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Cisco's Spate of Acquisitions Creates Disruptive Waves Across the Collaborative Tech Market

Cisco, following a spate of collaborative technology acquisitions, has now completed its acquisition of Voicea, a provider of real-time transcription, voice search and meeting highlight software, in a move to expand its WebEx collaboration platform. This acquisition has been finalised at a time when the conferencing market is experiencing a disruptive shift, as the use of video and web platforms has become increasingly ubiquitous.

In the hardware market, higher-end video hardware solutions from vendors such as Cisco and Polycom are jostling against a range of cost-effective software agnostic peripherals (SWAPs) from providers such as Logitech. In the platform market, a younger generation of cloud players threaten established leaders like Cisco. As the segment becomes more crowded, the integration of premium feature sets will become increasingly important for vendors looking to differentiate at the high end. The Voicea acquisition will help support this strategy at Cisco, providing a value proposition for increased platform and hardware spend in a market that has seen the erosion of ASP’s in recent years.

The conferencing market continues to feature as a major growth vertical for audio and visual manufacturers, with developments in technology enabling a wide array of new products and entrants. The growing trends of VoIP, video conferencing and collaboration have led to a groundswell of periphery and central devices to support, bringing an increasing number of solution providers from different parts of the AV/IT market into the meeting room.

With more tools added to Cisco’s platform, WebEx will be better placed to fend off other premium players, such as Microsoft, which is pushing voice, transcription and translation. At the same time, SWAPS are bringing down ASPs for in-room conferencing solutions, increasing the number of end points and the use case for video. This is a good thing for platform providers, but also threatens the value and the market opportunity for higher end hardware solutions. Cisco’s business model has traditionally been focused on providing a combined platform and hardware offering to a premium market segment. A number of the new disruptors in the segment, cloud players like Zoom, typically only provide a platform and rely on third party hardware to access the platform in meeting rooms. Cisco can also do this with WebEx, but there’s a greater revenue opportunity in a combined software and hardware model.

Cisco and Poly still dominate the video conferencing market in terms of revenue, commanding more than 50% share between them, but Logitech is now the leading hardware and endpoint vendor in terms of units shipped in 2018. Additions like Voicea are essential for Cisco’s combined model to win out in a market that is flooded with a growing number of low-cost SWAPs and cloud providers. Advanced feature sets like security and innovative audio, that create a value proposition for Cisco’s best-in-class hardware, provide an edge that helps its customers work faster and smarter.

With SWAPs and cloud performs becoming increasingly sophisticated, Cisco’s acquisitive move helps conserve its value proposition to the 130 million people who use Webex every month.

Cisco’s Voicea acquisition is happening at a time when remote working is trending upwards, and cross-site communication, room automation and technology ROI are in the spotlight. What’s more, growth in international teams and increasingly international clients and partners are on the agenda for many businesses. According to recent end user research carried out by Futuresource, over a quarter of companies in the USA, UK, France and Germany expect to add additional meeting rooms over the next three years. On average, 18% of meetings include a remote participant joining by phone, video or web conferencing. In addition, 32% of respondents reported an increase in the average amount of time spent every week meeting remotely through the use of conferencing technology.

With a current total addressable market of more than 5.6 million meeting rooms across Western Europe and North America, it’s no surprise that a wide variety of vendors are focusing their efforts on the vertical. And from a regional perspective, Futuresource research shows that the USA has a much higher propensity to invest in conferencing technologies for meeting rooms, presenting a significant opportunity to vendors focusing on that market.

This acquisition by Cisco could go some way to creating another tangible advantage, providing more reasons for businesses to explore its offering. According to Cisco, it already has 95% of Fortune 500 companies within its collaboration customer base, and the company is in a powerful position to influence market movements.

The acquisition is expected to close in the first quarter of Cisco's fiscal year 2020, subject to customary closing conditions and required regulatory approvals.

Related Futuresource research is available in the three recent industry reports, Dedicated Audio Conferencing Hardware Market Assessment, Corporate Meeting Room End User Perspectives and Video Conferencing Market Report. To view all of the Professional AV reports, please click here>>

About the author

Chris Mcintyre-Brown

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Here at Futuresource Consulting we deliver specialist research and consulting services, providing market forecasts and intelligence reports. Since the 1980s we have supported a range of industry sectors, which has grown to include: CE, Broadcast, Entertainment Content, EdTech and many more.