Like many people, I get lots of email. I get lots of newsletters. I get tons of press releases. And to be completely honest, I get lots of crap. There are a few things I really do watch for and look forward to getting in email. The Mercator Capital Newsletter is one of them. The September issue's out today.

As always, there's plenty to talk about. Go follow the link to read the whole thing, but as usual, I have some comments on bits and pieces too.

Skype Outage – Down But Not Out

eBay’s landmark investment in Skype has had mixed reviews from the beginning, and the service outage that began on August 16 has led only to more questions, most of which cast doubt on what they actually got for their money.

On August 16, the Skype network suddenly went down around midnight, Pacific Daylight Time. With fits and starts, service was fully restored in a couple of days, and has remained in seamless operation since. IP networks are generally not expected to stay up 100% of the time, and what caught widespread global attention was the fact that the Skype blackout happened so suddenly and so quickly – with the whole network being disabled. This has never happened before, creating great cause for concern, not just within the Skype community, but at parent company eBay as well.

Skype took a lot of heat for their outage. Deservedly so in many ways. They may have done a fair job of recovering, but while things were happening, they didn't do so well. There management leadership team still hasn't stepped up in my view. Not really.

Skype has a voraciously loyal following, but there have been repercussions that haven't gotten a lot of open discussions. People who use Skye for business or mission critical voice services learned an age old lesson - there ain't no such thing as a free lunch. And while Skype adds tremendous value in countless ways, it doesn't replace commercial telephone service when that's what you need to conduct business.

Cisco and Microsoft – Too Close For Comfort?

On August 20, the two biggest companies in tech made some very public pronouncements about their intentions to work more closely together. Microsoft and Cisco appear willing to practice what they preach in terms of the big vision they are both selling to the enterprise market – collaboration. Just as they are focusing heavily on solutions that make it easier for people and businesses to collaborate, these two companies are planning to do the same across seven areas, including security, mobility, IT architecture and unified communications.

The two companies are intense competitors, and in particular, seem to be on a collision course in the emerging area of unified communications. They have fundamentally different views here, where Cisco believes that the network is the logical driver for integrating all forms of enterprise communication. Conversely, Microsoft sees the operating system and software as the ultimate platform to drive unified communications. Both are betting heavily on their visions of unified communications, and while both solutions are still works in progress, each has merit and will find a healthy market in time. However, the stakes are very high in that the lead vendor will essentially own the customer, and it is difficult to see how they will truly co-exist in shared accounts.

The Cisco vs. Microsoft battle of the titans has been on the horizon and bandied about for years. And they've shook hands and sworn they'd be friendly competitors time and time again. Other than John Chambers and Steve Ballmer, who believed them this time? Did you? I've got friends who work for both companies ant many different levels. I don't think any of them really believe anything other than this was more of the titans feeling one another out and looking for a soft spot. I know I see it as pure positioning and making nice.

Cisco and Microsoft will be just as friendly as Google and Yahoo. And speaking of Google, with their purchase of GrandCentral, they've signaled very clear intent to play in the big leagues when it comes to unified communications. Google is just the kind of competitor to seize the momentum while Cisco and Microsoft focus on one another.

Art of the Deal: NEC Acquires Sphere Communications

In a departure from the string of large scale acquisitions that have become commonplace in 2007, this month’s deal story is very modest, but still notable. On August 15, NEC of Japan acquired privately-held Sphere Communications, which is based the Chicago suburb of Lincolnshire, IL. NEC is certainly large enough to have made a major acquisition, but the $42 million they spent on Sphere is an interesting choice.

I'm following this story with great interest. I think it's a superb move for NEC, who's always been somewhat on the fringe space of enterprise telecom. They had great success in the SMB and education space. Sphere is a huge bonus for NEC. Next week I'll be meeting with Todd Landry from Sphere, and my primary interest is hearing what the strategy is in the larger unified communications space post-acquisition.

The last thing I really like in the newsletter is the financial highlights at the end. They do a great job of noting who bought who for how much. And blurbs on how much funding different companies got. Good stuff



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