Talko would boost Microsoft’s mobile capabilities
In the prior part of this series, we discussed Microsoft’s (MSFT) recent acquisition of Talko, a voice messaging startup. By acquiring Talko, Microsoft will boost its mobile capabilities for team chat. The acquisition is likely to give Skype for Business some relevant modern upgrades. According to Alan Lepofsky, an analyst with Constellation Research, “Skype for Business has not seen a great deal of innovation over the last few years, so if they are able to modernize it with features from Talko, it will provide Skype with a much-needed update.”
Cisco Systems leads the unified communications space
According to Synergy Research Group, and as the above chart shows, Cisco Systems (CSCO) led the UCC (unified communications and collaboration) market with a 16% share in 4Q14. Microsoft followed closely with a ~14% share, while IBM (IBM) remained constant with a ~4% market share. Avaya and Polycom are other players in this space. UCC is an integration of enterprise and communication services such as enterprise content management, e-mail, enterprise social networks, voice, video conferencing, telepresence, and cloud communications.
Investors who wish to gain exposure to Microsoft could consider investing in the iShares US Technology ETF (IYW) and the iShares Russell 1000 Value ETF (IWD). IYW and IWD have exposures of 46.7% and 3.4% to application software, respectively, and invest ~12.5% and 2.0% of their holdings in Microsoft. Later in this series, we’ll discuss how increased competition between Cisco and Microsoft in the UC (unified communications) space is benefiting users.