The Case for a Skype-Cisco Partnership

Skype has recently made some impressive partnerships that extend its reach beyond the desktop computer, from making its service available to Verizon customers to integrating with several new HD television sets. As we discuss in a new research note at GigaOM Pro, a logical acquirer of Skype would be an Internet software company, telephony equipment maker or telecom carrier, and recent headlines suggest Cisco might be a natural fit. In August, the telephony company was rumored to have made an offer to acquire Skype, and just this morning, it was announced that Cisco’s Tony Bates is taking over as CEO of Skype.

On the consumer front, Cisco phone systems were among the first approved for Skype Connect, and Cisco’s Linksys brand offers several Skype Certified devices. Meanwhile, Cisco’s other consumer brand, Flip, is reportedly working on a WiFi-enabled camera. A Flip camera integrated with Skype functionality could offer portable videoconferencing capabilities to consumers, similar to those of Apple’s FaceTime.

In the enterprise landscape, Cisco’s telephony solutions embrace videoconferencing more than its competitors (Avaya, Mitel, NEC and Microsoft), and the company offers two desktop phones with built-in cameras. Both Cisco and Skype use proprietary networking, so it’s conceivable they could create enhanced network services for an instant worldwide videoconferencing network, from boardroom to Flip.

Meanwhile, Cisco’s enterprise Unified Presence engine is central to the company’s UC strategy. It supports multiple clients and interoperates with several external systems, including presence/IM solutions from Microsoft, IBM and Google — but not Skype. Cisco could gain a competitive leg up among its enterprise competitors by developing an advanced integration with Skype that delivers rich communications that bridge Cisco’s enterprise world with Skype’s 500-plus million users.

Regarding the traditional carrier aspects of Skype, Cisco has produced and sold more SIP-capable solutions than any other vendor by a wide margin. Skype’s SIP and Cisco are already compatible; joint marketing could lead to rapid adoption, even without proprietary services.

The bottom line is that Skype needs a big brother: a partner that can leverage all of its assets, reduce its costs and carry it technology further into the enterprise. Cisco, meanwhile, needs a way to separate itself from the herd of telephony vendors. Avaya, Microsoft, IBM, and Siemens Enterprise all have deep-pocket desires to unseat Cisco from its leadership position. A partnership with Skype would be a game-changer, and difficult to replicate by other companies.

Read the full research note here.

Image Source: Flickr user David Berkowitz