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Tech giants Cisco, Microsoft team up

  Venture Business News  -   POSTED: 2007/08/21 12:33

Microsoft Chief Executive Steve Ballmer made assurances that there would be no corporate "jujitsu." Cisco Systems' CEO John Chambers said he trusted Microsoft.

In an unusual press event to showcase their evolving business alliance, the leaders of the two tech giants Monday described how an increasing level of collaboration, as well as "respectful" competition, will drive the next wave of innovation and business success.

The alliance between Cisco and Microsoft, Chambers said, "could be a role model for our industry."

Seven initiatives, ranging from security to entertainment, were announced in a New York press conference. Questioned first by television interviewer Charlie Rose and later by business reporters, Ballmer and Chambers explained how a partnership that began 10 years ago had deepened in the past three years.

Ballmer, known for his intense manner, and Chambers, more diplomatic with a soft West Virginia drawl, offered a vision that sharply contrasted with the historic and fierce rivalry between Microsoft and some other Silicon Valley companies, such as Apple, Netscape and Sun Microsystems. Allegations of anti-competitive practices have dogged Microsoft since at least 1991, ultimately leading to a federal antitrust lawsuit and settlements that required the Redmond, Wash., company to change some of its practices.

Cisco's relationship with Microsoft has never been that adversarial. On Monday, the executives said collaboration would occur whether they participate or not because the so-called Web 2.0 era makes it easier for users to share information and work together.

Moreover, customers are demanding such cooperation because they expect technology to become more user-friendly, Ballmer and Chambers said. Rather than choosing one company's line of products, they explained, business customers are asking for "interoperability" on a range of products from the companies. Business clients, Ballmer said, are still "glad for the competition," but also saying, "tell me how you are going to work with Cisco."

Chambers, returning to a favorite theme, said he believed that collaboration between companies will deliver the next wave of innovations.

Cisco and Microsoft are teaming up on projects that previously would have been handled internally. Until now, homegrown patents and acquisitions have been the primary ways for a company to grow its technology portfolio.

Microsoft's reputation for rough business tactics was noted in the press conference. Questioned by a reporter, Ballmer said Microsoft would not try to manipulate the alliance for a competitive advantage against Cisco. It's not a scenario, Ballmer said, of Microsoft executives anticipating a meeting in which "John's (Chambers) going to tell us everything he's doing so we can jujitsu him. That's not going to happen." Chambers later said the alliance would work because he trusts Microsoft.

But collaboration will pose a management challenge, particularly in research and development, Chambers said. He noted that it already was difficult within Cisco to manage research across departmental "silos." "This requires a very sophisticated level of management," he said.

The alliance, according to a press release, will focus on several key areas of collaboration, including:

• IT architecture. "Customers are asking Microsoft and Cisco to come together on their infrastructure visions . . . as manageability, performance, security and scalability become even more critical to success in the evolving service-oriented infrastructure."

• Security. Because of the increased threats of viruses and hacks, "true security requires an architectural approach vs. a deployment of point solutions." Moreover, Cisco and Microsoft are working with storage giant EMC on the Secure Information Sharing Architecture, which allows government agencies to more effectively share confidential information across traditional boundaries.

• Wireless and mobile. The companies are working to allow Cisco's Unified Communications Manager to interact with Windows Mobile-powered devices. "This will enable customers to enjoy integrated presence, telephony, calendaring and other unified communications capabilities."

• Connected entertainment. Anticipating an Internet-driven revolution in home entertainment, the partnership will promote interoperability in areas like Internet Protocol TV.

Both executives said the companies still expect to compete in many areas. Ballmer said he respects Cisco's products but that in areas of direct competition such as Web conferencing, "I respect ours more."

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