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An actual conversation last week between me and my colleague, Jim Burton:

Blair: Do you know what the Microsoft announcement today is going to be about?
Jim: Yeah, the speech company they’re going to acquire.
Blair: Oh, Tellme.
Jim: Huh? The call will be about Microsoft acquiring a speech company.
Blair: I know, Tellme.
Jim: (wondering if it’s a bad cell phone connection or Blair is being daft) I just told you.
Blair: No, the company Microsoft is acquiring is called Tellme.

Sometimes life really is like a scene out of an Abbott and Costello movie, but last week was quite a week: Microsoft announced plans to acquire Tellme, and a few days later Cisco announced its plans to acquire conferencing company WebEx.

What do these two acquisitions have in common? Hosted services. Both center on providing communication capabilities as a service, rather than as an on-premises solution. Many small and medium-sized businesses prefer to use a hosted service rather than investing in premises equipment, so the ability to provide such services will help both Microsoft and Cisco in the SMB market.

Why else would Microsoft acquire Tellme when it already has a speech server platform (which it’s combining with its Office Communications Server program)? Beyond its speech capabilities, Tellme provides Microsoft with a hosted platform that can deliver a range of services and applications. Jeff Raikes, president of Microsoft’s Business Division, acknowledged, “Tellme’s technology will enhance and accelerate Microsoft’s plans to put voice technologies in more of its products…It is the best hosted-service platform for speech-enabled (services) in the world today.”

Microsoft’s and Tellme’s speech recognition technologies can be combined to let people make phone calls simply by speaking someone’s name, or asking your mobile device to find the nearest gas station.

Meanwhile, Cisco’s acquisition of WebEx expands on Cisco’s move into conferencing/collaboration, and builds on its acquisition of Latitude Communications, a provider of voice and web conferencing solutions, now packaged as Cisco Meeting Place. Cisco has done a good job of leveraging that technology for medium-sized and large enterprises, but the SMB market was not being served.

WebEx gives Cisco entry into the hosted applications business with a full-featured conferencing application. WebEx is the leader in conferencing services, based on its global private network, Media Tone Network (MTN), which is designed for secure delivery of on-demand applications. This network-delivered service and platform enables Cisco to expand hosted services beyond conferencing to companies of all sizes.

In a conversation with Cisco last week, I was told that the company will focus on the distribution synergies that WebEx provides, particularly in SMB, which is WebEx’s market strength. According to Charles Carmel, Director, Corporate Business Development, “Service delivery is a more natural fit in the SMB market than enterprise market. There’s a lot of technology that Cisco packages as a premises solution that we could package as a service and take it into the same environment that WebEx is delivering today.” In other words, expect that, over time, Cisco unified communications services will be packaged with the WebEx service model.

This all raises an important question: What will be the effect of these actions on Microsoft’s and Cisco’s service provider businesses? Will Microsoft continue to have the Tellme services offered through Tellme’s existing distribution deals with service providers? And how will Cisco’s acquisition of WebEx impact Cisco’s service provider customers who in some cases compete with WebEx?

The services market is going to heat up-and fast. No doubt there will be new partnerships and acquisitions on the horizon to enable enterprise-focused companies to expand beyond the premises.

What do you think? Drop me a note at bpleasant@commfusion.com-or post your comments here in the VoiceCon Unified Communications eWeekly forum.

Blair Pleasant
COMMfusion and UCStrategies.com

Posted in Applications, Blair Pleasant, Unified Communications |

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