Microsoft-Cisco: Let The Cold War Begin

Today's joint press conference from Cisco CEO John Chambers and Microsoft CEO Steve Ballmer contained the usual blather about "cooperation," "interoperability,"and the "importance of working together" that accompanies these sorts of announcements. You can see/read the gory details here.)

And I guess both parties should be commended for their Web 2.0 candidness, acknowledging frankly their points of collaboration --- and competition. Ballmer and Chambers have identified seven areas of competition: IT Architecture, Security, Management, Wireless & Mobile, Unified Communications, Connected Entertainment, and Small and Medium-Sized Business (SMB). The two companies will invest over 140 people and $40 million in collaborating together.

But make no mistake, the subtext behind all of this chumminess is very much war. Neither vendor is prepared to cede the enterprise market and yet both will play in the area.

And while there will be integration between the two product portfolios, there will be significant value that will only be available when used in conjunction with their own products. Witness the vast array of SIP extensions that have been created within the VoIP market in order to differentiate otherwise "compatible" products.

In the end, this is a relationship that will be tepid at best. As Ballmer said, he has respect for Cisco, but "anything that they do that we do, I have more respect for us. Hardly the sort of statement you'd want to say about a close, dear partner.