Cisco buys PostPath: WebEx to compete with Exchange, Outlook, Office?

Cisco on Wednesday bought email and calendar software maker PostPath for $215 million in a move that may signal bigger plans for WebEx. Simply put, Cisco and Microsoft are increasingly on a software collision course.

Cisco said its latest acquisition will be used to "enhance the existing email and calendaring capabilities of Cisco's WebEx Connect collaboration platform." In a statement (Techmeme) Cisco added that PostPath's software, which was initially designed to support and expand the functionality in Microsoft Outlook, will bolster WebEx's software as a service suite that includes instant messaging, voice, video, document management and other Web 2.0 apps.

The big picture: Microsoft is coupling Office with LiveMeeting, which competes with WebEx. Cisco is returning the favor by going after that Exchange/Outlook/Office juggernaut.

Doug Dennerline, senior vice president of Cisco's collaboration software group, said in a post:

Communications, globalization and automation have flattened the world and transformed the competitive landscape. The traditional competitive advantages of size and scale have been replaced by speed and flexibility. In this new world, effective, adaptive collaboration is critical to achieving sustainable competitive advantage. Today’s acquisition of PostPath is part of our commitment to create a comprehensive cloud-based collaboration platform.

Once you add in better email and calendar support WebEx could become more appealing to the enterprise. PostPath has a Linux based collaboration system built on an AJAX client that doesn't need a browser. Cisco added that the company's strategy is to develop "an integrated collaboration platform designed for how we work today and into the future.

And better yet: PostPath's pitch is that it is an Exchange alternative and a "Linux-based corporate email server."

Let's read between the lines: Doesn't this sound a lot like an end-run around Microsoft Office, Outlook and Exchange just like Google is trying to do with Google Apps? Cisco probably has no desire to compete head on with Microsoft (or at least admit it), but the company obviously sees something here and coupling PostPath with WebEx could be a threat to Redmond. In fact, Cisco could be a bigger threat to Microsoft in the enterprise than Google. Why? Cisco already sells enterprises a lot of stuff. Isn't a collaboration suite really just an extension of the network?

Meanwhile it's clear that PostPaid sees Exchange as a big target. Here's its cost comparison based on a regional office with 2,000 users each with a 1GB inbox (be sure to read the footnotes).

Simply put, this deal will be interesting to watch going forward. PostPath employees will be lumped into Cisco's collaboration software group, which is part of the networking giant's new software unit.