Cisco videoconferencing leaps forward

Networking company picks up SME-focused WebEx for £1.65bn, enhances high-end TelePresence product and announces first TelePresence customers

Cisco is to buy online collaboration firm WebEx, the networking giant announced on Thursday.

The acquisition, which is expected to complete in the fourth quarter of Cisco's fiscal year 2007, will see Cisco purchase all the publicly floated company's outstanding shares for $2.9bn (£1.5bn). Together with an additional $300m (£154m) for WebEx's cash balance, the total bill will be around $3.2bn (£1.65bn).

"As collaboration in the workplace becomes increasingly important, companies are looking for rich communications tools to help them work more effectively and efficiently," said Charles H Giancarlo, Cisco's chief development officer, on Thursday. "The combination of Cisco and WebEx will deliver compelling solutions accelerating this next wave of business communications."

Giancarlo added that the WebEx acquisition would be a boost for Cisco's presence in the small-business sector.

Cisco has claimed it will maintain WebEx's existing business model, which is subscription-based and includes services such as real-time and asynchronous data conferences over IP, online document sharing and videoconferencing.

Meanwhile, the first confirmed customers for Cisco's more high-end TelePresence videoconferencing package have been announced.

On Thursday, BT — one of TelePresence's three UK resellers, or "Advanced Technology Partners" (ATPs) — revealed that it had sold the system to the German Media-Saturn group. The group operates in 14 European countries and TelePresence will be deployed in its German, French and Russian offices, with more to follow.

And, on Friday, Cisco itself announced that the Regus Group, providers of managed offices across the world, will also be taking on TelePresence. The Regus deal will see the public offered the ability to rent time in TelePresence rooms.

Until Thursday, no buyers had been identified for TelePresence, which has been on sale for five months at the hefty price of $299,000 (£153,000) for a six-seater room. The system includes three 65-inch plasma screens, operating at 1,080-pixel high-definition (HD) resolution, three HD cameras and "spatial audio" surround-sound, together with a custom-built half-round table. The idea is for users at two or more sites to be able to see their counterparts in life-size and feel that they are, in effect, just sitting across the table from them.

Cisco's big competitor in these stakes is the alliance of HP and Tandberg, which are co-marketing products including HP's $425,000 (£218,000) Halo Collaboration Studio. Unlike HP, Cisco has designed everything in the TelePresence suite — except the chairs —  from the screens to the tables. Tandberg's director of strategic alliances, Steve Vobbe, recently told ZDNet UK that Cisco's proprietary approach meant Tandberg had no plans to integrate its endpoints with TelePresence.

On Friday, Cisco also announced significant enhancements to TelePresence, including a "MultiPoint" bridge (priced at $99,000, or £51,000 per site) to allow more convenient switching on the screen between sites, where three or more sites are connected. Up to 36 screens are now permissible on each network.

Other enhancements include an optional overhead camera to make it easier to collaborate on documents between sites.