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Cisco, Microsoft UC battle to benefit tech buyers

Tech buyers can take advantage of the fight between Cisco and Microsoft for UC customers -- a battle that intensified this week with Cisco's overhaul of Spark.

Cisco has its arsenal in place to battle Microsoft for unified communications and collaboration (UCC) sales, and...

companies should ready their best negotiators to take advantage of the fierce competition between the two vendors.

Cisco introduced for tech buyers this week an overhaul of Spark, its online collaboration service. The changes, unveiled at the company's Collaboration Summit in San Francisco, included adding IP voice and video calling via a cloud-based PBX. The calling features essentially transformed Spark into a UC as a service product.

Cisco launched the new Spark, which will be available in its entirety in the first quarter of next year, about a week after Microsoft introduced its own cloud-based PBX in Skype for Business. The latest feature is part of the premium version of Office 365.

Cisco and Microsoft sales teams are expected to go head to head in competing for companies with 250 employees or more. While neither vendor has everything a company needs, their respective UCC portfolios are the most extensive in the industry, experts said.

"It is indeed a buyer's market, especially with the level of competition between Cisco and Microsoft," said Irwin Lazar, an analyst at Nemertes Research, based in Mokena, Ill.

Cisco executives told resellers at the partner summit that the company was prepared to provide deep discounts to entice companies to subscribe to Spark. Also, resellers could earn up to $100,000 on a qualified deal.

Those incentives are an indication of Cisco's determination to beat Microsoft on price and technology, a combination that's likely to lead to good deals for tech buyers.

"It [Spark] is a clear shot at the Microsoft Skype for Business world," said Andrew Davis, an analyst at Wainhouse Research LLC, based in Duxbury, Mass. "It shows that the Cisco-Microsoft battle has a long run ahead of it."

The two tech giants won't go it alone in all segments of the multibillion-dollar UCC market. In competing for smaller businesses, they will confront a wide assortment of competitors. They include UC vendors Mitel Networks Corp., Alcatel-Lucent Enterprise and Unify Inc. Also, other companies, including  8x8 Inc. and RingCentral Inc., sell hosted communications, and telecommunication companies, such as Verizon, Comcast and AT&T, provide UC bundles.

Nevertheless, Cisco and Microsoft will likely be on many companies' short lists. A Nemertes survey found that 42% of midsize and large companies want to standardize on one UC platform. About half of that group favored Microsoft and roughly 35% favored Cisco.

Cisco vs. Microsoft UCC

Both vendors plan to leverage their huge installed base. Cisco will take advantage of its clout in networking and telephony infrastructure, while Microsoft will tap the growing number of companies opting for Office 365 over the company's on-premises Office productivity suite.

To ensure customers can easily move to Spark, Cisco has integrated the collaboration product into its video conferencing gear and the IP-based on-premises communications system, called Unified Communications Manager (UCM). In-house calling is seamless between Spark and select Cisco phones connected to UCM. People can hold virtual meetings across devices, including smartphones, desktops and Cisco telepresence room systems.

Spark contains more collaboration features in one user interface than any single Microsoft product, analysts said. Along with packing more in its software, Cisco has made Spark easy to use.

"Simplicity will be key to the product's success," said John Bergeron, executive vice president of technical architecture at Cisco reseller Venture Technologies, based in Englewood, Colo.

Spark's price of $25 per user, per month, which includes cloud-based calling, is "totally sellable," Bergeron said. Venture customers have between 50 to 500 employees.

Cisco is providing a 90-day trial period to companies that want to test Spark. The vendor will also provide up to five of its hardware products for the trial.

Cisco and Microsoft will compete in a collaboration market that Cisco believes will be worth $60 billion by 2019. With so much money at stake, the companies haven't finished developing their respective portfolios, so tech buyers can expect to get even more for their money in the future.

Next Steps

Mistakes to avoid in an enterprise collaboration initiative

Comparing Spark and WebEx collaboration services

Collaborative communications through social software and UC

How Microsoft and Cisco corporate apps stack up

Dig Deeper on Collaborative Applications

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