Cisco Faces Competition from Microsoft in the Collaboration Space



Will Microsoft acquire Slack after LinkedIn?

Earlier in June 2016, Microsoft (MSFT) announced its largest acquisition to date—the US-based (SPY) LinkedIn (LNKD) for $26.2 billion in cash.

Through LinkedIn, Microsoft can create an interconnected identity for the individual user, which would enable the company to operate in the workforce collaboration space. This is an area where Slack—an enterprise workforce collaboration application—enjoys considerable dominance.

Article continues below advertisement

Slack could be the next acquisition target for Microsoft. Being a SaaS (Software-as-a-Service) offering, Slack is bound to integrate well with Office 365 components like Microsoft’s OneDrive for Business. Slack states that its users spend approximately 100 million hours on it and send ~300 million messages every day.

This might increase competition for peer companies such as Facebook (FB) and Cisco (CSCO) in the enterprise collaboration space.

Microsoft continues to lead the hosted and cloud segment

Microsoft leads the hosted and cloud collaboration space, followed by Cisco, Verizon (VZ), Google (GOOG), and Citrix. According to Synergy Research Group, the total collaboration market grew by 4% YoY (year-over-year) in 4Q15.

Total revenues from the collaboration market rose by more than $9 billion in 4Q15. This space includes enterprise voice, UC applications, email software, enterprise content management, telepresence, and a range of hosted and cloud communications and applications.

In the overall collaboration market, Cisco leads with a share of almost 12%. It’s followed by Microsoft at 11% and Avaya at 5%.

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 this year by introducing the Microsoft Surface Hub device for conferencing. This may give Cisco some competition in the conferencing hardware space.


More From Market Realist