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AI World Conference & Expo · Boston, MA · December 11-13, 2017

This syndicated post originally appeared at No Jitter - Recent posts by Zeus Kerravala.

This was a good acquisition for Cisco on a number of fronts.

I read Eric’s blog on the acquisition of Versly and he debates on whether this was a good acquisition for Cisco or not. I’d like to weigh in with my thoughts. In case you didn’t read Eric’s blog (and you should), Versly is a small start up based in San Francisco that focuses on allowing users to collaborate at the document level using Microsoft Office applications. From what I understand, Versly is very small, only about 10 people in total so the risk here to Cisco is marginal. It’s akin to the first-place Red Sox (and this year’s World Series champs) trading for Eric Bedard. There’s a high amount of upside possible with very little downside risk.

In my opinion, this was a good acquisition for Cisco on a number of fronts. Make no mistake–the acquisition was as much about talent as it is about the product itself. During the latest analyst roundtable with CEO Chambers, he specifically pointed out that the company wanted to bring in more high level application talent; Versly is loaded with it. Versly has talent from BEA, Weblogic, Sun and others including one of the original Java team members. No offense to Cisco, but the company isn’t exactly brimming with application talent, so the Versly team will be a welcome addition into Cisco. I certainly don’t think this is the only acquisition Cisco will be making in the application space, but it’s a good start.

I do like this acquisition from a product perspective as well. If you remember the Cisco Live keynote, Chambers promised more focus and listed collaboration as one of its five focus areas. Now, one might look at this and think: Application based collaboration? How does that fit into Cisco? While I agree it’s away from the network, it’s tightly aligned to Cisco’s overall collaboration portfolio. It’s not consumer cameras, set top boxes or something that’s loosely adjacent, it’s collaboration and there is no focus area at Cisco’s that’s bigger than collaboration today. In fact, collaboration has the largest overlay sales force of all product areas at Cisco, so Versly certainly puts another arrow in the collaboration quiver. It also strengthens Cisco Quad and WebEx platforms. I’ve heard some speculate that Cisco might ditch one or both of these products but I think they’re here to stay so why not strengthen them?

Buying Versly is a good direction for Cisco too as it broadens their reach in collaboration. Historically when Cisco has referred to collaboration, they’ve talked about being “people centric,” which is the right approach, but focused it primarily on the communication tools people use. Versly allows workers to collaborate within the Office suite instead of having to flip back and forth between the application, a chat window, over to a document management system, etc (see image below).

Versly is more than just the embedding of presence and e-mail into documents though. It allows workers to share documents, organize them, merge modified documents and archive them. Workers can do this without having to switch out of the document into another program.

In many ways, this is the value proposition that UC should have brought to the table years ago. I had written about this in one of the last BCR magazines, to help understand the long-term value of where UC was going. It’s my belief that users don’t really need more applications. What they need is better integration between applications (see some of my previous blogs on UC middleware) and the ability to access the tools a worker needs from whatever application they are in. This constant switching between chat, email, Word, etc is really a very cumbersome way to work. We’ve become accustomed to it but it’s certainly not ideal.

Now extend this to Quad where Cisco will have the ability to send automatic notifications when a document has been updated, and the user no longer needs to keep checking it or IMing/e-mailing the other workers to find out if the updates have been completed. This should help extract much of the human latency in document-based collaboration, another fundamental tenet of UC &C.

In summary, when you add up the talent Cisco acquired combined with the ability to move up the stack in the UC &C market, and the low risk involved, I think the acquisition was well worth it for Cisco.

On a related note, until the repatriation holiday is approved, small deals like this are what we should expect to see, at least with respect to the acquiring of US based companies. So as Cisco bulks up its application focus, expect to see many small deals instead of one big one.

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Zeus Kerravala

Zeus Kerravala is the founder and principal analyst with ZK Research. Kerravala provides a mix of tactical advice to help his clients in the current business climate and long term strategic advice.
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