Cisco Continues Its Migration up the Protocol Stack

Cisco, the industrys top networking equipment supplier, wants to become a key software supplier and acquired start up call center reporting specialist Latigent. The behemoths move may eventually deliver more robust call center reporting functions to medium and small businesses.Recently, Cisco has done well financially, reaching $35 billion in sales, with 23% growth in revenue and generating a 15 percent increase in profits at the end of its 2007 fiscal year. But Wall Street can be a demanding mate, one requiring never ending revenue and profit margin increases. Cisco has so dominated the networking market, with leading positions in just about every market segment, that it needed to look outside its purview for additional revenue opportunities.

The companys interest in software has become clearer during the past few years, for instance Cisco has become an important supplier of security solutions. The emergence of unified communications has provided the network giant with an opportunity to leverage its core expertise while making a bigger play in the software market. A unified communications application needs an integrated voice and data network, one based on IP, to operate.

Call center software has been a logical first step into unified communications and Cisco has become a prime player in that market with its Cisco Unified Communications Manager. Many enterprises have invested money in call center solutions with the goal of enhancing their marketing activities as well as providing their customers with better support. One of the challenges that these companies face is analyzing call center performance. Traditionally, vendors focused on workforce activities, such as how long it took agents to answer calls and how long customers were on hold. Recently, corporations have tried to take their analysis a step further. They want to link these call center activities to other company initiatives and measure items, such as the effectiveness of their marketing programs.

A new software genre, dubbed Web analytics, has emerged to fulfill that need. Latigent, which has focused largely on the small and medium market, designed a couple of reporting tools to help companies collect and analyze their call center information. The companys Achiver and BlueVue products enable call center operators to filter and search call details records and determine how the company is performing.

The acquisition is gamble for Cisco. Latigent has interesting products but has been flying under the radar in the highly competitive call center market. The start ups management team Chris Crosby, president, and Jason Kolb, CTO, has experience as users and outsourcers but little expertise in designing and supporting software. Whether or not this acquisition will work out is unclear, but what is clear is that Ciscos has its eyes focused on the software market.

Are you surprised that Cisco is moving further into the software market? What do you think of the companys software? Are you concerned that its long term plans may diminish its effectiveness as a networking vendor?