Cisco buys into corporate e-mail

Pushing further into Microsoft’s (MSFT) territory, Cisco (CSCO) announced Wednesday that it has signed a $215 million deal for business e-mail shop PostPath.

The move bolsters Cisco’s strategy to expand into the office software market by adding e-mail and calendar services to its existing roster of so-called enterprise networking features. PostPath, based in Mountain View, Calif., develops Linux-based software that gives corporate customers an alternative to Microsoft’s Exchange system. PostPath says its e-mail servers are compatible with a nearly all business systems, including Apple (AAPL) and its iPhone.

Cisco, in announcing better-than-expected quarterly profits but a lower growth forecast, said earlier this month that it planned to make acquisitions in adjacent markets outside its core business selling Internet equipment.

With Google going door-to-door trying to sell its business software to Microsoft clients, this latest move by Cisco into e-mail isn’t necessarily a great comfort to the Redmond, Wash. giant. Given Cisco’s dominance in corporate IT gear, there is potential for Cisco to offer an alternative to Microsoft Exchange.

Cisco plans to add PostPath’s applications to its Web-based services, also known as “cloud computing.” Software providers have for years been looking for ways to let business users access their desktop computing tool wherever they happen to be. This way employees could collaborate on tasks using features like instant messaging, video conferencing or document-sharing services.

Microsoft’s quest to extend its desktop software dominance to the Web was a driver behind its failed bid for Yahoo earlier this year.

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Filed under Google, Internet, Microsoft-Yahoo, Mobile, Yahoo, microsoft

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we are a MS and Cisco shop and like MS has VOIP and VM technology they cant touch Cisco and VMWare, in the same way Cisco wont compete in the email space. As a matter of fact their new licensing model CUWL has become difficult to navigate in that Tech and Software support are both separate and often difficult to upgrade form older contracts etc.. Cisco is becoming MS in some ways and that has shown up in the lack of understanding of the network environment and how good their products are, which is declining. Ciscos ability to deliver has been affected as they become more of a software company and I personally have experienced the difficulties with Cisco recently. and their linux platforms have not been all that solid.

Posted By Robert, Denver, CO : September 1, 2008 3:19 pm

Cisco has history of doing too many acquisitions with too little success rate. I sometimes wonder if they approach acquisitions like buying shares – with a belief that the game plays off on and average.

Posted By Srinivas, VA : August 31, 2008 8:35 pm

Bad idea Cisco, focus on what you’re good at. There is still so much more to do in the world of data and voice networks. For example, why didnt you purchase Network General when they were up for sale? Now email…. to much of a tangent if you ask me.

Posted By Eric, SLC Utah : August 28, 2008 7:41 pm

I’m sorry I think you got your companies mixed up. “cloud computing” isn’t the same thing as hosted services. Amazon and Google have cloud offerings (run your virtual machines on their infrastructure) but Cisco isn’t in that game yet.

Posted By Russell, Raleigh, NC : August 27, 2008 11:28 pm

I think this is not going to make much of a difference in much. I don’t think I will be giving up my exchange server anytime soon. It is a great in house cost effective server that is very stable. I have heard that Microsoft’s Hosted filtering is a great solution that works well. It is going to be a competetive no doubt.

Posted By Eric, Ciincinnati OH : August 27, 2008 6:35 pm

all companies have been pushing in this direction, towards offering “integrated collaboration” solutions, which seems to be the battleground for the times to come. google had been slowly building its suite with google pages, google apps etc; microsoft stepped into the fray with its “hosted productivity suite”; and now cisco has also plunged in!

even the players serving growing business are going the same way. hyperoffice recently launched its web conferencing solution hypermeeting to add the missing piece to its suite already equipped with messaging and collaboration features.

Posted By Pankaj, New York : August 27, 2008 3:53 pm

Once again, Cisco makes a sound investment in an email technology vendor. Just like it did with IronPort. Great choice.

More analysis at RichiJennings.com

Posted By Richi Jennings, Sandhurst, England : August 27, 2008 12:27 pm

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