Over the weekend the Wall Street Journal broke a story that Polycom was teaming up with Juniper Networks to deliver a different approach to video conferencing (aka teleprence) as compared with Cisco’s highly touted and proprietary high end video conferencing solution dubbed Telepresence.
Juniper and Polycom say the global market for visual communication managed services will grow from $83 million to $940 million between 2008 and 2015, a 162% compounded annual rate. Visual communications products and services is projected to reach $8.6 billion in 2013, they say, a CAGR of 17.8% from 2008.
Here is what the Wall Street Journal wrote:
The latest companies to do so are Polycom, which makes video-conferencing systems, and Juniper Networks, which makes networking gear. The two companies have a common enemy: Cisco Systems, which has long been the market leader in telecommunications gear, and which recently expanded its budding video-conferencing business by buying Polycom’s arch rival, Tandberg.
In a partnership that both companies plan to announce Monday, Polycom and Juniper will make their technologies work together and jointly sell their products. That way, telecommunications providers that normally manage video-conferencing systems for companies will be more likely to buy Juniper gear and recommend Polycom systems, says Bob Hagerty, Polycom’s CEO.
On a technical level, the companies have figured out how to make Polycom’s systems talk with Juniper’s. This allows a network built with Juniper gear to know moments before a video conference using Polycom’s system begins and to allocate the appropriate amount of network space for the session. Today many companies have separate networks for video conferencing and other Internet traffic, says Mr. Hagerty. That can be expensive.
Blogosphere Reactions – Cisco v. Everyone
I was planning on writing up my opinion on this but decided to take the weekend off to hang with the family and watch football. In the meantime other bloggers weighed in ZDNet, ComputerWorld, and GigaOm.
Here is where other bloggers stand on this topic. The Wall Street Journal had the best angle on it from a big picture perspective saying that it’s competitive maneuvering and overall innovation through partnerships.
As a small handful of giants consolidate the tech industry, midsize companies are increasingly looking for partners in order to strengthen their positions relative to their larger rivals.
ComputerWorld went deeper in talking about the implications of video and how that relates to both Polycom and Juniper. Juniper as announced in October 2009 is going open verses Cisco which is going closed.
Strategic Differences: Open or Closed
I wrote about Cisco’s strategy here regarding their growth plans with respect to the Starent buy. Similar here with Cisco buying Tandberg. With these two acquisitions Cisco wants to have a closed and owned mobile core (Starent) and video network (Tandberg).
Others in the industry are taking more of a partnership and open strategy for their growth plans.
Here is Computerworld’s Jim Duffy on the matter.
The alliances are viewed by observers as a response by both Polycom and these vendors to the Cisco/Tandberg marriage and to the expected explosion in demand for video as a key component of unified communications deployments among businesses.
The joint offering will facilitate a “conferencing-aware” network for service providers rather than a video/telepresence overlay to networks not necessarily optimized for video, the companies say. Juniper says it may also offer Polycom-based video/telepresence to enterprises through other channel partners in the future.
The combined system includes Juniper’s Junos Space network application platform and its subscriber policy and identity services, MX Series 3D Universal Edge Routers, announced last fall, and SRX Series Services Gateways; and Polycom’s portfolio of telepresence and visual communication products, including the Distributed Media Application that centralizes call control.
Finally, GigaOm which normally has strong coverage in this area had a unusual obtuse angle on this story. They were saying that Polycom and Juniper were taking a me too stance against Cisco and destined to fail – ouch.
This is clearly a partnership made to ensure that Cisco’s move into the enterprise video conferencing space doesn’t go unchallenged. Gear from this alliance will be designed for providers offering videoconferencing services. Also as part of the partnership, Juniper routers will detect a Polycom video link and allocate the optimal bandwidth for it in real time.
I’m not sure that Juniper and Polycom are an ideal match, mostly because tying the product to the networking gear is a strategy that ultimately follows along with Cisco’s aims. As a smaller rival to Cisco, Juniper can’t win by playing by the same rules as the larger company — it needs to break them.
Although that is an easy thing for GigaOm to assume at first glance, but as you get more informed it is far from the story here. Cisco and Juniper are implementing two different growth strategies Cisco is closed and Juniper is open. Cisco is proprietary and Juniper is open. Yes, Cisco bought Tandberg but the question is “when will Cisco deliver a “real” solution?”. Industry insider all know this will be delayed.
Don’t count out Skype TV either (I wrote about them after CES here) they could easily rollout “real tele-presence”. Skype TV is a threat to Cisco which has no offering for the common web user. Many are saying that Cisco’s Telepresence is pure luxury and a fantasy for mainstream users while Skype has zillions of users and their growth is still up and to the right.
To me Cisco Telepresence is the PictureTel of our generation – it’s super cool and high end, but irrelevant to “real web users”.
Here is Gigaom’s view on Cisco that validates my opinion above:
Cisco is tying its networking expertise to servers, video conferencing gear, consumer equipment and whatever else it thinks it can get away with, because it can guarantee a better quality of service, but also because that gives Cisco the means to keep its margins up. Cisco, may call its servers open, but they are not commoditized the way other servers are because Cisco has integrated this networking component.
Translation: Cisco wants to own end to end and keep it closed to protect margins. That’s a business strategy but it’s based on the fact that Cisco can deliver. The rest of the industry is going open and Cisco is going closed. Either everyone is crazy and Cisco is brilliant. The world wants open.
Networking Growth in Infrastructure 2.0: Be Closed or Be Open That Is The Question
Do we want a marketplace where companies become lords over their customers and heavy hands them into buying decisions? Microsoft dominated this strategy of vendor lock-in during the growth of the computer business and Cisco employed that philosophy in the early days of networking.
Vendor lock-in as we have seen in the past creates a ton of unintended technological issues – slow ability to update drivers, etc; inability to properly react to security issues; slow ability to issue patches/updates etc. Compare that to Google today.
Cisco Is Not The Apple Of Networking
GigaOm was trying to make a case that Cisco is the Apple of Networking. GigaOm wrote:
By adding in the network layer, Cisco hopes to keep its servers from becoming the commodity that Dell’s, HP’s and IBM’s are. The same goes with things like the Flip camera that Cisco acquired when it bought Pure Digital. Sure it wants to boost bandwidth consumption so it can sell more telco gear, but it also wants to build a high-margin ecosystem around the home tied to its gear like Apple.
If Cisco wants to be the Apple of networking (as promoted by GigaOm) Cisco has to deliver value and disrupt the market. I just don’t see Cisco doing that. That is why I think Cisco’s strategy will fail – expensive, closed, and delayed product. It doesn’t add up.
Cisco has a history of bad integration of acquisitions and for sitting on IP while internal teams fight for resources. At the end of the day that isn’t good for innovation and for customer value.
If Cisco wants to be the Apple of networking then Cisco needs to build great products and deliver them fast.
Cisco: I know Apple, I worked with Apple, I have Apple products, You are NO Apple. If anything you should be more like Google.