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Cisco's Umi Promise Not Wowing Channel Partners

High-end, home-geared telepresence system may find an audience among technophiles willing to pay a bit more, but Cisco channel partners don't see much opportunity.

Cisco's Umi Telepresence promises to be a transformative experience in consumer video, and Cisco is betting that the high-end pricing -- about a $600 investment in the hardware and software, followed by a $24.99-a-month subscription -- won't deter customers from buying a top-of-the-line telepresence experience.

But solution providers and Cisco observers see plenty of potential pitfalls for Umi, including not only the price point but also interoperability, broadband coverage and potential service contract headaches. Many also don't see how the currently structured, currently priced offering benefits the channel in the short or long term.

"It's kind of head-scratcher, to tell you the truth," said a senior executive at a longtime Cisco partner, who requested anonymity. "Cisco has a good thing going with Telepresence in the enterprise and it has that lovely Tandberg portfolio. But this is a consumer play and if you have Skype and a Webcam or anything else that's good enough for you that doesn't cost an arm and a leg like this, you're kind of giving it the 'that's nice, no thanks', I'd think."

Cisco sought to clarify how partners should view Umi Telepresence. In a Wednesday post to the Cisco Channels blog, Cisco pointed to the expansion of video and telepresence technologies and further growth of the telepresence market as a rising tide that will carry all video opportunities, from consumer to enterprise.

"It is part of our strategy to share technology and innovation across market segments," read the post, authored by Senior Director, Collaboration, Worldwide Partner Organization Richard McLeod. "Cisco TelePresence business solutions and Cisco Umi Telepresence share the same foundation but their features and benefits are designed for their respective audiences."

NEXT: Really Relevant For Partners?


So no, Umi won't have much immediate impact on channel partners, Cisco admitted. Cisco is selling Umi directly, through service providers and through Best Buy, which will also get the installation services business for the systems as needed.

"Initially, Cisco Umi Telepresence will not interoperate with Cisco Telepresence business solutions," McLeod's post read. "However, our vision is to transform life's experiences, connecting people to each other, their ideas and their world."

Be assured, said Cisco's McLeod: "This means it will be business as usual for Cisco channel partners."

But some solution providers echoed comments made by their peers to CRN earlier this week that there's not much to fuss about, especially since Cisco hasn't offered much beyond its "rising tide" implication to suggest how they might benefit. Could partners be useful in selling Umi to small-office or home-office businesses, for example? Does it have to be a consumer-only play?

"Huh?" asked the solution provider. "I look at that, what they said there, and it's attempting to explain what the immediate relevance is for channel partners. And there is none. None at all. I'm sure it's a lovely system, but this is not something I'm going to lose sleep over, especially if it doesn't talk to corporate Telepresence, and it's not something I can sell and service to my small guys."

NEXT: Analysts Offer Mixed View


Analyst reaction to Umi Telepresence this week has been a mixed bag, as well. Steve Hilton, principal analyst at Analysys Mason, said the high price tag wouldn't necessarily deter tech-centric customers.

"Consumers who want the best and newest video communications have it right here at $600 retail price, plus $25 a month for service, plus the monthly fee for Verizon FiOS," Hilton said in an e-mail this week. "The enterprise-grade Cisco Telepresence solutions are absolutely stunning. I would think technophile consumers would be banging down the doors of Best Buy to get this solution."

Others see the price as a serious barrier to adoption, however, especially given the range of free or close-to-free, but lower-quality, video services that Umi Telepresence will compete with.

Shaw Wu, an analyst at Kaufman Bros., said in a research note that Umi is "much better" in quality than other services, but Cisco needs to consider lowering at least the monthly fee to entice cost-conscious consumers.

"We believe there is a market for premium videoconferencing, but it will likely be a high-end niche," Wu wrote.

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