Cisco Takes Aim At Microsoft With Acquisition Of MindMeld

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Cisco's acquisition of artificial intelligence and machine learning startup MindMeld is a direct shot at unified communications and collaboration (UC&C) rival Microsoft, according to partners.

"What Cisco is doing is directly going after Microsoft that is integrating all different pieces of software that we collaborate with in real time and have access to data in real time," said Jamie Shepard, senior vice president for health care and strategy at Lumenate, a Dallas-based solution provider and Cisco partner. "Microsoft is getting very much into AI and machine learning and analytics and things of that nature – they're trying to compete with the Googles and Amazons right now … Microsoft is a good model to emulate here and that's kind of what Cisco's doing."

Cisco and Microsoft have been battling it out for years for leadership in the UC&C market.

[Related: Cisco To Acquire AI Startup MindMeld For $125 Million To Boost Spark UC Products]

The San Jose, Calif.-based networking giant has been edging further ahead of Microsoft for market supremacy, owning 15 percent of the total UC&C market, compared to 12.5 percent from Microsoft, according to fourth quarter 2016 data from research firm Synergy Research Group.

"Cisco and Microsoft both work together and compete aggressively against each other," said one top executive from a solution provider who is a longtime partner of both Cisco and Microsoft, who did not wish to be identified.

"Microsoft is clearly going after machine learning and AI in the cloud, and they're out in front of Cisco there. [Cisco] wants that and wants to be the leader of the 'workplace of the future' and that's where AI is going to take over," said the executive. "So MindMeld is the perfect step in the direction and will give them more ammunition."

Although Cisco owns 15 percent of the total UC&C market, Microsoft is winning the cloud battle. The Redmond, Wash.-based software giant owns 9 percent of the hosted and cloud UC&C market, compared to Cisco's 5.5 percent.

Cisco revealed plans on Thursday to acquire San Francisco-based startup MindMeld for $125 million. The startup provides a platform that makes it possible for companies to create intelligent conversational interfaces for any app or device.

Cisco said it will integrate MindMeld's technology into its Cisco Spark portfolio to "bring voice AI to meeting rooms" on a global basis.

"The workplace of the future is one powered by AI," said Rowan Trollope, senior vice president of Cisco's IoT and Applications Group, in a statement. "This is a significant step toward making that workplace a reality. Integrating MindMeld into the Cisco Spark platform will transform how users interact in Cisco Spark Spaces, Cisco Spark Meetings, and Cisco Spark Care."

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