Cisco CEO: 'Video is the killer app'

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Cisco guns for Microsoft in collaboration market

As Cisco Systems adds more functionality to its online WebEx conferencing service, it's ratcheting up the competitive pressure against partner and rival, Microsoft.
Cisco held a press event on Tuesday to discuss how it plans to add more to its WebEx service. As the company includes more software into the conferencing service, it is competing more intensively and directly with one of its major partners, Microsoft.
"As Cisco expands this business, the co-opetition between Cisco and Microsoft will only increase," said Zeus Kerravala, an analyst with Yankee Group. "Microsoft is strong on the desktop and Cisco is taking a lot of these software functions into the cloud.
WebEx is a leading Web conferencing service that Cisco bought in 2007. This was Cisco's first foray into offering a service. And the product has been very successful. As a result, the company has used the service as the foundation for its emerging big business collaboration tools. Cisco has also recently bought two other companies that it plans to feed into the service.
Primarily, Cisco is adding more unified communications functionality to the service it calls WebEx Connect. This is an extension of the Web-based video conferencing service that also includes instant messaging and presence. Using technology from Jabber Cisco will add even more presence functionality. And through the acquisition of PostPath, it will add e-mail into the mix.
Cisco already competes with Microsoft in the unified communications market. In fact, the two companies are strong rivals here. But Microsoft has had an advantage over Cisco with its strong presence on the desktop.
Now Cisco is taking these services into the "cloud", where the company can leverage its existing expertise with WebEx to provide a virtual solution for its corporate customers.
But Cisco isn't just stopping with unified communications. The company is also in the early stages of offering document, spread sheet, and presentation creation and sharing as part of WebEx. These are very clearly areas where Microsoft has a strong foothold and a very strong business. The company's Office suite, which includes Word, Excel, and PowerPoint, is part of its business productivity portfolio. And Microsoft makes a lot of money from this software, about US$60 billion of its sales during last fiscal year came from these products.
But Alex Hadden-Boyd, director of marketing for the collaboration software group at Cisco says that Cisco has no intention of going after Microsoft's core Office business. Instead, she said that Cisco is more interested in providing collaboration tools online that groups can use to create and share documents, spreadsheets, and presentations.
"If you look at WebEx Connect today, we already have the beginnings of this," she said. "We have team spaces with shared files and wikis. So we are already well on our way down that road. But we are not focusing on productivity applications or individuals such as re-creating Excel or PowerPoint."
"We are using our existing resources and we have no intention of creating the next Word application for individuals," she added. "We simply are trying to make it easier for work groups to share documents in a team space."
Yankee Group's Kerravala agrees that it doesn't make much sense for Cisco to try to compete against Microsoft's Office products at the desktop level.
"Cisco is not going to take on Microsoft head-to-head on the desktop," he said. "And the reason is simple. They know they'd lose. But Cisco has invested in the cloud and service technology that allows them to approach it differently."
That said, Hadden-Boyd said she does see competition increasing between Cisco and Microsoft in the overall collaboration market. She said the two companies will continue to compete aggressively in collaboration software such as IM and conferencing. Microsoft already offers IM and conferencing and is working on Web-enabling its Office applications.
But Cisco could some day compete head-to-head with Microsoft's email Exchange platform with its new e-mail service from PostPath.
"We could see that as a possibility," Hadden-Boyd said. "We could see businesses using PostPath for e-mail instead of Exchange."
As for the online collaboration market, Cisco and Microsoft aren't the only ones developing solutions. Google also offers document creation and sharing online. But so far those services haven't gotten much appeal outside of the individual consumer market. And it has yet to take shape in the enterprise market.
"Google is the wild card here," Kerravala said. "People are expecting Google to get into the enterprise market. And I see it possibly taking off with a younger kind of worker. But Google has never monetized anything outside its advertising revenue. So it will be interesting to see."
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Recession dividing LTE and WiMax

The global economic situation may widen the rift between LTE (long term evolution) and mobile WiMax adoption between mature and emerging markets, according to Ovum.
The analyst firm said in its latest report, the recession is expected to slow revenue growth for operators in the short term, although the volume of connections will keep rising. This will lead to lower ARPU (average revenue per user), in turn driving the uptake of LTE in mature markets, as telcos look to upgrade to next-generation networks to capture data revenues, said Ovum.
The number of connections are expected to grow 59 percent from 2008 to 2014, while revenues grow by 33 percent, according to the report.
Ovum adds that the mobile WiMax industry would get increasingly marginalized by 2014 as a result of LTE's growth--mobile WiMax is expected to hit 55 million connections while LTE will grow to nearly twice that at 109 million worldwide, by then. Growing operator and ecosystem support for LTE would continue to edge out mobile WiMax, it added.
LTE and WiMax are seen by some as competing technologies--LTE is an upgrade of existing 3G cellular-based broadband, and WiMax a wireless broadband standard meant to extend connectivity to regions without sufficient cable infrastructure.
As a result, WiMax has been said to be more appropriate to provide last-mile access for emerging markets, and LTE for mature markets with an existing cellular base.
Some have also said WiMax may be the broadband technology of choice for emerging regions because it is ready for deployment to satisfy their latent hunger for connectivity, while LTE has yet to be finalized.
Amid the growth of data revenues, however, voice will still be mobile's "killer app", noted Ovum. With operator service venues expected to hit US$1.1 billion in 2014, voice will account for 69 percent of revenues globally, and no less than 60 percent in any region.
"Operators must not ignore this fact in the race for data revenues," it said.
Due to the recession, Ovum has also revised its previous estimates on operator service revenues. It had earlier predicted global mobile services revenues would break the US$1 trillion mark in 2010, but moved this target a year to 2011, due to the current economic situation.
"The greatest impact of recessionary forces is seen in the short term," said the report.
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Green Dam delay: How long will it last?

The Chinese government's decision to delay its Green Dam-Youth Escort directive would not only give authorities time to resolve gray issues, but also allow the industry to make the necessary provisions, experts say.
The Chinese government announced earlier this month it would be mandatory for PC manufacturers to install the Green Dam-Youth Escort content filtering software on all new systems sold in China by Jul. 1. On Tuesday, however, it postponed the decision indefinitely.
According to Chinese news agency Xinhua, China's Ministry of Industry and Information Technology (MIIT) delayed the initiative due to feedback from PC makers, which said they required more time to carry out the installation.
Industry observers ZDNet Asia spoke to painted a picture of confusion among PC manufacturers.
Bryan Ma, IDC's director of personal systems research in the Asia-Pacific region, told ZDNet Asia in a phone interview he was not surprised at the latest development. "At end of the day, the challenge was that the industry really didn't have all the information on hand at such short notice--whether it was [with regard to] how it was distributed, what was required or what wasn't," Ma explained.
Rebecca MacKinnon, assistant professor at the University of Hong Kong's Journalism and Media Studies Centre and co-founder of citizen media community GlobalVoicesOnline.org, noted that there have been various interpretations of the directive. The regulations "literally indicated that it needed to be on the computer", but it was unclear if the software had to be activated and running, or installed on the hard drive for users to activate, or simply be made available on a CD-ROM, she explained in a phone interview.
"It's quite possible the order could be modified, in addition to being postponed," MacKinnon said of the delay, adding there was also a chance the directive would never be enforced. "All possibilities exist at this point in time."
Japanese electronics giant Sony is said to have begun selling PCs accompanied by the Green Dam software. A Hangzhou-based user by the name of "Mingcheng" posted an image of a Sony disclaimer notice, which he said was included in the packaging of a new Sony Vaio machine. Among other statements printed in the notice, Sony had stated it would not be responsible for the legality, authenticity and security of the censorware, with regard to the content, effectiveness and performance of Green Dam.
At the time of writing, Sony was unable to confirm the content highlighted in the document.
According to Reuters, Acer also admitted it would comply with the new ruling.
Speaking from London, MacKinnon said vendors that complied too quickly "look bad" as they may appear to be "over-eager to please the Chinese government at the expense of customers' interest". Referring to security concerns over the software, she noted that vendors that had, on the other hand, held back from taking action may indirectly be deemed to protect consumer interest.
Dell Computer, which earlier said it was reviewing the initiative and working with the industry to understand Green Dam's application, issued a new statement on Wednesday.
"We respect the Chinese government's stated goal of protecting children by filtering access to pornography through the Internet," a spokesperson said in an e-mail. "We'll continue to advise customers worldwide about widely available Web-filtering software that has been thoroughly tested, and [that] we know perform well on Dell computers."
Compromises by China puts pressure on PC makers
Raphael Phang, vice president of IDC Government Insights Asia-Pacific, said in a phone interview that the Chinese government's decision to allow PC makers to offer Green Dam on a CD-ROM, as well as to postpone its implementation, can be seen as measures to accommodate the industry.
"Given that China has already put forward such compromises, the question [now] is, what compromise will the PC makers make?" Phang noted.
What the Chinese government is looking to do, he said, is filter Internet content "from every point" possible. "There may be an increased concern on the part of the government that the most common means to access the Internet--PCs--has not been sufficiently addressed," he said.
"This realization may have exacerbated the government's decision to push ahead with its implementation of the filter as a blunt instrument," Phang explained. "It should be noted that China's online population has been estimated at some 300 million, and with a population of over 1 billion, this represents just the tip of the proverbial iceberg."
The lobbying by concerned parties such as the U.S. and U.K. chambers of commerce, as well as trade associations, may have been a factor in the postponement of the mandate. However, this was likely not the only factor, Phang said.
"[Discounting] the lobby, [the Chinese authorities] will have their own set of criteria on what they want to succeed," he said, adding that the Chinese government would likely be concerned the tool they put in place works and meets their objectives.
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