known."

That likely won't be the situation for long, and there's little doubt that Steve Ballmer saw today's love-in with Chambers as an opportunity to boost Microsoft's UC credibility. Don't expect the CEOs' summer romance to linger for too much longer.

RCP is putting together a story on the changing relationship between Microsoft and Cisco and its effects on partners. We'd love to hear your thoughts on this for RCPU purposes but also possibly for the magazine. Don't worry -- we won't run anything in the magazine until we've spoken to you for a longer interview, and, as always, we'll only run newsletter e-mails with first names. If you want to drop a line about UC, send it to lpender@rcpmag.com, and please let me know if you'd be willing to chat further about this issue.

Posted by Lee Pender on August 21, 2007 at 11:54 AM