On the same evening of the record quarterly earnings announcement, preceding a week which included the huge acquisition of DoubleClick (was DoubleClick a Smart Buy?), Google Inc. (NASDAQ: GOOG) coyly announced the acquisition of Marratech's Video conferencing software on the Official Google Blog under the title: Collaborating with Marratech. No press release. No analyst call. No interviews. Just a simple announcement through a blog post by Google's VP of Engineering Douglas Merrill:
"As a company, we thrive on casual interactions and spontaneous collaboration. So we're excited about acquiring Marratech's video conferencing software, which will enable from-the-desktop participation for Googlers in videoconference meetings wherever there's an Internet connection.
We look forward to learning from the extraordinary ingenuity of Marratech's engineers as they focus on desktop conferencing research and development in Sweden, where they will continue to be located."
Why would Google do this? Why buy a company's video conferencing software when you are not going to go all out and talk about it? After all, Google is a key marketing innovator providing an advertising and search platform to tens of thousands of businessess worldwide. Why even put an update on the official blog afterwards that says: "To clarify some confusion, we acquired Marratech's software, not the company itself."
Contrast this particular Google acquisition with Cisco's acquisition of WebEx. Both Marratech and WebEx play in the same web collaboration and web conferencing market place. WebEx has over 2,000 employees; Marratech has 10, albeit a solid engineering team (as per Wikipedia). WebEx has industrial strength proven web conferencing and web collaboration technology used by thousands of corporations; Marratech has good technology that is used by tens of organizations.
For starters, Marratech has good software that include:
* High quality voice for groups with private audio feature
* Interactive group whiteboard including application and document sharing
* Multi party video
and provides support for:
* 256 bit Advanced Encryption Standard (AES) end-to-end encryption
* Support for Windows, Mac OS X and Linux on the client and server side.
* Support for bandwidth saving clusters
* Support for IP Unicast, IP Multicast or both
* Support for H.323 (dial in and out, E.164) and SIP
* H.264 video
Here are my top five reasons on why Google chose to acquire Marratech's video conferencing software and did not make a huge splash:
1. Google quite possibly entertained acquiring WebEx Communications Inc. (NASDAQ: WEBX), but did not go over the top as it did with DoubleClick, and essentially gave way to Cisco Systems, Inc. (NASDAQ: CSCO). WebEx would have been a smart play for Google in the enterprise market.
2. Google then decided to simply acquire video conferencing technology that it can essentially mold and embed it deeply within the Enterprise applications and Desktop. Google thus was looking at acquiring technology fast and for a small price.
3. Google will likely integrate Marratech into Google Talk, Chat, Google Apps, Google Desktop, and other Google collaboration products in the future. Marratech may even provide a superior audio solution than what Google has today. Google is only buying the software; it is not clear on whether Google will create a new team of engineers to work on the new solution, or outsource the development to Marratech.
4. Google may provide "Live Video Conferencing" powered by Marratech as an add-on to YouTube customers. This could be huge. YouTube has been a runaway hit with on-demand Video; combine this with live Video conferencing, and suddenly, Google can be powering the world's Video conferencing solution through the Google network.
5. Google will possibly use Marratech as a launchpad in Sweden and create a larger technology presence in the future.
Showing posts with label web collaboration. Show all posts
Showing posts with label web collaboration. Show all posts
Monday, April 23, 2007
Thursday, March 15, 2007
Cisco Betting BIG with Purchase of WebEx
Cisco Systems, Inc. (NASDAQ: CSCO) today announced the acquisition of WebEx Communications, Inc. (NASDAQ: WEBX), the leader in web conferencing, for $3.2 billion - or 7 times WebEx projected revenue of $457 million in 2007. Cisco is betting big with this acquisition on the potential upside in web and video conferencing revenue in the unified communications market space. Cisco is also countering Microsoft's advances in the unified communications market.
Cisco is one of the top 20 innovators of The Innovation Index.
WebEx Revenue Machine
Although the WebEx year-over-year revenue growth is hovering around 20% in the last couple of years, the total revenue growth of WebEx has been solid over the last five plus years. Cisco must have looked at the total revenue growth, and the available market in the next five to ten years in providing such a generous valuation to WebEx. Whereas the total revenue growth of WebEx looked good, the net income was another story:
The WebEx Net Income has been steady around $50 million for the past three years. Of course, Cisco must have considered the lack of net income growth owing to WebEx investing into the overall revenue growth.
Cisco Telepresence and WebEx Collaboration
"We have a lot of strength in voice and video, which we think can help to improve their user experience," Cisco Chief Development Officer Charlie Giancarlo said in an interview today.
Cisco introduced perhaps its biggest innovation of 2006, the Cisco Telepresence, a new technology solution that provides brand new in-person experiences between people, places and events whether they are across town or across the world. However, not all companies can afford Cisco's Telepresence; in particular, the SMBs, and departments of larger companies. For these companies, the WebEx solution of web conferencing and collaboration will be more economical and will see greater adoption. There was also a deeper problem and product gap with Cisco Telepresence: Context and Collaboration. The large company customers want to do more than simply hooking up the Cisco Telepresence gear and participating in full motion video conference - these customers want to collaborate. This was perhaps the biggest weakness of Telepresence. Now, Cisco will be able to provide a comprehensive solution to its large customer base with WebEx Collaboration built into the Telepresence. The WebEx Collaboration suite will provide context to Cisco Telepresence solution. In turn, Cisco Telepresence will see far reaching adoption in the larger corporate market, and the resulting upside in revenue.
Giancarlo had said in December, 2006 that Telepresence may be the quickest Cisco product to reach $1 billion in annual sales. Now, Giancarlo is about half way there with the acquisition of WebEx, and if Cisco is able to fully exploit the WebEx Collaboration solution, Giancarlo will reach there sooner.
WebEx Telesales and Web Sales
What the various press releases and announcements have not talked about is the strength of WebEx Telesales and Web Sales machine that Cisco is acquiring. Led by David Berman, the worldwide VP of Sales and Service, the WebEx Telesales and Web Sales team is a selling machine. Cisco can definitely benefit from the sales process and the sales factory that David Berman and his team have developed at WebEx. If Cisco wants to win in the SMB market with the SaaS (Software as a Service model), WebEx will be able to provide Cisco the necessary framework and the model. And if Cisco is able to replicate this and grow this model further, Cisco can reap a potential windfall which will be greater than the stated acquisition cost of $3.2 billion.
Bottomline
Subrah Iyar and Min Zhu founded WebEx in the mid nineties. Their vision was to grow WebEx into a billion dollar revenue enterprise - although WebEx market cap grew to over one billion dollars, the revenue were about half way to the billion mark. Could Iyar, the current CEO, have taken WebEx to billion dollars in revenue? Possibly. Why would Iyar sell WebEx now after going through the pain of growing the company to $100 million, and then to almost $500 million? Perhaps ten years plus in growing a company becomes tiring, and the challenge of growing a business versus creating new products becomes monotonous. I am sure we have not seen the last of these entrepreneurs though. The WebEx investors, stock holders and employees are rejoicing today on the big acquisition and the upside on their stock valuations.
References:
Bloomberg
Cisco is one of the top 20 innovators of The Innovation Index.
WebEx Revenue Machine
Although the WebEx year-over-year revenue growth is hovering around 20% in the last couple of years, the total revenue growth of WebEx has been solid over the last five plus years. Cisco must have looked at the total revenue growth, and the available market in the next five to ten years in providing such a generous valuation to WebEx. Whereas the total revenue growth of WebEx looked good, the net income was another story:
The WebEx Net Income has been steady around $50 million for the past three years. Of course, Cisco must have considered the lack of net income growth owing to WebEx investing into the overall revenue growth.
Cisco Telepresence and WebEx Collaboration
"We have a lot of strength in voice and video, which we think can help to improve their user experience," Cisco Chief Development Officer Charlie Giancarlo said in an interview today.
Cisco introduced perhaps its biggest innovation of 2006, the Cisco Telepresence, a new technology solution that provides brand new in-person experiences between people, places and events whether they are across town or across the world. However, not all companies can afford Cisco's Telepresence; in particular, the SMBs, and departments of larger companies. For these companies, the WebEx solution of web conferencing and collaboration will be more economical and will see greater adoption. There was also a deeper problem and product gap with Cisco Telepresence: Context and Collaboration. The large company customers want to do more than simply hooking up the Cisco Telepresence gear and participating in full motion video conference - these customers want to collaborate. This was perhaps the biggest weakness of Telepresence. Now, Cisco will be able to provide a comprehensive solution to its large customer base with WebEx Collaboration built into the Telepresence. The WebEx Collaboration suite will provide context to Cisco Telepresence solution. In turn, Cisco Telepresence will see far reaching adoption in the larger corporate market, and the resulting upside in revenue.
Giancarlo had said in December, 2006 that Telepresence may be the quickest Cisco product to reach $1 billion in annual sales. Now, Giancarlo is about half way there with the acquisition of WebEx, and if Cisco is able to fully exploit the WebEx Collaboration solution, Giancarlo will reach there sooner.
WebEx Telesales and Web Sales
What the various press releases and announcements have not talked about is the strength of WebEx Telesales and Web Sales machine that Cisco is acquiring. Led by David Berman, the worldwide VP of Sales and Service, the WebEx Telesales and Web Sales team is a selling machine. Cisco can definitely benefit from the sales process and the sales factory that David Berman and his team have developed at WebEx. If Cisco wants to win in the SMB market with the SaaS (Software as a Service model), WebEx will be able to provide Cisco the necessary framework and the model. And if Cisco is able to replicate this and grow this model further, Cisco can reap a potential windfall which will be greater than the stated acquisition cost of $3.2 billion.
Bottomline
Subrah Iyar and Min Zhu founded WebEx in the mid nineties. Their vision was to grow WebEx into a billion dollar revenue enterprise - although WebEx market cap grew to over one billion dollars, the revenue were about half way to the billion mark. Could Iyar, the current CEO, have taken WebEx to billion dollars in revenue? Possibly. Why would Iyar sell WebEx now after going through the pain of growing the company to $100 million, and then to almost $500 million? Perhaps ten years plus in growing a company becomes tiring, and the challenge of growing a business versus creating new products becomes monotonous. I am sure we have not seen the last of these entrepreneurs though. The WebEx investors, stock holders and employees are rejoicing today on the big acquisition and the upside on their stock valuations.
References:
Bloomberg
Thursday, September 21, 2006
From "Leading through Creativity" to creating a New Blog....
Dear "Leading Through Creativity" Collaborators:
I am Sanjay Dalal, and I had the excellent opportunity to take the online course on "Leading through Creativity" at eCornell with you all. I was quite motivated by the online class environment, the course content, our instructor, the engaging and lively discussion, and collaborative exchange of ideas with all of you. Thank you Ms. Dolan for leading us through this course.
This motivation literally made me start a new blog titled: Creativity and Innovation in Business.
Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world
I am Sanjay Dalal, and I had the excellent opportunity to take the online course on "Leading through Creativity" at eCornell with you all. I was quite motivated by the online class environment, the course content, our instructor, the engaging and lively discussion, and collaborative exchange of ideas with all of you. Thank you Ms. Dolan for leading us through this course.
This motivation literally made me start a new blog titled: Creativity and Innovation in Business.
Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world
The Blog Address is: http://creativityandinnovation.blogspot.com/
This email to all of you is my first Blog post on this Blog.
The Blog, as the title suggests, will be focused primarily on the advances of Creativity and Innovation in your Business, any Business. Much about what we learned in the course, however in practice. There were a lot of creative and innovative ideas and experiences suggested through out the two week online-course. I am hoping the Blog will serve as a place to share and experience such creative and innovative thought perpetually.
I am planning to share my experiences, ideas and thoughts in this blog and would like you all to participate and collaborate also... you are my first "online" virtual collaborators that I have invited to this Blog. I am quite excited about this. Please contribute freely and frequently your creative experiences and ideas from your world of business. Please also invite your friends, peers and colleagues to this Blog.
I look forward to "Creative" and "Collaborative" Blogging on the world of Creativity and Innovation in your Business.
Sincere regards,
Sanjay Dalal
This email to all of you is my first Blog post on this Blog.
The Blog, as the title suggests, will be focused primarily on the advances of Creativity and Innovation in your Business, any Business. Much about what we learned in the course, however in practice. There were a lot of creative and innovative ideas and experiences suggested through out the two week online-course. I am hoping the Blog will serve as a place to share and experience such creative and innovative thought perpetually.
I am planning to share my experiences, ideas and thoughts in this blog and would like you all to participate and collaborate also... you are my first "online" virtual collaborators that I have invited to this Blog. I am quite excited about this. Please contribute freely and frequently your creative experiences and ideas from your world of business. Please also invite your friends, peers and colleagues to this Blog.
I look forward to "Creative" and "Collaborative" Blogging on the world of Creativity and Innovation in your Business.
Sincere regards,
Sanjay Dalal
Subscribe to:
Posts (Atom)