This week I spent 2 days attending Cisco’s Collaboration Analyst Summit at its headquarters in San Jose. With more than 50 industry analysts in attendance, this important meeting was an opportunity for Cisco to set its direction for the business that includes the company’s broad portfolio of voice, video, messaging and contact center with both on-prem and cloud variants of each.
Collaboration Chief Amy Chang led the proceedings, but was generous with the stage as she allowed her business unit leads, engineers and product managers have the opportunity to communicate the business strategy, new product developments and competitive advantages through a series of sessions that focused into the various components that make up the collaboration business. I found Amy’s focus on unifying the platform and driving better experience for users refreshing, but I also met the vision with a careful ear as I wanted to hear not just a big splash, but a real path to accomplishing these ambitions.
For me, I was looking for how the company will leverage its broad portfolio to differentiate itself and to better understand the business unit’s prospects for significant growth in the increasingly competitive collaboration space. Over the course of the two day’s we were presented with an abundance of information on the business units efforts in each area and collectively. From that, I identified 4 areas that Cisco is targeting to enable the collaboration business to drive growth, scale and differentiation from its competition.
A Note on the Competition
Before digging into Cisco’s 4 areas of differentiation, it’s important to talk a bit about the landscape and competition for collaboration. The collaboration space is highly fragmented with many point solutions for unified messaging, voice and video. The most complete competitive solution is Microsoft’s Teams solution, however even Teams has a relatively small device portfolio for video and a limited contact center offering.
Point solutions have quickly become the big solution for Cisco with specialty providers such as 8×8 for cloud collaboration, Zoom Video for meetings and Slack for unified messaging being some of the leading platforms. Contact Center has seen the rise of companies like Five9, which interestingly is now led by former Cisco Collaboration Chief, Rowan Trawllope.
Cisco has a strong argument that it is the most complete collaboration solution from a single vendor in the market place. This has come as a product of acquisition and product convergence. The next phase is integration and experience enrichment, which Cisco discussed at length at the analyst Summit.
Cisco Collaboration Targets Differentiation on 4 Fronts
Platform: One Webex was the slogan that drove the meeting. This isn’t something that has been touted in the past because Webex Teams, despite some unified logos, was really more a collection of solutions in the past. Meetings, Voice, Messaging were different apps that shared certain functionality but weren’t by any means a platform. Coming out of the meeting, I had a clear sense that a single unified platform that would resemble other productivity or CRM type experiences was the ambition here. If a user of voice wanted to add meetings, it won’t be another app, but it will be part of the One Webex experience. This is promising, and I will be anxious to play with the platform and receive enterprise feedback from users on the improvement in usability and adoption from a single platform.
Cognitive/AI: AI and Cognitive Collaboration (CC) are both fronts that Cisco have the opportunity to compete on. While both AI and CC are based on AI/ML, I have differentiated them based upon one being more what is happening behind the scenes of the meeting (AI) and the other being important to the contribution to better user engagement and information during meetings (CC) . Cisco is using its AI capabilities to improve its codecs, noise cancellation, analytics, transcription and security to name a few. Most point solutions are doing this to some degree, but Cisco has a complete approach to maximizing AI/ML to enhance every part of the call. Cognitive Collaboration is a potential powerhouse as the social graph comprised of structured and unstructured data can enable users to gain meaningful insights to those in the meeting. The ability to quickly gain deeper insights from a third party data source right as someone enters the meeting will be valuable as busy knowledge workers have more meetings and less time to prepare.
Note: I also found the Voicea capabilities for meeting interaction with transcription extremely powerful. More integration to call out an action item in real time and create a Trello card or a Salesforce action item was very interesting and compelling to me. A solid use of NLP, ML and Automation to create more instantaneous value from meetings.
Analytics: The Company was eager to share a broader set of analytics for business leaders. Investments in technology are increasingly being scrutinized for value. Collaboration has long had the story that it saves time and money on things such as travel and unnecessary meetings. However, deeper analytics and dashboards enhanced by machine learning are invaluable for identifying the ROI on collaboration investments. The value of analytics also builds on the One Webex concept, as more transparency and analytic value will be extracted from data across the platform than a series of data extracted from each point solution.
Security: Security is a challenge for every company including Cisco, but I also believe Cisco benefits from a strong reputation in the security space. Zoom has had a few security issues that have been pointed to in the past, including its Zero Day, however, as time has gone on the company has seemingly been shoring up its security efforts. With Cisco benefitting from its deep security capabilities beyond collaboration, but across the Cisco portfolio, the company has a greater opportunity to deliver a hardened environment and zero trust to the enterprise. I have long felt Cisco needs to lean into this difference, as security has long been a sweet spot for the company.
Overall Impressions of Cisco Collaboration’s Strategy and Analyst Summit
Cisco presented a comprehensive offering and showed strong signs of maturity in the portfolio. One Webex is more than a motto, but it is an identity that Cisco needs to be steadfast to deliver to the market. Users don’t want several fragmented experiences, and the ability for Cisco to deliver a complete collaboration suite via a single platform is truly a differentiator that only Microsoft has the potential to compete with in the near future.
I believe Amy Chang’s rich experience in the tech community has become more visible in the direction of Cisco’s Collaboration business. She has appointed and entrusted leadership across the portfolio not just based on experience, but based upon forward thinking and a desire for One Webex to be a modernized platform that is attractive to not only Cisco’s legacy enterprise customers, but to smaller businesses building their enterprise communication in the cloud.
Over the next 6-8 quarters, it will be important that the business unit doesn’t only show growth, but sees strong adoption of the One Webex Platform. It will also be important to watch attachment rates of adjacent products as many users may only be a customer for Meetings or Voice today, but could potentially add several additional services over time.
Additionally, Cisco being more traditionally hardware-centric, need to take the opportunity for Collaboration to springboard its prowess as a software platform company. The recurring revenue from the business will add substantially to the bottom line and drive increased margins, which will contribute consistently to bottom line performance.
Futurum Research provides industry research and analysis. These columns are for educational purposes only and should not be considered in any way investment advice.
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