Cisco's play for Tandberg ruffles channel feathers

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Cisco's play for Tandberg ruffles channel feathers

Cisco's proposed acquisition of video conferencing rival Tandberg has been met with a frosty reception by competitors, analysts and channel partners, with concerns abounding that the buy will create friction in the sales channel.

The networking giant announced earlier today that it would buy the video conferencing specialist for $3.45 billion dollars.

Claudio Castelli, senior analyst at Ovum told CRN the acquisition that while the vendors would benefit - helping Cisco enter the low-end video collaboration market, he predicts "some overlapping on the sales and channels side."

"Cisco already has relations with most of Tandberg's customers and partners," he said.

Biagio La Rosa, managing director of local Tandberg reseller and UC integrator - Generation-e - told CRN the video conferencing market was very strong, healthy and vibrant with lots of opportunities.

But Cisco's move didn't sit well with the Tandberg reseller.

"We have a strong affiliation with Microsoft," he said. "We integrate Tandberg products with its UC product - Office Communications Server. The relationship between Microsoft and Tandberg will suffer because it's not best friends with Cisco."

Cisco's tele-conferencing products aren't as well received in the market as those of Tandberg, La Rosa claimed.

"You don't buy a company and not keep its products," he said. "This will cause a lot of product overlaps. Also, Cisco's products are commoditised and don't offer very much margin for resellers."

La Rosa said it will be business as usual for the integrator, as it waits for the acquisition to "wash out".

"There are rumours that HP will make a counter offer," he said. "Personally I think HP would be better suited to acquiring Tandberg because there won't be any product overlaps."

View from rivals

Michael Chetner, country manager for A/NZ at Polycom told CRN he hoped confusion around overlapping technology will distract both companies and drive customers to seek alternative vendors.

Chetner believed the buy-out will result in competing technology strategies and product duplication, "creating confusion for customers and partners".

He said current and prospective customers will consider Tandberg to be in a state of flux following the announcement.

"Tandberg will be tied solely to Cisco's Call Management platform, which represents only 11 percent of the global call management market," he said.

Bernhard Kotarski, co-owner of Perth-based integrator Concept AV said it has had very few dealings with Tandberg in the past.

The Polycom reseller said it might look at picking up Tandberg products if Cisco provided the "right-type of marketing" for the company.

But he warned against broad-based distribution of the video conferencing products.

"If Cisco goes through an IT distributor for the video conferencing specialist then it will drive away the audio visual channel," he said.

Kotarski said from his experience, IT distributors were good at getting out "bits and pieces".

"Video conferencing requires integration and technical expertise - which is very difficult to get from an IT distributor," he said.

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