Cisco Is Jabbering Its Way Into Office Cubicles

September 19, 2008, 2:01 pm — Updated: 3:20 pm -->
Cisco Is Jabbering Its Way Into Office Cubicles
By Ashlee Vance
The switching gear made by Cisco Systems tends to lurk in the deepest, darkest parts of data centers. It pushes information between servers and storage systems and funnels data out to the myriad networks that combine to form the Internet. When everything functions well, Cisco’s hardware lives in relative anonymity.
Over the last couple of years, however, Cisco has worked to get itself more directly onto workers’ desks. The company sells voice-over-Internet-protocol phones along with video conferencing systems. It also acquired WebEx for $3.2 billion in March 2007, adding an online meeting and collaboration software element to its arsenal, and purchased the e-mail and calendar software provider PostPath last month for $215 million.
On Friday, Cisco rounded out that online play with the acquisition of Jabber, a privately held messaging specialist.
Denver-based Jabber bills itself as a seller of “commercial messaging solutions.” Putting the jargon aside, Jabber offers instant-messaging software that has a more corporate shine than applications like AOL Instant Messenger or Yahoo Messenger. Jabber’s software provides additional security and message archiving functions that make it possible for financial, government and other large customers that must adhere to regulatory measures to use instant messaging within their organizations.
Cisco will use the Jabber technology to complement the WebEx platform, said Charles Carmel, vice president of corporate development for Cisco.
With its increasingly comprehensive array of collaboration products, Cisco now competes head-to-head against the likes of Microsoft, I.B.M., Yahoo and Google, which are all courting the same market.
Given the amount of business Cisco does with these companies, it maintains a certain level of decorum when characterizing its broader software plans.
“Both Microsoft and I.B.M. are important partners to Cisco in many parts of our business,” Mr. Carmel said. “I think the collaboration part is an area where there is overlap, and our objective is to make that as seamless as possible.”
More broadly, Cisco’s maneuvering represents an attempt to capitalize on the shift to “cloud computing” services where users tap into software running in a data center rather than bothering with applications locked to individual computers. Cisco could benefit from this shift in at least two ways.
Software like WebEx can drive more interest in Internet-based software, which in turn produces more network traffic and demand for Cisco’s switches. “That is always a good thing,” Mr. Carmel said.
In addition, Cisco can crack into new software markets with a collection of fresh products and not worry about supporting older communications systems and revenue streams, as is the case for companies such as Microsoft and I.B.M.
Jabber’s current instant-messaging software can work with Google Talk, AIM, Microsoft Windows Live Messenger and Yahoo Messenger. This gives Cisco something it’s billing as an “open” play for corporate messaging.
Cisco declined to discuss financial terms for the acquisition but said that it was expected to close in the first half of the company’s fiscal 2009. Most of the 54 Jabber employees will join Cisco’s Collaboration Software Group, Mr. Carmel said.