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Cisco Confronts Microsoft Wi 172534
- 1. Research Publication Date: 11 November 2009 ID Number: G00172534 Cisco Confronts Microsoft With Cloud E-Mail Service Matthew W. Cain The battle for the collaboration market moves to a new stage with the release of Cisco's cloud-based WebEx Mail Service. Cisco enters the field at a time of great flux, characterized by rapid price erosion. © 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The conclusions, projections and recommendations represent Gartner's initial analysis. As a result, our positions are subject to refinements or major changes as Gartner analysts gather more information and perform further analysis. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartner's research may discuss legal issues related to the information technology business, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice.
- 2. NEWS ANALYSIS Event On 9 November 2009, Cisco entered the cloud e-mail market using technology it acquired last year from Postpath. Cisco is offering mailboxes with Outlook (MAPI) and Active Sync support for $5 per user per month, and browser-only mail services (derived from the Zimbra open-source Ajax interface) for $3.50 per user per month. The basic mailbox size is 5GB, with options up to 35GB. BlackBerry Enterprise Server services will be available for $1 per user per month. Cisco's Ironport service will provide spam and virus filtering services. Analysis Cisco's long-expected entry into the enterprise e-mail field underscores several fundamental market dynamics. The company is anxious to participate in the fast-growing market for cloud- based application services, which it hopes will buttress its long-term growth. Cisco also needs to protect its voice over IP (VoIP) business, which may be threatened by Microsoft's heavy investment in its own voice services. Since voice services will increasingly be bundled into a single-vendor unified communication and collaboration (UCC) stack, Cisco has to deliver a comprehensive suite of services — with e-mail at the core — to protect its VoIP and WebEx Web conferencing franchises. Cisco enters the field at a time of great flux, characterized by rapid price erosion. Google's commercial Gmail offer, which it discounts to less than $3 per user per month, is attracting considerable attention. IBM recently announced an offer of $3 per user per month. Last week, Microsoft cut the list price of its core cloud collaboration suite to $10 per user per month, and its cloud Exchange service to $5 per user per month. But the shift to cloud e-mail services is recent: No more than 5% of enterprise users currently have a cloud-provisioned mailbox. Cisco WebEx Mail's marketing is likely to focus on its close compatibility with Microsoft Exchange. A server-side MAPI layer will provide rich Outlook support, and Cisco will stress the ease of migration from and coexistence with Exchange. While the cloud e-mail market offers significant opportunities, Cisco will be challenged to clearly articulate the benefits of WebEx Mail and to overcome enterprise concerns over its lack of e-mail market experience. Over the next 18 months, to remain relevant in this space, Cisco must build out a price-competitive suite of collaboration services that rivals Microsoft's Business Productivity Online Suite combination of e- mail, instant messaging, Web conferencing and shared workspace. RECOMMENDATIONS Organizations should: • Cautiously approach cloud e-mail services, especially those organizations with complex compliance and application integration needs. • Actively engage multiple vendors to create competitive pricing dynamics in the procurement process. • Consider segmenting some users on to lower-cost e-mail platforms. Publication Date: 11 November 2009/ID Number: G00172534 Page 2 of 3 © 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
- 3. RECOMMENDED READING • "Exchange Market Vulnerability Starts With Outlook"— In the e-mail software-as-a- service space, the Microsoft Exchange franchise is vulnerable to attack by Google and Cisco delivering support for the Outlook client. By Matt Cain • "Cisco Challenges Microsoft in E-Mail With PostPath Acquisition"— Buying e-mail vendor PostPath will add Cisco to the competitive UCC market, along with Microsoft, IBM and Google. By Matt Cain (You may need to sign in or be a Gartner client to access the documents referenced in this First Take.) REGIONAL HEADQUARTERS Corporate Headquarters 56 Top Gallant Road Stamford, CT 06902-7700 U.S.A. +1 203 964 0096 European Headquarters Tamesis The Glanty Egham Surrey, TW20 9AW UNITED KINGDOM +44 1784 431611 Asia/Pacific Headquarters Gartner Australasia Pty. Ltd. Level 9, 141 Walker Street North Sydney New South Wales 2060 AUSTRALIA +61 2 9459 4600 Japan Headquarters Gartner Japan Ltd. Aobadai Hills, 6F 7-7, Aobadai, 4-chome Meguro-ku, Tokyo 153-0042 JAPAN +81 3 3481 3670 Latin America Headquarters Gartner do Brazil Av. das Nações Unidas, 12551 9° andar—World Trade Center 04578-903—São Paulo SP BRAZIL +55 11 3443 1509 Publication Date: 11 November 2009/ID Number: G00172534 Page 3 of 3 © 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved.