For Cisco, Slack Would Have Been a Better Acquisition than Acano

November 23, 2015

Why buy into legacy?

Cisco acquires Acano, instead of going after Slack

Last week, Cisco made another acquisition in the WebRTC space. This time, Cisco acquired Acano. Acano is a rather new company that started life in 2012 – close to WebRTC’s announcement.

Acano makes use of WebRTC, though I am not sure to what extent. There are 2 reasons Cisc lists for this acquisition:

  1. Interoperability – support for “legacy” video conferencing, Microsoft Skype and WebRTC
  2. Scalability

To me, scalability comes from thinking of video conferencing in the mindset of WebRTC – WebRTC services are mostly cloud based and built to scale (or at least should be). Old video conferencing models thought at the scale of a single company at best, with business models fitting the high end of the market only.

That brings me to why. Why is Cisco buying into legacy here?

If there’s anything that is interesting these days it is what happens in the realm of messaging. And for Cisco, this should mean Enterprise Messaging. I already stated earlier this year that Enterprise Messaging is a threat to Unified Communications.

Don’t believe me? How about these interesting moves:

  1. Atlassian, owner of HipChat (=Enterprise Messaging) acquiring BlueJimp, authors of the popular open source Jitsi Video bridge
  2. Slack searching for developers to “build audio conferencing, video conferencing and screen sharing into Slack”
  3. Cisco launching its own Cisco-Spark – a video conferencing service modeled around messaging
  4. Unify launching circuit – a video conferencing service modeled around messaging
  5. Broadsoft announcing UC-one – a video conferencing service modeled around messaging

Which brings me back to the question.

Why buy into legacy? At scale. With interoperability. Using fresh technology. But legacy nonetheless.

Why not go after Slack and just acquire it outright?

When Cisco wanted a piece of video conferencing, they didn’t acquire RADVISION – its main supplier at the time. It went after TANDBERG – the market leader.

Then why this time not buy the market leader of enterprise messaging and just get on with it?

Congrats to the Acano team on being acquired.

For Cisco, though, I think the challenges lie elsewhere.

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  1. I think for Cisco that Spark + Tropo = Slack, meaning Tropo was their M&A for messaging space. Happen to agree that they need more there too, but Spark (the messaging parts, extended) + Tropo (extend internally and externally) is probably the starting point.

    Acano is more for assets such as their scalable, software-based MCU though we will probably have to wait to see exactly what Cisco has in mind there.

    1. I am sure Cisco sees Spark + Tropo =Slack. I wonder if that equation will hold water with the rest of the industry (not only the UC industry).

      I also understand that Acano wasn’t about Slack. It just made me wonder why aren’t they trying to get into the messaging market in a bolder way. Not sure if what is missing is a software-based MCU or a more modern SFU (thinking Jitsi here, who got acquired by Atlassian).

    1. So you pay $600M to get connectivity to Skype? What’s holding Microsoft back from closing the lid on that connectivity if they wish to do so?

      What Cisco acquired is a good team of engineers (for the second time – Acano started from by people from TANDBERG, an earlier video conferencing company that Cisco acquired), a cloud based solution that is mostly agnostic to the video technology (in architecture, which isn’t easy to achieve), and a customer base – Acano was eating at Cisco’s target customer base (see

  2. You are missing out the people factor = OJ Winge. The CEO and founder of Acano, OJ Winge is a long time Tandberg and Cisco veteran who founded Acano when he left Cisco. You can be sure that Acano is focused on holes that Cisco has and that they will have thought about the integration issues which will make acquisition and absorption by the Cisco borg easier, along with strong people and cultural alignment. Slack may be more interesting but is likely to be a much harder acquisition to absorb culturally and technologically without killing the company in its current form.

  3. Slack is a terrific company. Big respect for what Stewart and team have done and I don’t think he’s looking to sell his company right now…;) . I’m also a big believer in business messaging, which is why we built Spark (started three years ago with the infra). We also acquired Tropo to help us build the platform side of spark (stay tuned)… Spark has many of the same capabilities that exist in slack… We have differentiated against the field by focusing deeply on enterprise grade security and encryption, an outstanding mobile experience and integration of real time voice and video (1:1 and Meetings)…. We are well on the way to integrating and replatforming Webex onto spark backend. The result of all this is a next generation communications platform hosted and delivered through the cloud by Cisco. Meanwhile our whole business is accelerating and Acano has the right team and technology we felt we needed to continue this acceleration! we bought Acano as much for what they’ve built as where we are both going. Aligned visions and two A teams coming together.

    1. Rowan,

      I’d like to thank you for stopping by hear – I appreciate your time and your comment. I do understand that Pexip is the perfect fit for Cisco. Some even say that the company was “designed” to be acquired by Cisco from its inception, so things do click there perfectly. I guess it was almost inevitable to happen.

      I also don’t believe that Spark is up for sale, though they would be a great asset to whoever succeeds in putting his hands on that service. My own gut feeling tells me that UC vendors need to stop focusing so much with real time – the here and now – and to divert some of their attention towards collaboration that doesn’t necessarily look like a second video channel. One such thing is machine learning and automation (see the article I published on the following day as an example –

      There is real value in getting out of the comfort zone that is real time for UC vendors.

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