Does Cisco buying Skype make sense?

Summary:If you ever watched the later seasons of 24, you'll recall that Jack and his buddies at the Counter Terrorist Unit were always using Cisco Telepresence for video-conferencing. That was no surprise. John Chambers, Cisco's CEO, has long thought that Cisco should be thought of as not just the big dog of networking, but of Voice over Internet Protocol (VoIP) and video-conferencing as well.

I think this is a win-win for both companies.

If you ever watched the later seasons of 24, you'll recall that Jack and his buddies at the Counter Terrorist Unit were always using Cisco Telepresence for video-conferencing. That was no surprise. John Chambers, Cisco's CEO, has long thought that Cisco should be thought of as not just the big dog of networking, but of Voice over Internet Protocol (VoIP) and video-conferencing as well. Alas, while some enterprises bought into this, most people still preferred cheaper, easier solutions like Skype.

Indeed, if you were ask people about VoIP, I have no doubt that, Skype, and not Cisco, would be the first brand to spring to mind. After all, Skype has become almost omnipresent in PC-based VoIP and video-conferencing despite the best efforts of rivals ranging from Cisco to the business video-conferencing vendors such as Polycom and Tandberg to would-be contenders for small-office/home (SOHO) video-conferencing like ooVoo.

Making matters worse, Juniper and Polycom have been invading Cisco's networking hardware/VoIP/teleconferencing turf. And, on top of that, now Google wants in the VoIP business as well with its new Gmail/Google Voice integration package. What's a CEO to do?

I suspect that what Chambers thought was, "If you can't beat them, buy them."

Cisco buyout for Skype makes sense for Skype as well. Skype, despite some efforts such as trying to combine VoIP with private branch exchange (PBX) and Unified Communications systems with Skype Connect, may be popular with people in general, but it's never made much of an impact in the corporate markets. I'm sure Skype's private equity owners would also welcome a buyout more than casting their bread on the uncertain waters of a Skype IPO in this shaky market.

So, there you go. Cisco gets instant brand-name VoIP/video-conferencing recognition throughout the world, Skype owners get cash, and Skype developers should be gainfully employed for the next few years. It sounds like a win-win to me. What do you think?

Topics: Unified Comms, Cisco, Collaboration, Networking, Social Enterprise, Telcos

About

Steven J. Vaughan-Nichols, aka sjvn, has been writing about technology and the business of technology since CP/M-80 was the cutting edge, PC operating system; 300bps was a fast Internet connection; WordStar was the state of the art word processor; and we liked it.His work has been published in everything from highly technical publications... Full Bio

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