PostPath acquisition is a smart move for Cisco

* Cisco buys PostPath for $125 million

Cisco last week announced that it had purchased PostPath for $215 million. This follows the acquisition of IronPort for $830 million and WebEx for $3.2 billion, among other Cisco acquisitions, including Linksys, Pure Networks, Five Across and many others - a total of 56 since 2001.

Acquiring PostPath was a smart move for Cisco. PostPath offers a very good alternative to Exchange that does not require a plug-in for use with Microsoft Outlook, the dominant desktop e-mail client. This allows organizations to swap out back-end servers and retain the desktop look-and-feel to which users are accustomed – our research has shown that this is a very important consideration for many decision makers in evaluating Exchange alternatives and a make-or-break deal for many of them.

PostPath will be integrated into Cisco’s WebEx Connect platform, an integrated set of unified communications and collaboration services offered via a software-as-a-service (SaaS) delivery model. This will position the PostPath offering directly against hosted and managed Exchange offerings, as well as hosted and on-premise offerings using other technologies.

No mention has been made of offering PostPath as a stand-alone competitor to Exchange for on-premise deployments and I doubt that Cisco would use PostPath in this way. The market for on-premise mail servers is dominated by Exchange and Notes/Domino and, to a lesser extent by GroupWise and many other systems. Going head-to-head with these well-entrenched competitors would be difficult and run counter to the reasons for which PostPath was acquired.

The market for SaaS-based messaging, unified communication and collaboration tools is becoming increasingly interesting and competitive, particularly for prospective customers at the lower end of the market – up to about 250 seats. There are a growing number of very good solutions available, making this an interesting market to watch.

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