A week or two ago I referenced the battle between two 800 poung gorillas, Cisco and Microsoft, when it comes to IP telephony. It was a brief observation that you can see here.

Today in Network World, Howard Anderson has a more extensive view-

Microsoft vs. Cisco: The new clash of the titans

Yankee Ingenuity  By Howard Anderson, Network World, 06/12/06

Think of the great rivalries that you know: good vs. evil; Red Sox vs. Yankees; Hertz vs. Avis; Duke vs. UNC; Microsoft vs. (in order) IBM, Novell, Netscape, AOL, Linux, Google, the Department of Justice, Sun, Sony, the European Commission and now, Cisco.

Both companies are dominant in their main markets. Both need new worlds to conquer. Both have seen their growth slowed. Both have embarked on new initiatives based on acquisitions. Charlie Giancarlo, Cisco's chief development officer, scours the world buying intellectual assets for pennies on the dollar. Microsoft does the same, often moving these companies to Seattle so they can be close to the Mother Church. Both companies have billions of dollars on hand. Microsoft has bought dozens of small technology companies, as has Cisco. Cisco has paid really big bucks, $6.9 billion, for cable TV technology company Scientific-Atlanta, mainly because Cisco is not credible with the cable guys. Microsoft bailed out the cable industry a few years ago by investing $1 billion in Comcast, hoping the move would win it friends (it did) who would let the company put its cable box on every TV (they didn't). The cable guys loved Microsoft's money but not its intentions. Sidney Topol, former chairman of Scientific-Atlanta, was once at a Yankee Group conference where a skeptic asked him how earnings would be the next quarter. He replied, "When I come here, I don't talk earnings, I talk concepts!" The skeptic said, "That bad, huh?"

A few years ago I suggested to both Cisco CEO John Chambers and Bill Gates that the day was coming when their companies would be competing against each other. Each replied that I once again had my head up my rear, that they had nothing but respect for each other and their spheres of influence were completely different. Both were lying through their teeth. Kind of like Don Corleone saying that Barzini was his blood brother for all time.

While neither Gates nor Chambers would admit it at the time, network convergence and broadening areas of interest have had Mocrosoft and Cisco on a path toward direct competition for a number of years. That's obvious to anyone who watches the two.

What we call VoIP today is rapidly becoming a market segment viewed as unified communications. It's the convergence of networks to a single network infrastructure. It's the convergence of workstations and PDAs to a singled device (as an option). It's the convergence off applications to a single communications tool. And it's the convergence of applications with network functionality.

Cisco clearly comes at this convergence from the network angle. Their history of routing and switching broadened to embrace VoIP on the network. The Cisco Call Manager is widely deployed and accepted. It's penetration in the market deepens daily. It's a strong and credible solution.

Microsoft comes at convergence from the other end of the pendulum swing, applications. The Windows family of operating environments aren't really a pure operating system. They're a blend of OS and applications. Even hearkening back to Windows 95, we had an OS built on a DOS framework, with a layer of compatible applications bundled into what was really an oeprating environment. That environment has gorwn and matured through several iterations, with Vista being the next in the line. Microsoft also focuses on communications tools, ranging from NetMeeting in the past to the Live Communications Server (and related tools today).

Both companies have gotten better at working with partners, but both frequently partner through acquisition. They buy technology built by smaller entrepreneurs and incorporate it into their fundamental solutions. And, as Howard indicates, what lies ahead is a conflict between two alpha males, both looking for the leadership role.

What does it mean to us? It means presence management, instand messaging, chat via IM, voice communications and voice mail, the key components of unified messaging, will see a lot of change in the next two years. I don't think we'll see a lot of change this year. These to behemoths will hunker down in their respective fortresses and work on their game plan. The battle field has been defined, and it's unified communications.

The winner won't be clear for quite some time. And at some level Cisco and Microsoft will talk about interoperabilty and collaboration while each tries to unseat the other. Watch close. There will be some really interesting stories between these two.

Technorati Tags: Unified Communications, Cisco, Microsoft.