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Cisco Chews Up the Scenery in the Interoperability Drama

Last week, Cisco raised an objection to the Microsoft acquisition of Skype, saying it would hurt video conferencing interoperability — even though, in this space, you could argue Cisco is not the poster child for interoperability. Coincidently, I met with the CEO of LifeSize last Thursday, and he saw this Microsoft acquisition as a huge opportunity. LifeSize is the poster child for video-conferencing interoperability.

So why would Cisco complain about a move and highlight something it doesn’t do as a reason to block it, while LifeSize would applaud the same move because it plays well with its interoperability advantage? Given this is an election year, there are a lot of parallels to politics in the juxtaposition of these two companies and this one acquisition.

I’ll close with my product of the week: a driving experience that saved me US$120k.

Politics, Technology and the Truth

It often seems that in an election year, the truth takes a holiday. For instance, the Obama administration is requiring insurance providers of religious organizations to supply birth control pills. This is consistent with the state’s position on nondiscrimination. If you supply a service for one, you have to supply the same service for another, regardless of race, religion or sexual orientation.

This was positioned by Obama’s opponents as an attack against the Catholic church. It wasn’t — it was an attack on discrimination. However, it does involve birth control, which is a practice the Catholic church opposes. You couldn’t exactly come out with a platform saying it is OK to discriminate against people who work for religious organizations, so the anti-church message was crafted, even though Obama appears to be pretty religious.

If you look underneath the pro-life vs. pro-choice controversy, it isn’t about babies — it is about control. Who should make life or death decisions regarding a pregnancy is at the core of the dispute: the government and the church, or the individual. But as a right wing party, you can’t very well argue for increased government control of personal decisions, so the platform becomes about life. If it really were about life, there would be more effort to fund and care for children born to parents who don’t want them, but that isn’t even a minor part of the pro-life/pro-choice debate. It’s all about who can make the decision to abort a pregnancy.

The sad thing is, we don’t seem to get this is all about manipulation. Someone — or some group — is tricking a large number of people to agree to a position that they would likely not support, if they fully understood what is at stake (personal freedom). For instance, if the government can make invasive medical decisions in one area, isn’t it likely it will make them in others? At some point, we’ll live in that Big Brother world of 1984.

I’ve clearly become a Ron Paul fan of late.

Video Conferencing

The problem with video conferencing is that it historically doesn’t interoperate. From FaceTime to Cisco Telepresence, one system generally can’t work well with another. There are no common directories, and even if they connect, they typically provide such a crappy experience that the primary vendor can convince you to buy more of its stuff in order to get an adequate experience. It is kind of like TV was when RCA owned everything, except no one company is as powerful as RCA was, so it just means stuff doesn’t work.

The end result is that companies like Cisco can have high-margin systems costing hundreds of thousands of dollars — and even though there are cheaper alternatives, those alternatives can’t get access to the proper Cisco control points to ensure as good an experience, so they can’t compete, and Cisco maintains margins.

This is kind of like what the PC market was before Microsoft, and the server market was before Microsoft Server and Linux. In a Unix world, companies like Sun were king, and everyone paid a huge premium because once locked in, you couldn’t move.

However, if Microsoft does with Skype what it did with Windows, it will establish a common, low-cost, high-definition standard that will commoditize the video conferencing market much as it did with PCs and servers. Suddenly, stuff will work together, and buyers will no longer have to buy the massively expensive and very high-margin, high-end systems. They’ll chase the lowest-cost adequate technology provider.

This gives low-cost providers like LifeSize the potential to grow up to be the next Dell while companies like Cisco collapse and become the next Sun. But Cisco can’t step up and argue it is pro-high margins and against interoperability, so instead it crafts a platform on the evils of Microsoft and comes out in favor of standards.

The reason Cisco came to the table late with its complaints is that it wants Skype crippled; it doesn’t care about the merger as long as Skype can’t become the kind of common product Windows became. Using Sun as the example, it has every right to be afraid. Recall Sun went to war against Microsoft for much the same reason — though Cisco should likely take a harder look at how that turned out.

Wrapping Up

I’m pro-informed choice. I don’t want a vendor or the government in my life making critical choices for me. That is true in my personal as well as my professional roles. I’m not a fan of being given selective information to trick me into making a choice that is against my best interests, nor am I a fan of some corrupt or uninformed bureaucrat making decisions for me. I think, and admittedly hope, most people are like me in this regard. We would rather make our own choices and at some point hope the information industry can step up to the challenge of making us all better informed.

In the end, the reason LifeSize is for the Skype/Microsoft merger and Cisco against it is that the merger should result in the interoperability that Cisco admits is required and the low-cost hardware we consumers and businesses want. LifeSize, being a low-cost provider, becomes another Dell and Cisco another Sun, and that is at the core of this dispute.

Product of the Week: Audi Driving Experience, or How I Saved $120k

Product of the Week

I like to drive fast. It is unfortunate that the only place you can do that legally is on a track, and unless you’re in law enforcement, you don’t get training in how to do that safely and well. There are occasions when you need to drive fast — like when I had a kidney stone a few years back and experienced a level of pain that exceeded rational thought. I was somewhat outspoken about my wife’s subsonic sedate pace to the hospital, even though she was clearly doing her best.

Audi R8

Audi R8

On top of this, I’ve been seriously attracted to buying an Audi R8, one of the few affordable supercars in the market.

The Audi Driving Experience provides a series of classes (one starting at a very affordable $250) that can teach you how to drive fast on a track and gives you skills that you may someday need if you have to get someplace quickly. The Valentine’s Day package we tried last week was unfortunately not on the track. It was a sedate drive through Napa, California wine country, in an R8. It was also the first time I’ve ever been beaten up by a car.

The reason is that the current (2012) R8 uses a single clutch R-Tronic transmission as an automatic, and when it shifts under power, it kind of bounces you off the steering wheel with each shift. Your passenger gets cozy with the dash, which — and I can say this from experience — doesn’t lead to an amorous response, unless you like an unconscious partner. It also shifts to neutral automatically if you sit for long, which can — and did — lead to a light turning green and a high-profile $120k car revving its engine and not going anyplace, with an impressive audience.

At the end of the day, I got in my Audi S5 and I loved my car again (it has the twin clutch R-Tronic, which is like butter in comparison). This saved me the $120k cost of an R8. Unfortunately, the next R8 gets the better transmission, so I may revisit my position when it ships next year. In the end, I did have a great time and plan to go back for one of the track courses, making the Audi Driving Experience my product of the week.

Rob Enderle

Rob Enderle is a TechNewsWorld columnist and the principal analyst for the Enderle Group, a consultancy that focuses on personal technology products and trends.


  • Great story, Rob! I AM a BIG fan of Skype and LifeSize for corporate/enterprise video. And then you really had me when you wrote about the R8…now I’m a big fan of your’s!

  • Cisco has its own interop issues, but why do you (or LifeSize) believe that Microsoft/Skype will play nice if not forced? Microsoft has a bit of a track record of leveraging their platform position to block competitors; this greatly enhances the possibility of a single vendor "owning" the space and trying to block (or succeeding in blocking) others from entering by refusing the interop with them.

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