Cisco aims to blunt the power of Microsoft-Skype merger

Cisco's request to the European Commission seeks the type of action the company fought two years ago

Cisco's plea to make Skype video conferencing protocols public is at least in part a defensive move to protect Cisco's dominance in video as it faces the potentially formidable blending of Skype with Microsoft's unified communication platform, Lync, experts say.

Without access to those protocols Cisco would have difficulty connecting customers using its video gear to those using Skype video services.

BACKGROUND: Microsoft exec: Lync-Skype integration a 'compelling opportunity' 

And if Microsoft adds Skype - along with its 170 million or so users - to Lync, it could wind up with a formidable challenger to Cisco's video conferencing and telepresence equipment, says Andrew Davis, a senior partner at Wainhouse research. "When Microsoft embeds Skype in Lync, an enterprise communications platform, that could have significant enterprise advantage over others," Davis says.

With Skype's huge customer base worked in, Lync could become a powerful business-to-consumer engine, he says, that could be used for sales and technical support.

Businesses considering licensing Lync may be influenced by its ties to Skype, especially since many business users already have the Skype client on their laptops, says Matthias Machowinski, an analyst with Infonetics. "Cisco could view that as a threat in the unified communications space," he says.

For its part, Cisco says it is trying to make video calls as interoperable as phone calls for the good of consumers. "Imagine how difficult it would be if you were limited to calling people who only use the same carrier or if your phone could only call certain brands and not others," says Cisco's Marthin De Beer, senior vice president of the company's Video and Collaboration Group in a blog post announcing company's appeal to the General Court of the European Union.

Cisco is asking the court to amend its approval of Microsoft buying Skype with a provision that would force Microsoft to embrace "greater standards-based interoperability, to avoid any one company from being able to seek to control the future of video communications," De Beer writes.

The plea asks the European Commission to do to Microsoft what it did to Cisco two years ago. At that time, Cisco was buying video conferencing vendor Tandberg, and the commission made Cisco open its TelePresence Interoperability Protocol (TIP) to the public. Cisco argued against opening up its proprietary protocol.

Cisco's big comeback

If Microsoft were forced to make Skype more interoperable, that would be good for video conferencing in general, says Ofer Shapiro, CEO of video conferencing vendor Vidyo. If customers could buy gear knowing it would interoperate with gear made by other vendors, they would have more uses for the technology and more reasons to buy, he says.

Interoperability among most vendors is relatively simple because they rely on two standards, SIP and H.323, says Davis. Skype's protocol is proprietary, so other vendors can't write to it, he says.

If they had access to the protocol used in Skype, interoperability would be relatively straightforward, Shapiro says. "There's no rocket science there," he says.

Because Skype has so many users, it seems like it would make its technology accessible by others, Shapiro says. "When someone is that big, it's reasonable to expect some standard way into their system," he says. "That is something very useful to users."

Microsoft says it hasn't seen the Cisco appeal, but it suspects that it resembles similar arguments that Cisco made during the process to grant Microsoft permission to buy Skype without conditions. "The European Commission conducted a thorough investigation of the acquisition, in which Cisco actively participated, and approved the deal in a 36-page decision without any conditions. We're confident the Commission's decision will stand up on appeal," the company says in a written statement.

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