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Will Cisco dump Tandberg?

"Cisco will exit the hardware-based group video conferencing and telepresence business... A spin-off into a new company (how ironic were it to be named Tandberg) much like AT&T did years ago with Lucent."

Hummelstown, PA:   Fri, 1/11/13 - 10:26pm    View comments

Cisco TelePresencesFACT:   Since Q3'FY12, Cisco's quarterly collaboration sales which include Tandberg sales (view the Tandberg product portfolio prior to its April 2010 acquisition by Cisco for $3.3 billion), have been in a steady year-over-year (YOY) decline.

Here are Cisco's quarterly collaboration sales (view spreadsheet without frames):

Source: Cisco Systems

View large image of the Tandberg Total Solution

Tandberg Total Solution

Andrew W. DavisWainhouse ResearchOminously or perhaps fortuitously for Tandberg customers, I mean, it will obviously depend are your viewpoint because earlier this week the respected Boston based independent market research firm, Wainhouse Research, released its:

Analysts Predictions for 2013

"From the likely to the daringly provocative, here are some Wainhouse Research analyst predictions for the coming year."

So what in my opinion was the most daringly provocative Wainhouse Research prediction?

Well, the winner in my opinion of the most daringly provocative prediction was Andrew W. Davis, the Wainhouse cofounder and senior partner:

Cisco will exit the hardware-based group video conferencing and telepresence business and concentrate on voice solutions, UC, social, and software clients for all forms of collaboration.

This will take one of three forms:

  1. A shutdown, as was the case with Flip video;
  2. A sell-off to a third party much like HP did in 2011 when it sold its Halo business to Polycom;
  3. A spin-off into a new company (how ironic were it to be named Tandberg) much like AT&T did years ago with Lucent;

It appears to me that Davis did not make his above prediction out of the clear blue either, how so?

Well, 2-months ago Andrew W. Davis alarmingly stated the following in his No Jitter article:

Winge's name can be added to an impressive list of departed videoconferencing sales and engineering talent that includes, but is not limited to Fredrik Halvorsen, Geir Olsen, Hakon Dahle, Tom-Erik Lia, Larry Satterfield, Mark Dumas, Joel Brunsen, and the entire Codian MCU development team.

In addition, changes have been made at a structural level. Most importantly, the sales overlay structure is gone--there are no more video specialists, rather all sales people are expected to sell all Cisco products. The Tandberg account managers have been replaced with Cisco people, many of whom are just learning how to spell video conferencing. This is a recipe for running aground. Channel partners, the very people that made Tandberg so successful, are still learning how to do business with Cisco--apparently it is not as easy as one would think. Is it any wonder that resellers and customers alike are looking for alternatives?

Question:   Since it appears Cisco CEO John Chambers can't get the $3.3 billion Tandberg acquisition to work, should Cisco's shareholders be alarmed?

Related stories:

Will the Perfect Storm Sink Cisco's Collaboration Boat?

Cisco's Odd Johnny is out!

Cisco's 2Q12 videoconferencing revenue dropped -23.7% year-over-year

Why are Cisco's TelePresence sales in decline?

Does Polycom telepresence cost $2.1 million less than Cisco telepresence?

What's your take?

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