Microsoft's announcement yesterday that it has entered into a four-year strategic partnership with HP will have rival Cisco sit up and elevate its channel strategy for its bundled blades.
A cash-rich Cisco is anyways a late entrant firm that wants to move up the value control from switch to server. In the short run, it is limited by its who have been primarily network integrators or resellers. HP, on the other hand, has a significant ISV and partner ecosystem on infrastructure and is a significant player in BFSI, government, defence, education and healthcare sectors.
This announcement would only hasten Cisco to engage and elevate its channel strategy to compete with HP if its 'bundled blade' strategy has to pay-off, said T.R. Madan Mohan, Managing Partner at Browne and Mohan.
In fact, Microsoft and HP had an agreement in 2006 to jointly address UC market with Microsoft software and HP blade server. With this new partnership, the duo wants to address a larger part of UC, which is predominantly deployed at middle level managers (less of video, and more of messaging and other collaboration tools). MS Sharepoint and OCS have been gaining market share, and HP's revenues around these technologies have been increasing.
HP with its existing ProCurve offerings and expected commoditization of soft phones would like to bundle these offerings. It is in tune with the overall strategy of HP, which sees itself as an infrastructure company. With enterprise telephony now becoming part of infra-layer, this fortification is quite logical.
However, the alliance may not hurt Microsoft's equation with players as Cisco and Nortel. Essentially because in the UC market, players are engaged in co-optition, wherein they compete for some part of the revenue and jointly engage to get another part of the revenue.
Microsoft with its software-centric approach plays complementary role for network players like Cisco/Nortel. Given that no dominant approach of UC has emerged (that is software or hardware centric), such a co-option model would continue for sometime, said Mohan.
In UC, the primary segments are banks (especially for their commercial operations because of limited resources in one geography, but demand all across), IT (to manage virtual teams), health (telemedicine), and education among others.
And what will be the impact on India? According to Mohan, HP+Microsoft (OCS) combination is a value for money, less video focused approach for collaboration (that may find takers in cost sensitive, non-human presence required business). The challenge today in high end UC, is that vendors have difficulty in justifying the ROI and with hosted and leasing models in fray. "The impact in India is insignificant. Also, the overall investment in UC itself is pretty low."
Cisco, however, is not giving the alliance too much weightage. Varghese M. Thomas, Head - Public Relations -India & SAARC at Cisco said since the UC solutions/systems should be open and interoperable, everybody needs to have a framework where they can interoperate and work with each other. "That is when the true value of UC will surface."
He said, "Cisco and Microsoft work together in many areas of our businesses and both compete and collaborate in areas such as unified communications and collaboration. Cisco and Microsoft have a strong track record of collaboration around our respective products and technologies, and we continue to look for opportunities to build on these successful initiatives, and to new collaboration and integration points moving forward. Many customers use both Microsoft and Cisco technologies in their networks, so Cisco believes it is important that our products and roadmaps for the future are aligned."
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5/20/2009
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