Thursday, March 15, 2007

Cisco buys WebEx for $3.2 bn

The news on this buy became public today but was very well guarded up until then. Cisco has recently been making a number of smaller purchases at the outer-edges of the mainline business but this is a much more significant move into the applications rather than infrastructure marketplace.

I assume the logic is something like "as the network and networking equipment markets becomes increasingly commoditised and growth is hard to find, what high-value services will themselves be network driven and hence important for Cisco to be directly engaged in?"

Not hard to see that WebEx's leadership in the remote meeting space sits well with that thinking, and it doesn't take a crystal ball to see that the market for video conferencing, where the WebEx brand should have a strong play, is finally starting to become legitimised as $/megabit prices continue to fall.

We do indeed live in interesting times!

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