Cisco Begins Cross Pollinating its Two Telepresence Portfolios
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1 Intelligence Report: Report Date: June 09, 2010 Cisco Begins Cross Pollinating its Two Telepresence Portfolios Analyst: Service: Market: Arnold, Robert Business Technology and Software Collaboration Platforms, Unified Communications and Contact Center Quick Take Competitive Positives Quick progress integrating Cisco s two telepresence product lines Cisco TIP software supported on Tandberg servers New packaging improves Cisco TelePresence appeal to SMEs Tandberg product enhancements evidence focus, commitment Cisco TelePresence Directory now includes Tandberg rooms Competitive Concerns Cisco TIP still unproven in broader market Cisco TelePresence packages still pricey and sacrifice functionality Cisco TelePresence Directory immature Silos and overlap still pervade Cisco s combined portfolio Event Summary June 8, Cisco announced it is integrating the Telepresence Interoperability Protocol (TIP) on Cisco's newly acquired Tandberg TelePresence Server to deliver immersive, multiscreen interoperability between Cisco and Tandberg TelePresence systems, and with third-party systems. This interoperability solution will be commercially available in late July. Cisco also introduced a host of other offerings in an effort to deliver the most comprehensive set of collaboration choices for customers. Analytical Summary
2 Perspective Perspective: Moderate on the various advancements to Cisco s videoconferencing solutions, because among other improvements, they could make Cisco internally developed telepresence solutions more appealing to SMEs, and bring new value to Tandberg products with enhanced multivendor interoperability support. Still, Cisco will continue to be challenged by lower cost videoconferencing alternatives and needs to win stronger support for TIP among third-party developers. Vendor Importance Vendor Importance: High to Cisco because the company has moved quickly to begin integrating acquired Tandberg technology with its homegrown telepresence products and services. This will help answer some of the many questions partners and customers have about the roadmap. Market Impact Market Impact: Moderate on the videoconferencing and telepresence markets, because extending support for Cisco TIP to Tandberg servers and making it freely available to existing Tandberg telepresence customers will help drive adoption among a wider breadth of enterprise customers. While different interoperability avenues are available, other developers may be compelled to adopt TIP so that their respective systems customers can connect with the combined Cisco-Tandberg telepresence customer base. Competitive Strengths Competitive Positives Cisco just closed on its acquisition of Tandberg in April and is already announcing integration of its telepresence technology with acquired Tandberg telepresence products. These quick developments will help to substantiate Cisco s stance that the Tandberg assets are highly complementary to its homegrown immersive videoconferencing solutions. The integrations will also answer some of the questions partners and customers have had about roadmap plans for the combined videoconferencing portfolio. The Cisco TelePresence Interoperability Protocol (TIP) is now implemented on the Tandberg TelePresence Server. This enables users of multi-screen telepresence units from different vendors products to participate in HD video conferences together. TIP software updates are free to existing customers - an approach that will help drive adoption of TIP in existing Tandberg accounts. The New TelePresence Commercial Express solution packages Cisco TelePresence Manager, TelePresence Multipoint Switch and TelePresence Recording Server into one server utilizing VMware. This lowers the purchase price from a list of $54,000 compared to $120,000 when purchased separately, and it streamlines deployment and licensing. Cisco TelePresence Commercial Express will arm the vendor with a more competitive immersive videoconferencing solution (outside of Tandberg products) for smaller and midsize enterprises. Numerous Tandberg product enhancements demonstrate unbroken R&D focus and commitment throughout the acquisition process. For example, Movi v4 personal videoconferencing now supports a Mac client, ad-hoc conferencing, far end camera control, and ClearPath packet loss software; the intouch control interface now supports Tandberg C-Series Profile; and new software triples telepresence capacity for several MSE TelePresence Server blade options. Dovetailing Cisco Tandberg TelePresence Server support for TIP, the Cisco TelePresence Directory now includes listings for Tandberg standard and immersive videoconferencing rooms. This will allow businesses with investments in Cisco or Tandberg systems to collaborate with a much broader base of colleagues, partners and customers worldwide. Competitive Weaknesses Competitive Concerns Implementation of TIPv6 (the latest version) in the Tandberg systems seems to primarily function as a means to improve compatibility between Tandberg and Cisco gear. Additionally, the Tandberg systems are, to date, the only ones in the industry that have TIP implemented in them. The benefit of this "standard" within the broader
3 market has yet to be validated through broad adoption, ratification by a standards body and tangible benefit. Until broader adoption or ratification happens critics will continue to characterize TIPv6 as another lock-in enabler for Cisco. Cisco TelePresence Express helps to reduce cost but is still pricey compared to less immersive SMB alternatives and it sacrifices functionality to achieve that price. By not including RAID, failover, etc. in the Cisco TelePresence Commercial Express package, Cisco is either going to require customers to purchase additional equipment or lose potential customers who think basic reliability/performance should be included in something that costs more than $53,000 for a complete system. Despite a growing number of listed rooms (as many as 1,000 according to Cisco) the Cisco TelePresence Directory is immature. Specifically the directory is still just a listing of telepresence rooms and does not yet provide the b2b enablement promised by Cisco, such as click to connect or even click to schedule for disparate parties. To be fair, Cisco has not had much time to address many silo issues characterizing its collaboration catalog. An example is WebEx OneTouch (formerly WebEx Engage), which integrates scheduling of collaboration and Cisco TelePresence videoconferencing sessions, but not Tandberg telepresence. Further, Cisco has not clearly articulated plans to reduce overlap between its homegrown and acquired Tandberg immersive videoconferencing products. And as Cisco TelePresence is increasingly positioned for smaller accounts the overlap with Tandberg telepresence systems also increases. Response & Recommendations Oversight of the Cisco TIP should be surrendered to a standards body as planned this summer. This will go a long way help to rebut criticisms by rivals about TIP s proprietary nature. Cisco TelePresence Directory also needs to mature to become the b2b enablement tool promised by Cisco when it was unveiled. Enabling functionality such as click to connect or even click to schedule for disparate parties would make the directory more of an application and service that enterprises can rely upon to help them communicate with other organizations more easily. Keeping with the theme of helping enterprises to communicate more easily, Cisco should expand WebEx OneTouch to support Tandberg telepresence solutions. Cisco should strengthen its positioning for TelePresence Commercial Express solution, making its functionality and use cases very clearly differentiated from lower cost, less immersive videoconferencing products offered by rival developers. Cisco needs to demonstrate forward momentum in the adoption of TIP with it being implemented on a wider range of products from the 11 vendors currently endorsing it. Competitors may point Cisco TelePresence Commercial Express as recognition by Cisco that its immersive videoconferencing solutions are too expensive for the average enterprise. On this front rivals may also emphasize that the new packaging lacks reliability features and does not include the endpoints, peripherals or room décor required for a complete system. Both together and individually HP, LifeSize, RADVISION, Polycom and others should make reference to the interoperability efforts that they completed without TIP. Although LifeSize and RADVISION have already endorsed TIP, all Cisco rivals can prove that there are other avenues to multivendor interoperability. TIPv6 is being positioned by Cisco as SIP+ (the SIP standard and other video standards are endeavoring to solve the issues TIP solves). However, TIP can still be referred to within the broader community as nothing more than another lock-in enabler for Cisco. Rival telepresence developers should be working to provide solutions and services akin to Cisco TelePresence Directory. For example, Polycom with its VNOC should have such capability. Vendors may also assist partners, such as BT Conferencing, to develop directories for their respective customers.
4 Buyer Actions Tandberg MSE Server customers should take advantage of the free TIP software upgrade if they intend to support multivendor telepresence environments. Enterprises interested in Cisco or Tandberg telepresence solutions because of the promises of TIP should request reference accounts in which the multivendor interoperability software is put to the test. Like all interoperability solutions for multivendor environments, it must be proven to reliably and consistently handle multi-stream system switching in a variety of enterprise network scenarios. Enterprises should evaluate Cisco TelePresence Commercial Express, comparing it to alternatives with regard to included components, functionality and overall value for price. Analytical Perspective We are moderate on the various enhancements Cisco has announced for its videoconferencing portfolio. The advancements demonstrate rapid progress by Cisco integrating its homegrown telepresence technology with acquired Tandberg immersive videoconferencing products, and hold potential to increase customer adoption of Cisco TelePresence interoperability software expand as well as competitiveness of Cisco immersive videoconferencing solutions for smaller enterprises. Still, questions about overlapping telepresence products in Cisco s combined videoconferencing portfolio remain, its solutions need maturing and the company will be greatly challenged in its bids for smaller accounts. Cisco s numerous points of integration between its two videoconferencing catalogs strengthen Cisco s stance that it acquired Tandberg for complimentary assets and not simply to eliminate a competitor or a market share grab. The integrations also answer some partner and customer questions about the development direction of the combined videoconferencing portfolio. Among the highlights, Cisco TelePresence Interoperability Protocol (TIP) software is supported on Cisco's Tandberg TelePresence Server (as a blade for the MSE 8710 chassis and with the standalone TS 7010 appliance). This enables users of multi-screen telepresence units from different vendors, as well as all Cisco Tandberg products to participate in HD video conferences together. TIP software updates are free to existing customers to help drive TIP adoption within Tandberg s established base. Also helping to drive TIP adoption, Tandberg room and immersive telepresence studios will be listed in Cisco TelePresence Directory, allowing customers that have deployed Cisco or Tandberg telepresence systems to connect with a much broader swath of other businesses. Further, the many Tandberg product enhancements demonstrate unbroken R&D focus and commitment throughout the corporate M&A process. For example, new software triples telepresence capacity for MSE 8710 TelePresence Server blade (up to 48 screens in a multi-screen telepresence call with continuous presence) and MSE 8510 Media2 blade (up to 60 screens in a single-screen multipoint call with continuous presence). To aid Cisco TelePresence competitiveness for smaller and midsize enterprises the new TelePresence Commercial Express solution packages three core components into one server utilizing VMware for drastically reduce pricing compared to a la carte, streamlines deployment and licensing. However, Cisco TIP needs to mature and be more widely implemented. TIPv6 (the latest version) seems to function primarily as a means to improve compatibility between Tandberg and Cisco gear. The benefit of this "standard" within the broader market has yet to be validated through broad adoption, ratification by a standards body and tangible benefits. Until broader adoption or ratification happens critics will continue to characterize TIPv6 as little more than another lock-in enabler for Cisco. And despite a growing number of listed rooms (as many as 1,000 according to Cisco) the Cisco Telepresence Directory is also immature. Specifically the directory is still just a listing of telepresence rooms and does not yet provide the b2b enablement promised by Cisco, such as click to connect or even click to schedule for disparate parties. In the SME sector Cisco TelePresence Commercial Express is too expensive for the elements (no endpoints, peripherals, etc) and functionality (no failover) provided compared to alternative videoconferencing offers from LifeSize, RADVISION, Vidyo and others (though perhaps not as immersive). And although it s still early days, Cisco has yet to address the numerous silos and overlap that now exists in its combined videoconferencing and collaboration portfolio. All materials Copyright Current Analysis, Inc. Reproduction prohibited without express written consent. Current Analysis logos are
5 trademarks of Current Analysis, Inc. The information and opinions contained herein have been based on information obtained from sources believed to be reliable, but such accuracy cannot be guaranteed. All views and analysis expressed are the opinions of Current Analysis and all opinions expressed are subject to change without notice. Current Analysis does not make any financial or legal recommendations associated with any of its services, information, or analysis and reserves the right to change its opinions, analysis, and recommendations at any time based on new information or revised analysis. Current Analysis, Inc Signal Hill Plaza, Second Floor, Sterling, VA Tel: Fax: +1 (703) Current Analysis, Inc. 2 rue Troyon, Sevres Cedex, Paris, France Tel: +33 (1)
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