Microsoft’s CEO Steve Ballmer and Cisco’s CEO John Chambers have jointly underlined their companies’ focus on customers’ demands rather than their competition, during an interview with journalist Charlie Rose.
The representatives of the two behemoths (Cisco has a market capitalization of more than $180 billion while Microsoft surpasses $264.95 billion) have stressed out the common goal to see their customers’ business succeed, through better interoperability between the software and hardware products crafted at Redmond, San Jose respectively. That does not of course exclude heavy competition between the two companies
“We’re two very competitive companies, and there tends to be a lot of media attention paid to how we are competing now or where we might compete head-to-head in the future. When so much of the focus is on who is going to win in markets like unified communications, say, or in Internet-driven television, what is often missing is the amount of work that we’re doing on interoperability- on just how much collaboration there is between the two companies to make our solutions work better together,” said Ballmer.
Chambers responded: “Our overall goal here is to make very clear to our customers that despite our competition in some areas, customers remain our overall focus. We need to articulate more clearly how and where we are working together to minimize interoperability challenges. Our customers are demanding this, and when customers talk, we listen.”
When asked whether the New York meeting between the two top company officials signals something better for the future, both Ballmer and Chambers preferred to speak about the collaboration that has been going on for more than a decade:
Chambers said that: “Cisco and Microsoft have been working together for nearly a decade. Our alliance includes having open discussions about where we can deliver interoperable technology that meets our customer needs. Because both companies have many of the same customers, they are requesting that we work together much more than in the past. Nearly every customer that we serve has a combination of Cisco and Microsoft technologies as critical components of their information infrastructure. Because the intersection of networking and software is so essential to business success today, we recognize how important it is that we work together to make sure that our products interoperate as seamlessly and as smoothly as possible.”
Ballmer added: “We’re in a period where mobile devices, more powerful processing, increasing storage and faster bandwidth are transforming everything from healthcare to entertainment, education, global trade and much more. Our customers want to be able to take advantage of the new business scenarios and new opportunities that these innovations are enabling. Interoperability between our products will reduce complexity for customers and allow them to focus on creating strategic advantage rather than solving the issues that arise when information technology systems don’t work together well. That’s good for them, and ultimately it’s good for us.”
Cisco and Microsoft have been long time pals, strengthening their partnership over the years with contracts that dealt with network security or unified communications. In the spring of 2006, Cisco released Unified CRM Connector 3.0 with support from Microsoft, while two years earlier the two companies have announced their collaboration to ensure compatibility and develop interoperability between their respective security architectures.
These are probably among the most important partnerships but Chambers and Ballmer mentioned others too:
“There are seven initiatives where we are focusing our joint investments, ranging from security - where we have been cooperating on integration of Cisco’s Network Admission Control and Microsoft’s Network Access Protection since 2004 - to network infrastructure optimization, where the two companies are working to develop a joint architectural blueprint that will help customers reduce costs by deploying solutions that combine Microsoft and Cisco products in a consistent way. For our government customers, we recently announced a jointly-developed reference architecture that will help government agencies communicate with each other while better-protecting sensitive information. And we’re working together to make it easier for consumers to move TV and digital video wirelessly in the home,” Ballmer said.
“One of the reasons we are having these discussions is to make clear just how extensive the collaboration between Cisco and Microsoft really is,” added Chambers. In total, Cisco and Microsoft have invested close to US$40 million in our joint work together and have over 140 people around the globe who have been involved in these efforts. Other areas where we have interoperability initiatives include unified communications, systems management, mobile devices, IPTV and more. In every case, the goal is to improve the ability of our products to work together so that customers have more choice when it comes to technology infrastructure and can take better advantage of the new opportunities and experiences that the Internet promises to deliver.”
Unified communications is the soft spot for both Microsoft and Cisco, as they are currently engaged in a heavy competition in this domain, but that does not hinder them from exchanging technologies used by common customers:
According to Chambers, customers’ demands are above the competition with Cisco: “we listen to our customers and recognize that the likelihood is very high that companies will be using technology from both Microsoft and Cisco as they build out their unified communications infrastructure, so interoperability of our solutions will continue to be a top priority.
At the same time, this is absolutely an area where we will also compete. UC is an emerging technology where we are engaged in high-stakes competition and where the two companies have very different approaches—Cisco believes that the best way to address customer needs is at the network level, while Microsoft believes software is the best approach.”
Ballmer stressed out the need for interoperability, which Microsoft took seriously with its recent Linux partnerships signed with the likes of Novell, Linspire or Xandros:
“There’s no doubt that we compete now and will continue to compete in this area. But what makes unified communications interesting is that it’s many things—it’s instant messaging, unified messaging, voice, video, call center applications, integration with desktop and enterprise applications. We know that customers are going to mix and match these things and some of it may come from Microsoft, some may come from Cisco, and some might come from someone else altogether. That means the interoperability points are really quite critical and we want to ensure that Microsoft and Cisco have the best interoperability in the business.”
“To achieve the promise of the Internet era, interoperability is essential. But so is competition. The quest to achieve competitive advantage is what drives innovation. It might seem counterintuitive that two companies can compete and cooperate at the same time, but it is critical to ensure that innovation moves forward without unnecessary delays and disruptions created by technologies that cannot work together. That’s why we’re focused not only on collaborating with each other, but also on consulting with our customers to better understand what they need from us to ensure that we’re meeting their business requirements.
At the same time, we remain competitors in many areas. Our cooperation will never preclude either company from pursuing any competitive opportunities.”