Cisco Systems Inc. (CSCO) is discontinuing its WebEx Social service in a concession that its collaboration software for businesses had lagged rivals.
The world’s biggest maker of computer-networking equipment said today it will stop selling WebEx Social and replace it with a competitive product from Jive Software Inc. (JIVE) Cisco will continue to support WebEx Social for another two years for cloud customers and three for customers who have the software installed on their own servers.
“We continually evaluate our portfolio to ensure it aligns with our strategy and provides the greatest benefit to our customers, partners, and employees,” Peder Ulander, Cisco’s vice president of collaboration solutions marketing, wrote in an e-mail.
While the project-based product will be shut down, the WebEx online-meeting service will continue. The deal with Cisco represents Palo Alto, California-based Jive’s biggest-ever partnership and the first time that another company will be a full reseller, according to Tony Zingale, Jive’s chief executive officer. The combination of the companies’ software allows users to initiate WebEx conferences from within Jive’s software, for example.
Jive shares jumped 10 percent to $8.25 at the close in New York, the biggest gain since November 2012. The rally trimmed the stock’s loss for the year to 27 percent. Cisco fell less than 1 percent today to $23.01.
“Cisco has a few more sales guys than we do and a few more entrenched WebEx installations,” Zingale said in an interview. The combination “is what the market was screaming for, and they were lacking this component,” he said.
The move comes as San Jose, California-based Cisco is facing slowing growth in its core businesses of selling routers and switches. Sales in Cisco’s collaboration business -- which includes WebEx -- declined 5.7 percent to $3.96 billion in the latest fiscal year. The company has eliminated 12,300 jobs over the past two years.
In December the company forecast average sales growth of 3 percent to 6 percent in the next three to five years, which was down from an earlier projection for a 5 percent to 7 percent rise.
Jive has explored a sale of the company in the last several months, Re/code reported in March.
To contact the editors responsible for this story: Pui-Wing Tam at email@example.com Reed Stevenson, Stephen West