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Cisco's planned $3 billion acquisition of video conferencing market leader Tandberg represents major consolidation in an industry that is already down to a select few commanding players. That could mean a major boon or broadside to the channel, depending on the vantage point, observers told Channelweb.com Friday.
For starters, the move gives Cisco a broader reach into midmarket and small business territory it couldn't touch with the high-end TelePresence, and also takes Tandberg out of play, vaulting Cisco into the number one spot for video conferencing market share worldwide.
But more broadly speaking, for channel partners of Cisco, Tandberg, and their competitors, it's a seismic move in a marketplace and also a potentially positive one. Cisco partners will broaden their reach, competitors get to trumpet their scarcity and independence against the Cisco machine, and the video communications market becomes more popular than ever -- a rising tide that will float a number of boats.
"On the macro scale, it's good for the industry as a whole," said Joan Vandermate, vice president of marketing for Polycom's video solutions group. "Cisco is a major player with a capital 'm,' and they're not going to throw money away on a minor submarket, so it validates the idea that this market is a growth opportunity and that after two decades, video is finally here."
Vandermate said that from where she sits at Polycom, it isn't so much that Cisco will now have Tandberg's portfolio as Polycom no longer has to compete with both Cisco and Tandberg.
"Tandberg's been very publicly on the market for a year and half, remember, so it was bound to be somebody," Vandermate said. "For us, it's one fewer front to fight on."
The move by its very nature, however, is disruptive for the channel. Cisco and Tandberg partners told Channelweb.com they greet the acquisition with a mix of excitement and trepidation.
"We're both a Tandberg partner and a Cisco partner, and I think that our challenge in the past has been to figure out how video fits in our overall go-to-market strategy," said Mike French, vice president of marketing for INX, a Houston-based solution provider and Cisco gold partner. "It's almost impossible to segment out video from unified communications and collaboration, but when you talk about the video component in our collaboration suite, we were struggling to figure out from top to bottom how to present the right video solutions and align the right partners."
French said INX was committed to Cisco's TelePresence at the enterprise level but lead with Tandberg in midmarket and small business plays. The thought of Tandberg as a part of Cisco means INX doesn't have to choose, at least between manufacturers.
"We're tickled pink that this happened. It solves a problem for us having to work with two distinct manufacturers and two video platforms for a single collaboration," he said. "The challenge now for Cisco and Tandberg is how they're going to integrate everything very quickly."
It's there -- how Tandberg products will fit into Cisco's overall portfolio -- where things will get sticky, channel observers contend.
"I'd like to see Cisco protect that [Tandberg's] partner base and not just all of a sudden open up the product line to their entire channel," French said. "How is Cisco going to help those partners that have already made significant investments in Tandberg and what's the roadmap for integrating Tandberg, specifically the collaboration software. Is it all going to migrate to WebEx? Plus, as a marketing guy, how are they going to market the two families together. What suites stay? There are very strong intersections all over the place. Tandberg has a high-end telepresence solution that competes directly with Cisco's TelePresence. They can't keep both, so what happens there?"
"We need to work with Cisco and see where Tandberg is going to land within the Cisco architecture," said William Corbin, executive vice president of global strategic relations at Westcon Group and top executive at Comstor Worldwide, the distributor's Cisco-centric unit. "But we're really excited about it. And what an aside for [VARs] who have a vested interested in telepresence communications. This presents a tremendous upside for them and will probably open the eyes of those partners who are going to be toying and thinking about adjacent video technologies anyway."
Other channel partners are concerned that strong Tandberg business would get swept away as Tandberg's channel is folded into Cisco's massive partner community.
"I really don't know what to make of it at the moment. It seems like a good thing, but I love Tandberg and I love a lot of what they do and it's going to change my business a lot if Cisco suddenly sunsets a lot of that stuff and gives us no indication of what to lead with," said one solution provider, who asked not to be identified. "Plus, everybody in the world sells Cisco. Guys down my street sell Cisco, not necessarily video, and I sell Tandberg. Are they getting my business because Tandberg's video portfolio is now in their reach automatically?"