Steve Balmer and John Chambers, CEOs of software giant Microsoft and networking equipment maker Cisco respectively, pledged yesterday that the two companies’ software and networking products will interoperate, even where they have competing offerings.
Although the companies are moving ever deeper into competition with one another – Microsoft has its own unified communications strategy, while Cisco is branching out into applications – they still need to work together if they are to serve the customers, said Chambers.
“Our overall goal here is to make very clear to our customers that despite our competition in some areas, customers remain our overall focus,” he said in Q&A session in New York yesterday. “We need to articulate more clearly how and where we are working together to minimise interoperability challenges.”
The companies have together invested close to $40 million in joint projects, he added. “Areas where we have interoperability initiatives include unified communications, systems management, mobile devices, IPTV and more.”
Microsoft’s Ballmer said the new “competitive and collaborative” relationship between the two companies, once seen as fiercely opposing forces in the technology sector, is a necessity of doing business in the Internet age.
“To achieve the promise of the Internet era, interoperability is essential,” he said. “But so is competition. It might seem counterintuitive that two companies can compete and cooperate at the same time, but it is critical that innovation moves forwards without unnecessary delays and disruptions created by technologies that cannot work together.”
That does not mean either party is losing its competitive zeal, however. “Our cooperation will never preclude either company from pursuing competitive opportunities,” said Ballmer.
Jan Dawson, analyst for Ovum, says that despite appearances Microsoft and Cisco are as combative as ever.
"A war between Microsoft and Cisco is breaking out, especially in the Unified Communications market," says Dawson. "Cisco’s purchase of WebEx was the latest major salvo in this war, but the two companies are increasingly shaping up as the two major competitive forces in this market."
This interoperability agreement, argues Dawson, should not be mistaken for a peace treaty. "The behavior of Cisco’s and Microsoft’s salespeople on the front lines and their engineers in the backrooms at both companies will be what really drives market perception of their ability to work together."
And although a commitment to interoperability is laudable, says Dawson, both companies "will continue to do their best to create a world where the other isn’t needed.”
Further reading
Information Age company analysis - Cisco gears up for platform fight
Last Word - Outmoded Microsoft
