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Is Microsoft Losing to Cisco in Collaboration Space?

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In a fragmented market, Cisco leads by a wide margin

Earlier in the series, we discussed Microsoft’s (MSFT) expected growth in the enterprise collaboration space and its segments. Though the collaboration market is fragmented, Cisco (CSCO) continues to be a leader in the total collaboration market, and in the last quarter it further strengthened its position. Microsoft (MSFT) is the second-largest player in this space.

Hosted and cloud collaboration grew 22% and emerged as the second highest growth segment. Reduced spending on on-premise collaboration offerings partially benefitted this segment.

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According to Jeremy Duke, founder and chief analyst at Synergy Research, “Collaboration continues to be a somewhat fragmented market with many disruptive and high-growth companies targeting specific technology areas.” Slack, Twilio, BroadCloud, Zoom, Fuze, Dropbox, RingCentral, and LogMeIn are some of the fast-growing players in this space.

Apart from Cisco and Microsoft, which are established players in this space, Slack received a special mention “as it has more than doubled in size year over year.”

Has Accompany strengthened Cisco’s position?

Cisco Webex Teams, Cisco Webex Meetings, Cisco IP Phones, and Cisco Unified Contact Center Express are some of Cisco’s collaboration offerings. In mid-2018, Cisco acquired Accompany and formed Cisco Collaboration Technology Group. Accompany’s enterprise AI (artificial intelligence) capabilities leverage ML (machine learning) to automate search and streamline profiles.

This strategic acquisition enabled Cisco to compete with Microsoft’s LinkedIn platform, which has been catering to the global workforce for the last 16 years.

Microsoft’s Office 365, Microsoft Teams, Skype for Business, and Outlook are some of Microsoft’s collaboration offerings. To further increase collaboration through its tools, Microsoft recently announced the free version of Microsoft Teams and rolled out new features in Teams to empower Firstline workers.

The Invesco QQQ (QQQ) invests 9.79% in Microsoft. Other tech giants included in the ETF’s holdings are Amazon (AMZN) at 9.66%, Apple (AAPL) at 9.13%, and Alphabet (GOOG) at 4.58%.

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