- Company trying to reduce complexity of connecting to calls
- Equipment maker shifting away from proprietary hardware
Cisco Systems Inc. said it has completed a three-year overhaul of its collaboration products and is gearing up to offer conferencing, calling and other tools to businesses as a cloud-based service.
The world’s biggest networking-equipment maker said it will sell the new products as per-user subscriptions over the Internet -- freeing up customers from the need to purchase its hardware -- and allowing users to choose whatever device they want to get on conference calls and share files. Its new system will also be open to outside software.
Cisco, which has dominated the gear that runs the Internet with tightly connected combinations of its equipment and software, is betting that the market for conference calls and video meetings will explode if it can deliver services that are cheaper and easier to use. The company is prepared to shake up offerings that are already making it a lot of money. Revenue at the division surged 17 percent in its most recent quarter.
“This is the time you want to be disrupting yourself,” said Rowan Trollope, a Cisco vice president. “We’re removing even more barriers for it to take off.”
The San Jose, California-based company has spent hundreds of millions of dollars on reworking a system that will be much easier to use than the expensive equipment that requires in-house tech support to install and maintain at most companies, Trollope said. Cisco’s new service will need only online registration and will handle everything in software, replacing collaboration tools that many think “suck,” he said.
Cisco will charge as little as $25 a month for a package of messaging, calling and video conferencing and a package excluding calls for $8.50 a month.
The company’s shares fell 1.2 percent to $27.15 at the close in New York, bringing the loss for the year to 2.4 percent. The Standard & Poor’s 500 Information Technology Sector Index rose 7.6 percent so far in 2015.
Cisco Chief Executive Officer Chuck Robbins said the move to a cloud-based service is an example of how quickly his company is going to deliver products in new ways and won’t get trapped trying to defend its existing technology and market position.
“If you try to defend your historic position, with the speed that the market moves today, you’re going to be in trouble,” he said Tuesday at an event in San Francisco.
Existing Cisco customers will get the ability to plug in their hardware to the new service that will provide tailored offerings for large corporations all the way down to a two-person firm, said Trollope.
Using the new cloud-based system mobile phone users could start a conference call, walk into a meeting room and have the hardware in that space recognize them and transfer the call over to the better equipment there with the push of a button. Under another feature, the system will automatically know the location of a subscriber and route a call to them whether they’re on a mobile device or at their desk. Cisco is trying to remove layers of complications and reduce the process needed to connect to the push of one button, Trollope said.