Instead of setting up the scene, I will cut right to the chase: During a Q&A with press at Cisco's (NASDAQ:CSCO) Partner Summit in Las Vegas on April 4, Cisco CEO John Chambers described the showdown with Microsoft (NASDAQ:MSFT) in the unified communications space. He said:
Microsoft has given us a three-year lead. And we’ve never lost a game when we’ve had a three-year lead… It’s a battle we fully intend to win.
Chambers certainly sounds confident. But let’s be careful here, John: Novell (NASDAQ:NOVL) had 65 percent server market share before Microsoft came along and destroyed Novell's NetWare business.
Still, Chambers believes Cisco has several advantages in the unified communications market. He stated that unified communications will be “enabled more and more through networking and that will drive the direction of the market.” In order to maintain a leg up on rivals, he promised that Cisco would deliver an “open architecture, simplicity and interoperability.” Not exactly three of Microsoft's strong suits, I would argue.
Chambers noted that Cisco is making early inroads with SAP, Salesforce.com, Google and other Web 2.0 companies. He even hinted about mash-ups with a Google (NASDAQ:GOOG) ... (pause for impact...) and Apple (NASDAQ:AAPL). Yes, he actually mentioned Apple despite the recently settled lawsuit involving the iPhone name. More on Apple in a moment.
Another key takeaway: Chambers believes unified communications and Web 2.0 are the biggest market transitions since the Internet took center stage a decade ago. He fully expects Cisco to succeed in those markets because of Cisco’s “internal innovations, acquisitions and partners.” Chambers noted that Cisco is now No. 1 in roughly 12 major product areas–from VoIP phones to wireless to switching and so forth.
Chambers also conceded that Cisco made mistakes in the recent past. Had the company executed more efficiently in the early voice-over-IP market, Cisco would have even greater market share today, he conceded.
We thought a phone switch out was a PC switch out but it’s a process change … we underestimated this.
Looking ahead, Chambers does not believe it will be an entirely mobile market. Users will have and wireless, and they don’t want to worry about configuring which system they’re on, he says.
Now, onto my favorite subject: Apple. Chambers hinted that Cisco is making progress with Apple in terms of unified communications running on Apple iPhones. He downplayed the recent lawsuit over the iPhone name, which has been settled. The lawsuit, he noted, “was a small bump. It wasn’t a major issue for either one of us.”
While he didn’t guarantee an Apple-Cisco relationship for unified communications, he said “I’d be surprised if we don’t make progress on several fronts." However, he thinks the ultimate decision for interoperability rests with Apple. “We’re a believer in interoperability.”
Overall, Chambers was quite bullish during the session. But was he over confident? “We know you can fall from grace in two years but it may take five years to play out.”