Cisco Leaps Into New Market With Latitude Deal


Cisco Systems jumped into the Web conferencing arena last week when it unveiled an $80 million deal to acquire Latitude Communications.

Latitude, a public company, is the maker of MeetingPlace audio and Web conferencing products and services.

Cisco plans to use Latitude's conferencing technology to bolster its converged communications portfolio, a move that should open new sales opportunities for Cisco partners, said Rick Moran, vice president of IP communications marketing at Cisco, San Jose, Calif.

 
>> Latitude's MeetingPlace will be offered as a product and a managed service.

 

"It's an enormously popular value-add application for people to go back and approach their customer base with," Moran said.

Cisco aims to continue Santa Clara, Calif.-based Latitude's model of offering MeetingPlace as a product and as a managed service, Moran said, adding that the managed service version accounted for 40 percent of Latitude's sales. In some cases, channel partners might opt to provide the hosted services themselves, he said.

Cisco said it also plans to continue offering its own Conference Connection line of audio conferencing bridges.

Interest in conferencing solutions is rising as customer seek ways to improve collaboration, said John C'de Baca, director of the IP telephony practice at InterNetwork Experts, an Addison, Texas-based solution provider.

"Most jobs we do now include large distributed networks with conferencing. So having something like MeetingPlace at our fingertips would be helpful," C'de Baca said.

Cisco plans to tighten the integration between its CallManager VoIP call-processing software and MeetingPlace as part of a broader strategy to integrate voice, video and the desktop, according to Moran. Latitude has been a Cisco partner for the past three-and-a-half years, he said.

Under the acquisition agreement, Cisco said it will pay $3.95 in cash for each outstanding share of Latitude stock.

The deal is expected to close in Cisco's second fiscal quarter, which ends in January.

Latitude, which has about 180 employees, last month reported a third-quarter loss of $1.5 million, or 8 cents per share, on revenue of $8.6 million.