Cisco dominates the Collaboration segment
The revenue from Cisco’s Collaboration segment rose 3% in fiscal 2Q16 to $1.02 billion. The Collaboration segment accounts for 8.6% of the firm’s total revenue.
According to Synergy Research Group at the end of 2Q15, Cisco (CSCO) has a 25% market share in premise-based solutions followed by Microsoft at 18%. Microsoft (MSFT) leads in hosted or cloud collaboration with a share of 8%. It’s followed by Cisco, Google (GOOG), Verizon (VZ), and AT&T (T). In the overall market, Cisco leads with a share of almost 15%. It’s followed by Microsoft at 13% and Avaya at 5%.
Cisco acquired Acano
On February 1, 2016, Cisco completed the acquisition of European (VGK) video conferencing startup Acano for $700 million in cash. Acano is involved in the development of video infrastructure and collaboration software that allows end users to connect video systems from different vendors across both cloud and hybrid environments.
Before this acquisition, Cisco already had a formidable portfolio of companies. These included video conferencing company Tandberg ASA, which Cisco acquired for $3.3 billion in 2010, and web meeting service WebEx Communications, which Cisco acquired for $3.2 billion in 2007.
Last year, Rowan Trollope—vice president and general manager of Cisco’s work collaboration unit—said that many opportunities remain unfilled for work collaboration. Enterprises are switching from traditional conferencing and phone systems to face-to-face video conferencing.
Cisco is facing tough competition from technology giants such as Google’s Hangouts service and Microsoft’s Skype. Microsoft is planning to expand its video conferencing space in 2016 by introducing the Microsoft Surface Hub device for conferencing. This may give Cisco some competition in the conferencing hardware space.