Businesses communicate in a lot of ways and, increasingly, are turning to an array of videoconferencing tools as the technology becomes easier to use and more ubiquitous. It provides an upfront, cost-effective opportunity for virtual face-to-face meetings.

The technology is blossoming; Nearly every week, a news release comes in about the latest service to launch, interoperability deal reached or about a new product rolling out targeting the SME and SMB markets, not to mention the near daily releases that pop up with the newest consumer offering.

The technology has, like a YouTube video, seemingly gone viral. Its mobility, its ease of use has begun to make it so commonplace that it's increasingly become just another app or program that users click to use and forget about.

In fact, ABI Research senior analyst Subha Rama said in a webcast last week that the technology, which has been gathering steam, was likely to explode once LTE becomes widely available, especially with so many more dual camera devices coming to market.

"When the technology integrates with a popular mobile device the issue resolves almost instantly," said Rama during a Webcast on Thursday.

But there's some new concerns about videoconferencing and security that are bound to rattle some cages in the coming week, and they're extreme enough that they could potentially cause adoption to stutter until they're resolved.

In a New York Times story today, a security officer for Rapid 7, told of how he created a computer program that, in two hours, discovered 5,000 open videoconference systems that were outside the firewall of their companies and that were configured to automatically answer calls.

The companies included law firms, venture capital companies, pharmaceutical firms, universities and medical centers.

Moore said he was able to call into systems made by Polycom (Nasdaq: PLCM), Cisco (Nasdaq: CSCO), Logitech (Nasdaq: LOGI)'s LifeSize, Sony and others. Polycom, the Times said, ships all of its platforms with the auto-answer feature enabled by default (which can easily be changed by users, Polycom told the Times).

"It boils down to whether organizations are aware of the risk, and our research indicates that many, even well-heeled venture capital firms, were not aware and do not implement even the most basic of security measures," he said.

Mike Tuchen, CEO of Rapid 7, warned that companies simply have dropped the ball on videoconferencing security, especially as videoconferencing's popularity has grown.

"The entry bar has fallen to the floor. These are literally some of the world's most important boardrooms--this is where their most critical meetings take place--and there could be silent attendees in all of them," he said, sounding an ominous tone.

"Any reasonably computer literate 6-year-old can try this at home."

How secure is videoconferencing? Is the rapid expansion of the technology putting sensitive business information at risk? And, does the surge of new, less expensive videoconferencing solutions open the door to hackers even wider?

Love to hear your thoughts.--Jim

There's little love lost between Cisco (Nasdaq: CSCO) and HP (NYSE: HPQ), the animus went very public at Interop this year and has been percolating a long time.

The latest installment comes in the form of blog from Cisco's legal counsel in reaction to a lawsuit from HP against one of its employees jumping to Cisco.

The unidentified employee (who AllThingsDigital suggests is former HP StorageWorks' chief technologist Paul Perez), who worked at Hewlett-Packard for more than two decades, left HP and moved to California, where he asked a court to rule HP's non-compete clause unenforceable in California. After a hearing was scheduled and Cisco's legal department reached out to HP's in, it said, an attempt to avoid legal action, the proverbial, um, spit hit the fan.

An attorney working for the employee in Texas spotted an HP filing online for a scheduled emergency hearing to block him from taking the job with Cisco. When the attorney showed up and told the Texas judge that a case already was underway in California, the judge tossed the case.

The judge in California, meanwhile, has since allowed the former HP employee to join Cisco.

In a blog post last week, Mark Chandler points out that the lawsuit against the HP employee was the third such action HP has taken in the past two years, attributing it to employees "seeking safe ground amidst the chaos of executive turnover," adding that "we can probably expect to see more desperate moves to lock up human capital."

Chandler questions the success of trying to retain employees through the threat of litigation, and tongue-in-check writes that HP could change it slogan from "HP Invent" to "HP Sue."

Chandler points out that "in Silicon Valley, human capital is as mobile as financial capital," and contends that the Valley's growth has been driven, in part, by the idea that employees are free "to find the best way to use their skills and advance their careers."

"Somehow, Bill Hewlett and Dave Packard didn't see a need to build a company based on suing people who might want to leave," he writes. "It's a sad day when great companies think they need to sue their own employees over and over again to stop them from bettering themselves in their chosen profession."

As Chandler points out, although some states will enforce non-compete clauses in employment contracts, companies don't have to pursue them unless they want to.

With both companies competing for a relatively limited pool of top execs, and, in a market that has become so competitive and profits slim as margins have tightened, it iss doubtful that the rivalry between the two will cool on any level.

In fact, with new CEO Meg Whitman being pushed to turn things around at HP yesterday (and with a board that has a notoriously itchy trigger finger when it comes to firing CEOs), the likelihood that there will be more pressure flowing downstream is likely to lead to more defections.

Chandler, meanwhile, writes that Cisco, regardless of where its employees live and work, will abide by California's rule in favor of employee mobility.

Cisco, he said, is putting up a challenge to HP and Whitman, noting that the new CEO has been "deeply steeped in Silicon Valley's environment of mobility and opportunity," to "support employee freedom and stop suing employees just for leaving."

Fewer lawsuits? In this environment? Good luck.--Jim

Huawei is taking a beating in the IP edge router market, losing double-digit share, new research shows. But they're not alone: Alcatel-Lucent (NYSE: ALU), Juniper Networks (Nasdaq: JNPR) and ZTE also saw their share of the market drop. The only winner among the top-five companies in the segment: Cisco (Nasdaq: CSCO).

Infonetics Research, in its Service Provider Router and Switches third quarter report last week said that Cisco bucked an industry trend in carrier router and switch revenue market share.

"Of the top five vendors, only Cisco increased its overall carrier router and switch revenue in the third quarter of 2011, up 3 percent from the previous quarter to $1.43 billion," said analyst Michael Howard. "Since Alcatel-Lucent, Huawei, Juniper and ZTE all saw double-digit percent declines in their carrier router and switch revenue in the same period. Cisco rises back up to over 40 percent market share for the first time this year."

Cisco made hay, Howard said, from its moves to refresh its Ethernet switch portfolio.

"In the critical IP Edge segment (edge routers and carrier Ethernet switches), which now makes up 79 percent of the carrier router and switch market, Cisco expanded its lead to 36.2 percent on the strength of its recently refreshed carrier Ethernet switch portfolio and its ASR 9000," Howard said. "Cisco's share gain is at the expense of its top competitors, particularly Huawei. With Huawei posting the largest sequential drop in IP edge market share in the third quarter of 2011, from 17.2 percent to 12.3 percent, Cisco's IP edge share now nearly triples Huawei's."

Infonetics also reports:

• The global service provider, router and switch market, which includes IP edge routers, IP core routers, and carrier Ethernet switches (CES), is down 7.1 percent sequentially to $3.5 billion, following a 14.3 percent increase to $3.8 billion the previous quarter;
• Year-over-year, the carrier router and switch market is up 4.5 percent;
• In the third quarter of 2011, the IP edge segment (IP edge routers and CES), is down 6.7 percent sequentially but up 4.3 percent from the year-ago third quarter
• Top vendors posted gains in the IP edge segment in the third quarter of 2011 over the previous quarter: Alaxala, Cisco, Ericsson, NEC, and Nokia Siemens
• Regionally, North America lead the downward trend in the third quarter of 2011, with the largest decline in carrier router and switch revenue (down 15 percent from last quarter), despite all the concerns about the Euro zone
• The EMEA and Asia-Pacific regions each posted 6 percent declines, while Central and Latin America (CALA) was the only region that posted an increase, which was led by Brazil

In the second quarter, meanwhile, Cisco saw its competitors, including Huawei, Alcatel-Lucent and others, gnaw away at its share. Infonetics said Huawei's IP edge revenue grew 66 percent, while Alcatel-Lucent's increased 22 percent. Infonetics said the end-to-end portfolios and mobile backhaul emphasis that some companies have may be helping them versus Cisco.

Infonetics said the total service provider router and switch market grew 14 percent sequentially to $3.8 billion worldwide during the second quarter. Year-over-year, the market's increased measured out at 19 percent. The IP edge portion of that market jumped 15 percent overall sequentially in the second quarter and 21 percent year-over-year.

For more:
- see this release
- see FierceTelecom's take

Related articles:
HP, Cisco battle prompts drop in Ethernet switch revenues
Infonetics: Competitors squeezing IP edge market share from Cisco
Q1 report: Cisco continues to lose switching share

Here's more research that says the videoconferencing market is booming. Frost and Sullivan reports the market grew nearly 20 percent in 2010 and raked in $225.6 million in revenue. It forecasts the market will keep up that pace and see a compound annual growth rate of 19 percent between 2010 and 2015, with revenues expected in the range of $538.2 million.

Interoperability issues and high costs continue to hamper its growth, said Frost & Sullivan's Melanie Turek in the soon-to-be-release report.

The complexity of delivering quality video is pushing large enterprises to opt for videoconferencing via a managed service offering--a trend that will help drive that segment to a CAGR of 20 percent and revenues of $374.1 million by 2015, up from $150.5 million in 2010. Telepresence will see its share of that segment grow to 44.3 percent in 2015 from 9.5 percent in 2010, the study said.

Medium-sized businesses will trend toward outsourcing videoconferencing system operations to service providers, focusing on their core competencies instead. A prime service provider customer will be SMBs looking to avoid the expensive buy-in to videoconferencing systems, helping hosted services grow to $164.1 million by 2015, a CAGR of 16.9 percent.

Containing expenses continues to be a driver for adoption of video conferencing, the study shows, citing Polycom (Nasdaq: PLCM) research that showed enterprises can save 30 percent on travel costs, lower time-to-market by 24 percent, reduce training costs by 25 percent, trim recruitment times by 19 percent and shrink sales-related costs by 24 percent by adopting videoconferencing.

The Frost & Sullivan report said Cisco (Nasdaq: CSCO) saw T&E savings of 14 to 20 percent for its European Services unit by embracing collaboration via videoconferencing and telepresence.

The report also says businesses have to cope with fewer transportation delays, less administrative time spent planning trips and a reduction in lost productivity during travel.

For more:
- see this article

Related articles:
Polycom takes another step to drive video-conferencing interoperability
Cisco launching 'people centric,' cloud-based initiatives for Jabber, WebEx
Ovum: Maturing telepresence technology to grow industry to $1.1B in 2016

Looking to take its popular WebEx and Jabber products beyond the desktop, Cisco today unveiled plans to make them more "people centric," by allowing users to collaborate anywhere, anytime and on any device or application.

The move recognizes that the "bring-your-own-device" phenomenon is here to stay, and Cisco is embracing it by offering a free basic version of WebEx.

"What is happening is that there is definitely a transition taking place from people thinking about collaboration as something they do on one single PC on their desktop at work, to a point of view where collaboration is more about ‘What do I do on multiple devices, particularly on mobile devices?'" Cisco's Michael Smith told FierceEnterpriseCommunications. "Our objective is to reach more people on more devices."

Cisco describes the latest iterations as "the next generation" of the software, and, with everything it has added, that may not be a reach.

WebEx, for example, has introduced "Meetings spaces," where users can access files and presentations stores in the cloud before a meeting from their PC or mobile device in real time at any time. They can check on colleagues' availability through presence and initiate synchronous conversations via IM to prepare, collaborate and follow up. They can also schedule meetings and share agendas, notes, action items, recordings and other relevant documents.

Users also can engage in two-way high-quality video meetings on mobile devices with new support for Cisco's Cius tablet, and Apple's iPhone on top of the currently supported iPad. VoIP is now also available on the iPhone and iPad.

Cisco has also taken a big step toward interoperability (of a sort), with its "one-button-to-push" technology; WebEx users can now easily connect into Cisco TelePresence meetings from the Cisco Cius and Apple mobile devices.

The free WebEx version, meanwhile, supports up to three meeting participants and provides users with VoIP audio, standard video, IM, presence, desktop sharing and 250 MB of storage.

Cisco is targeting a December launch for the beta version, with general availability planned for the first quarter of 2012. The Basic Edition should be available in the first quarter of 2012.

A new Jabber web plug-in, meanwhile, will enable companies and developers to embed Cisco UC capabilities in Web browsers on Internet-connected devices. That means users in a public cloud-based application can easily find co-workers using presence, communicate using IM and click-to-call or click-to-video to enable a rich, real-time collaboration experience.

Cisco also is launching a developer community. Within the Cisco Developer Network, developers with be able to find sample codes, instructional videos and an online community for asking technical questions and sharing best practices.

For more:
- see this release

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Cisco's solid 1Q results show it's on the comeback trail
Cisco earnings preview: Has its refocusing been sharp enough?
Cisco targets SMBs with new, reduced-price UC offerings
Cisco looks to connect, finally, with a low-cost video-conferencing play

Videoconferencing startup Vidyo, which has raised some $97 million in VC to date and is causing sector leaders Cisco (Nasdaq: CSCO) and Polycom (Nasdaq: PLCM) heartburn as it nips at their heels, has announced it's developed technology that allows it to offer videoconferencing using virtual servers, allowing its customers to scale without any capex.

Vidyo CEO Ofer Shapiro told FierceEnterpriseCommunications the new offering has been demoed on VMWare and Amazon servers, and that the quality has been "very good" with latency rates of 250 ms or less, comparable to hardware-based systems.

"This completely changes the videoconferencing landscape," he said. "Companies can now do in minutes, what it used to take months to achieve," in building out a telepresence initiative. "This technology is a breakthrough in the way that it changes the cost structure of the space. It's literally a democratization of videoconferencing technology." Shapiro said the demonstration delivered an HD video conference on more than 100 concurrent lines; virtualization in the video conferencing market has been limited to call control previously. The product is expected to roll out in 2012, he said.

Shapiro said the technology would allow service providers to offer unlimited videoconferencing multipoint scalability on demand to accelerate the adoption of high quality, universal video conferencing on any endpoint. "We think service providers will be excited to hear this message," he said. "There's no capex for them to expand into new markets, and the opex is also lower for them."

Shapiro said Vidyo has achieved strong traction with service providers, and that the company is seeing lower competitive losses as it's become more well known. Vidyo is white-labeled by a number of providers in broad applications, including Google+, and in agreements with Hitachi and Ricoh, among many others. "More companies are realizing that this is the architecture to choose," he said. "The opex and capex costs are significantly lower than our competitors and the quality is very good.

"At this point," he said, "the rocket science is over... now it all linear work."

ZK Research analyst Zeus Kerravala said Vidyo is the first company to demonstrate the impact of virtualized video conferencing in terms of scalability and economics on the most expensive part of the network infrastructure. "There is no longer a reason for video conferencing to be a hardware investment," Kerravala said. "Customers need to select a software-based architecture today that can address tomorrow's future growth needs."

For more:
- see this release

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Video-conferencing startup Vidyo lands $22.5M in new funding
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Cisco (Nasdaq: CSCO) continued on its comeback trail in its first quarter, turning in its second consecutive quarter of solid financials and beating Wall Street's expectations again.

The networking giant, which had been in a veritable tailspin of late as it lost marketshare to competitors and, according to many, lost its focus, Wednesday reported non-GAAP EPS of 43 cents for the quarter, beating analyst expectations of 39 cents. Earnings for the quarter were, as expected, down 7 percent from a year ago, but showed enough promise to boost share prices about 4 percent in after-hours trading. Cisco's revenue of $11.26 billion for the quarter also beat estimates of $11.02 billion.

The company said that, despite an economy that remains uncertain, government and enterprise demand for its gear remained robust, leading it to forecast that it would see a 7 or 8 percent rise in revenue in the second quarter, roughly $11.13 billion, with EPS of 42 to 44 cents, above analyst predictions.

"We delivered a solid quarter," said John Chambers, Cisco's chairman and CEO, in a statement. "We've completed the majority of our restructuring and have organized Cisco to successfully execute against our strategy of providing intelligent networks, architectures and integrated products that solve customers' business problems. Even in times of limited capital spending, intelligent networks are being deployed to drive new business, revenue and consumption models, enable new customer and employee experiences, and drive efficiencies."

During the company's earnings call, Chambers, nonetheless, reiterated the cautious advice about the world's economy that he gave at the end of the fourth quarter: "We see the uncertainties in the global markets over the last several quarters, and even today, it is too early to determine the effect on capital spending in calendar year 2012. Therefore, we would expect you to be conservative on our expectations for Q3 and Q4, and even expectations in Q2."

Chambers, though, said Cisco was beginning to see solid evidence that its restructuring efforts last year--it killed underperforming business segments, cut its workforce and, overall, dropped expenses some $1 billion--are beginning to pay off.

"We are beginning to see how the restructuring and organizational changes benefited not only our shareholders, but also our customers," he said. "We are, in our opinion, in the sweet spot of what our customers are focused on, whether it is in cost reductions, productivity, business transformation or revenue growth."

Cisco also continued to sit on a pile of cash... it said it had some $44.4 billion on hand.

Analysts, by and large, said Cisco's progress has been "solid," and said they expected the company to continue to improve.

"The company has been in recovery mode and reorganization mode and they executed well through that transition," IDC analyst Crawford Del Prete said.

BGC analyst Colin Gillis said the company's results involved "no fireworks," adding, "The company drove its turnaround very quickly."

For more:
- see this Reuters article
- see this earnings call transcript
- see this earnings release
- see this MarketWatch article

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Cisco targets SMBs with new, reduced-price UC offerings
Cisco looks to connect, finally, with a low-cost video-conferencing play
Avaya gaining share on Cisco in telephony equipment segment
Cisco launches SMB video-conferencing push with $99 service, new endpoints
AT&T offers wireless U-verse TV with Cisco solution

With SMBs expected to increase wireline spending to some $16 billion by 2016, the market is generating unsurprising interest among vendors. Cisco (Nasdaq: CSCO) is announcing a plethora of enhancements to a variety of offerings it says are aimed at helping SMBs modernize their communications, especially as the vast majority rely on legacy time-division multiplexing (TDM) systems, with an average age of over 15 years.

Cisco, which earlier this month announced a $99 video conferencing play, has now rolled out an affordable series of products giving midsize businesses enterprise-grade IP phone systems with integrated collaboration capabilities.

The company said its Cisco Business Edition 3000 (which targets companies for 75 to 200 users) and the Cisco Business Edition 6000 (for companies of 150 to 750 workers) give midsize customers affordable access to collaboration offerings ranging from rich video to instant messaging. Customers can get the 3000 for $100 per user on a 100-user platform, and the 6000 for $158 per user on a 225-person platform.

For more:
- see this release

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In-Stat forecasts SMB wireline spending at $16B by 2015

Baseball pitcher Satchel Paige once said "Don't look back, something might be gaining on you."

This week's announcement from Cisco (Nasdaq: CSCO) that it was introducing a $99-a-month video conferencing service, Cisco TelePresence Callway, aimed at the SMB market is a pretty good indication that the networking giant and leader in the video conferencing space didn't take Satchel's sage advice. And that may be a good thing.

Cisco said the hosted service reduces the complexity and costs of TelePresence that slowed adoption by SMBs. Cisco also introduced Jabber Video, a standards-based, HD video-calling software application that lets Mac and PC users join a conference hosted by a TelePresence user. The free application will go into beta in 2012.

There's no question Cisco, which introduced its benchmark room-based TelePresence system five years ago isn't at risk of being overtaken by any of its competitors and time soon; it does, after all, have a market share that exceeds 50 percent.

The reality may be more along the lines that Cisco recognized the danger that all of its competition was nibbling at its lead; call it the Grand Canyon effect... a little bit of water over a long period of time can create a pretty big hole.

Infonetics Research earlier this month said revenues from enterprise telepresence and video conferencing systems were way up in the first half of this year, 24 percent above a year ago. The global video conferencing and telepresence equipment market set a record for quarterly revenue in the second quarter, increasing 21 percent from the previous quarter to $683 million, and increasing year-over-year 34 percent. Infonetics predicted an increase for the entire year that would be in the "strong double digits."

The enterprise segment has long been a target of the biggest video conferencing vendors, and projections have long said there was big money to be made in the segment.

But SMBs and smaller enterprise customers have begun to look more appealing to the segment, especially as travel costs continue to be a bugaboo, and companies look to contain costs in the economy of what feels like a perpetual (perceptual?) recession.

Infonetics says the market should see double-digit growth through 2015, "thanks to demographic and communication trends favoring video, increasing acceptance of video among users, and specific use cases like telelearning and telemedicine."

The past couple of months have seen a markedly different picture of video conferencing emerging.

Polycom (Nasdaq: PLCM), Radvision (Nasdaq: RVSN) and startup Vidyo all have introduced new mobile clients, aimed especially at tablets and at a workforce that's spending more time than ever away from the office. And, nearly every other vendor has introduced some low-cost iteration of their video conferencing product aimed at expanding down market.

Cisco was taken to task earlier this year for a lack of innovation. And CEO John Chambers spent two quarters trying to reshape the company (and perhaps trying to reignite that innovation spark). Callway may not be Cisco's biggest innovative leap, but at least it looks like it wants to get back in the game.-Jim

Five years after rolling out its high-end TelePresence room-based videoconferencing system, Cisco (Nasdaq: CSCO) is taking it to the masses, reacting to pressure from startups and long-time competitors to introduce a down-market, affordable solution.

Cisco TelePresence MX300 is a multi-purpose, room-based TelePresence system.

Cisco today rolled out its TelePresence for small and medium businesses, which allows customers to buy or lease select multipurpose and personal endpoints and connect those endpoints to a hosted service called Cisco TelePresence Callway, a Cisco Collaboration Cloud service that starts at $99 a month. Cisco said the hosted service reduces the complexity and costs with TelePresence that have slowed adoption by SMBs.

Callway is managed by Cisco and sold through Cisco partners. The service includes unlimited calls to any TelePresence endpoint, as well as to any standards-based video device from third parties over the Internet. Multi-party bridging capabilities for up to 12 participants are also available. Callway is commercially available in the United States.

The company also introduced Jabber Video, a standards-based, HD video-calling software application that lets Mac and PC users join a conference hosted by a TelePresence user. The free application will go into beta in 2012, Cisco said.

The application works like most other cloud extensions, giving invitees a link to click to download the client and to join a meeting.

Cisco has been a long-time coming to the table with a more affordable solution for the telepresence market--a market that it dominates, but also a market that has seen new competition begin to push it from behind. Polycom recently rolled out new products aimed down market, and startup Vidyo offers a product line that's not only inexpensive, but more easily scalable and which also offers HD.

"Now that we've reached our five-year milestone with Cisco TelePresence, it's time to talk about where our vision will take us from here," wrote Cisco's Marthin DeBeer in a blog post. "Our plan is simple: We are committed to making Cisco TelePresence accessible to everyone, everywhere."

The company also introduced a pair of endpoints, the MX3000, which is aimed at SMBs  and includes a 55-inch screen, and a 1080p, 30fps capability for true HD conferencing. The $27,600 model is set for release in January.

The other endpoint announced is aimed at the burgeoning telehealth market. The VX Clinical Assistant carries a $29,500 price tag and is targeted to launch in the first quarter of 2012 in the U.S. and Europe.

For more:
- see this release

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OVCC champions video-conferencing adoption, interoperability; but where are Cisco and Vidyo?
The changing face of videoconferencing: It's getting cheaper and better
Video-conferencing's new popularity driven by mobile, consumerization

Enterprise telepresence and video conferencing revenues soared in the first six months of 2011, new research said, as more users have grown comfortable with the technology and are more rapidly adopting it. Key drivers for the next four years also include telemedicine and telelearning applications.

Click here to see a larger version of this chart from Infonetics Research.

Infonetics Reseach said the global enterprise video conferencing and telepresence equipment market set a record for quarterly revenue in the second quarter, increasing 21 percent from the previous quarter to $683 million, and increasing year-over-year 34 percent.

"For the first 6 months of 2011, enterprise telepresence and video conferencing equipment revenue is up 24 percent year-over-year, and we expect strong double-digit growth in 2011 over 2010," said Matthias Machowinski, directing analyst for enterprise networks and video at Infonetics. "Growth will stay in double-digit territory through at least 2015, thanks to demographic and communication trends favoring video, increasing acceptance of video among users, and specific use cases like telelearning and telemedicine."

While there are increasing numbers of vendors vying for business, Cisco (Nasdaq: CSCO) remains the largest, seeing sequential growth in video conferencing and telepresence system revenue 33 percent; it holds more than half the global market share over competitors Polycom (Nasdaq: PLCM), Radvision (Nasdaq: RVSN) and startup Vidyo.

Demand for video conferencing equipment is highest in North America, China, India, and Brazil.

For more:
- see this release

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Videoconferencing and video calling is becoming popular enough to have prompted service providers and equipment manufacturers to launch a new organization to help accelerate its adoption.

The Open Visual Communications Consortium (OVCC), which actually was created in June, held its coming out party today at CTIA in San Diego. It includes many of the industry's largest players--AT&T (NYSE: T), BCS Global, Bharti Airtel, BT Conferencing, Dialogic, Orange Business Services, Polycom (Nasdaq: PLCM), Teliris, Telstra and Verizon (NYSE: VZ)--and says its looking for more partners to come on board (it has a three-tiered membership program).

Originally spearheaded by Polycom, the OVCC has been a while coming; but it arrives just as the videoconferencing industry looks like it really set to take off.

A true industry standards body could help push the uptake of video adoption even more quickly, especially as it states as one of its main concerns the interoperability issues that keep systems from communicating across service-provider borders.

"The formal launch of OVCC will help drive greater value for customers and spur broader video adoption," said Rich Costello, senior research analyst of unified communications for IDC. "True B-to-B interoperability requires exactly this type of service provider interconnectivity as the need for intercompany UC federation, of which video and telepresence are critical components, continues to grow."

OVCC said it will specify standards, best practices and connectivity agreements, and it said that service providers would be able to deliver a consistent business-to-business video experience that enables enterprise users to place and receive video calls beyond corporate firewalls and across proprietary video platforms as early as mid-2012.

The OVCC said its members will collaborate in the effort, encompassing both standards-based and proprietary video systems.

According to the OVCC, service providers will develop a Technical Specification Document based on industry standards, best practices and business approaches to answer the need for interconnection, addressing, signaling, interoperability and service coordination.

It said interoperable, high-quality connectivity across networks and devices should allow network providers to profitably and predictably monetize their inter-enterprise video exchanges.

"OVCC is the only organization of its kind addressing the requirements of enabling ubiquitous video calls by truly bridging the islands of communications users have today between enterprise, mobile and consumer applications," said Andrew McFadzen, OVCC president.

Telepresence and videoconferencing adoption have long been hamstrung by "islands" of technology. And, while OVCC looks like it's looking to overcome those walls, it's interesting to note that one of the segment's biggest and most-established players, Cisco (Nasdaq: CSCO), isn't on the group's roster. Neither is upstart Vidyo, which has stirred up the space since launching its own technology sans MCUs.

If OCVV really is to succeed, it's going to need to add those big names--and many more--to its lineup.--Jim

Despite growing demand for Ethernet switches, vendors are cutting their prices, primarily because of competition between Cisco (Nasdaq: CSCO) and HP (NYSE: HPQ), according to new research.

The second quarter saw the market rebound from the 1Q11, with Ethernet switch sales of $4.4 billion worldwide, an increase of 6 percent, said Infonetics Research. Nevertheless, on a year-to-year basis, revenues were down some 3 percent.

Not surprisingly, Cisco's share of the market continues to slip. The market leader saw steady revenue from 1Q11 to 2Q11, but lost 3 points from a year ago. HP, meanwhile, increased its share of the market by 2 percent. Juniper Networks (NYSE: JNPR), Enterasys, and Extreme outpaced the overall Ethernet switch market with double-digit revenue growth and small gains in revenue share this quarter

Cisco lost share in the Ethernet switching market to HP and Juniper Networks in the first quarter of the year as well, a quarter that saw the entire segment sag some 8.8 percent from a year ago.

Infonetics said that the third quarter should see buyers getting good deals on Ethernet switches.

"Ethernet switch buyers are in the driver's seat right now, as vendors are fiercely competing for their business," said Matthias Machowinski, directing analyst for enterprise networks and video at Infonetics Research. "While the battle is mostly playing out between Cisco and HP, other vendors are caught in the crossfire, with declining ASPs being one side effect. In the switch market, we expect this to result in stagnating revenue despite robust demand in 2011."

Infonetics said Ethernet switch port shipments in virtually every major region are up both sequentially (8 percent) and year-over-year (11 percent) in the second quarter, reflecting average selling price declines due to heavy competition, but also indicating widespread demand. The biggest gain was in the 10G segment, which bumped 19 percent quarter-over-quarter and 58 percent year-over-year.

The report from Infonetics also said enterprise router sales were up sequentially (6 percent) in 2Q11, to $843 million worldwide, while unit shipments grew 11 percent. The retail vertical drove sales in North America.

OneAccess saw the highest sequential increases in global enterprise router revenue in 2Q11 (40 percent), followed by HP (26 percent), Juniper (14 percent) and Cisco (3 percent).

For more:
- see this release

Related articles:
Cisco continues to lose switching share
Infonetics: Competitors squeezing IP edge market share from Cisco

The networking gear market has slowed, so it should come as no surprise that the PBX market in the second quarter of 2011 also was off pace. The good news, for Cisco (Nasdaq: CSCO) aficionados anyway, is that the San Jose company has retained its position as the leading supplier in the segment, increasing its share from 12 percent to 15 percent. Article

Ah, the joy of a good brawl between two heavyweights. While the latest tiff between Cisco (Nasdaq: CSCO) and Juniper Networks (NYSE: JNPR), doesn't exactly carry the panache of Ali and Frazier's "Thrilla in Manila," [or the animus of the very dysfunctional relationship Cisco has with Hewlett-Packard (NYSE: HPQ)] it nevertheless portends more toe-to-toe battles as the struggle for networking-gear dominance heats up--especially as the market for gear seems to become a little less free spending.

A touch history of the less-than-amicable relationship between the three leaders in the network gear segment:

Back in May, Hewlett-Packard very publicly got after Cisco at Interop, deriding what it saw as a lack of innovation and criticizing its network business.

Cisco, at the time, quietly absorbed the ridicule, perhaps, in part, because its stock was spiraling downward. CEO John Chambers was in the process of changing the company's focus from the inside out, shedding under-performing products and divisions, planning a major cut in the company's workforce, realigning executive responsibilities and, generally, trying to get the company refocused on its core business--which, with its stick seemingly setting new 52-week lows daily, was a more urgent task.

After a "not bad" fourth quarter earnings call, during which Chambers focused on the "next Cisco," the stock has slowly begun recouping some it its losses.

HP meanwhile, suddenly has its own problems. Videoconferencing startup Vidyo in August grabbed a couple of HP execs, and, just last week, the Wall Street Journal reported that HP's decision to dump its PC and tablet businesses had customers worried that the company was "lost right now." More importantly, the perception was costing HP some business, as customers were taking a wait-and-see attitude to predict where the company was headed.

Juniper Networks, which regularly had been mentioned as having taken market share from Cisco with products that were less expensive--although it had done so with less hype than Hewlett-Packard-had a miserable quarter, too. After releasing data, it saw its market cap tumble 20 percent, or $3.3 billion. Piper Jaffrey analyst Troy Jensen said he believed Juniper "could likely hit a several-quarter air pocket."

Today, The Wall Street Journal reports that Cisco has been stirring the pot with Juniper, making public statements about the company missing delivey deadlines on several products, and that's not the norm for Cisco, which generally has built its business quietly without a lot of drama.

But, it's funny what happens to a business when it starts to slip a bit.

Just like aging actors in Hollywood who disappear for a little plastic surgery and resurface with a new project or, better yet, a little scandal, it does wonders for their careers.

Cisco's relatively minor plastic surgery came in the form of dumping its Flip video camera business, selling off a factory in Mexico and a 10 percent cut in workforce.

Perhaps its increasingly public dust up with Juniper will serve as its scandal, it's certainly a change of form for the normally milquetoast company.

Hopefully, it will be enough to get its career, er, business back on track.--Jim

Hewlett-Packard's (NYSE: HPQ) decision last month to spin off its PC business and give up its tablet business has had unintended consequences: some long-term customers are concerned the company "is lost right now" and are putting some big buying decisions on hold until its new strategic plans gel.

"I've put all that on hold," Fluor Corp. (NYSE: FLR) CIO Ray Barnard told the The Wall Street Journal, in response to the company's plans to buy computers and tablets from the company.

He's not alone. Other customers are worried the company simply has not decided on a clear direction for its business, the same criticism Cisco (Nasdaq: CSCO) faced before CEO John Chambers began aggressively cutting expenses and underperforming businesses and product earlier this year.

"This appears to just come out of the blue without a really good explanation," said Frank Cervone, vice chancellor for information services at Purdue University Calumet in Hammond, Ind. "It makes you wonder what the strategy really is and where they are going."

But, unlike Cisco, which aggressively streamlined its business by killing its Flip video camera business, selling off a set-top box manufacturing facility in Mexico and cutting thousands of jobs, HP also announced the purchase of U.K. software company Autonotmy for $10.2 billion, befuddling Wall Street and many customers.

"It would be hard for me to think that innovation in the PC is over," Darren Dworkin, CIO at Cedars Sinai Health System in Los Angeles told the WSJ, comparing HP's move to General Electric Co. getting out of light bulbs.

While the move might make business sense, Dworkin said he remains disappointed in the direction the company has decided to take.

In June, the company sold its visual collaboration business to Polycom for $89 million, including its Halo products and managed services business.

For more:
- see this WSJ article

Related articles:
HP facing a tough earnings test today
Polycom's buy of HP's visual comms business points to Cisco's strength in telepresence
Polycom gets HP visual collaboration business for $89M, as Hewlett-Packard changes direction

Cloud-based videoconferencing service provider Glowpoint has announced enhancements to its managed video services offering for users of Cisco Systems (Nasdaq: CSCO) telepresence equipment.

Among the new capabilities is a hosted Cisco telepresence infrastructure, including the Cisco TelePresence Video Communications Server (VCS), Video Communications Expressway, TelePresence Server MSE 8710 and Cisco TelePresence Movi for mobile telepresence.

The hosted infrastructure offering gives Cisco TelePresence a more affordable and flexible way to expand video coverage to remote office and home office workers, rather than purchasing and installing new hardware for multiple locations.

Glowpoint also is supporting interoperability through the Telepresence Interoperability Protocol and enabling a managed unified communications gateway based on the Cisco VCS.

The interoperability move is a response to what Glowpoint described as rapidly growing usage of immersive telepresence systems among existing customers, with more than 48,000 hours of meetings taking place on these systems in the first half of 2011, an increase of more than 100 percent over the same period in 2010. That volume and frequency of usage means that it is time for interoperability between the systems of different vendors, Glowpoint said. Hence, the adoption of the Telepresence Interoperability Protocol and support for Cisco's own ActivePresence multi-vendor call set-up capability.

The unified communications gateway links telepresence systems with unified communications applications from Cisco, Avaya, Microsoft (Nasdaq: MSFT) and others. A Microsoft Lync user, for example, would be able to collaborate va a Cisco VCS with users of any standards-based telepresence or video conferencing systems.

For more:
- see this Glowpoint release

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The cloud videoconferencing market is simmering
Telepresence interoperability is becoming important

Cisco Systems (Nasdaq: CSCO), one of many companies announcing new cloud-related efforts at VMworld in San Francisco this week. One of the company's new projects was hailed as a "LAN for the clouds," a virtual LAN (VLAN) aimed at cloud computing environments and based on the Virtual Extensible LAN standard (VXLAN).

VLAN technology has been around for many years, but now, we are starting to see VLAN principles applied to a larger environment. A VXLAN can support many millions more interfaces than a traditional VLAN, up to 16 million, according to Cisco comments in a Network Computing story. It can span public and private cloud networks, improving performance and reliability of cloud connections between data centers, essentially giving packets Layer 3 encapsulation over a Layer 2 network connection. The other option some companies have is to actually extend traditional VLANs over Layer 2 networks, but problems can arise with this solution.

Cisco was heavily involved in drafting the VXLAN standard, which still needs to be approved by the Internet Engineering Task Force, but has received support from VMware and many other companies.

For more:
- check out this Network Computing article

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Interest in using videoconferencing platforms undoubtedly had been on the rise in recent years as corporate enterprises have been forced to look at ways to cut travel costs for purely economic reasons, as well as reduce their carbon footprints.

Heavy interest may not always translate to heavy usage though, and the high price of some videoconferencing systems, particularly the high-end telepresence systems, may still be keeping many companies on the sidelines.

At least one analyst, Robert Poe, principal analyst with VoIP Evolution, is cautiously predicting that the market could be ready to explode on greater acceptance of the technology by small and medium-sized businesses.

Light Reading notes that Poe said a major factor in the possible market shift could be increasing availability of cloud-based videoconferencing platforms from companies like Blue Jeans, among others. (Poe's report on the potential shift is titled, "SMB Video Conferencing: Getting Beyond Clouds & Interoperability.")

It will be interesting to see if vendors of the high-end telepresence systems can adapt their offerings to be more economically attractive to smaller customers. Cisco Systems (Nasdaq:CSCO) has already taken a shot at the residential market, which would seem to indicate that small businesses are within reach. Meanwhile, Vidyo offers a telepresence system that does not require dedicated bandwidth to function, thus lowering the price.

For more:
-see this Light Reading report

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Polycom just landed a major telepresence deal with Merck
Ovum sees videoconferencing as a $3.8 billion business by 2016

Cisco (Nasdaq: CSCO) is dropping the price on its popular Web conferencing product, WebEx, offering unlimited meetings for $19 a month, more than 60 percent off the normal $49 a month for the SaaS product.

The discount does limit, however, the number of attendees to one host and seven guests; the full-priced WebEx package allows up to 25 attendees.

Cisco, in a blog post, said the new offering was aimed at off-site workers, freelancers, home businesses and startups.

The latest iteration, WebEx 8, includes unlimited meetings, desktop sharing, optional videoconferencing with support for multiple webcams and active speaker switching, the ability to record meeting and integrated Outlook scheduling.

WebEx 8 also works on smartphones, including Research in Motion's BlackBerry and Apple's (Nasdaq: AAPL) iPhone, as well as on the iPad and other wireless or 3G mobile devices.

The limited service is currently available in the U.S. only and must be ordered online.

The web collaboration space is becoming increasingly crowded, with vendors like Cisco, Citrix (Nasdaq: CTXS) and more offering an increasing number of features for free or at a reduced price.

Citrix, for example, earlier this month added free HD video conferencing to its web collaboration software as well.

For more:
- see this blog post

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Video-conferencing: A revolution on the verge of discovery
Citrix launches GoToMeeting with no-charge HD videoconference add-on
Skype and Citrix team to add GoToMeeting to Skype for Business

Networking giant Cisco (Nasdaq: CSCO) beat analyst estimates on profit in the fourth quarter, despite seeing net income plunge from a year ago, but the combination was enough to send traders out looking for shares, driving prices up above $15.44 in after hours trading. The stock had closed at $13.73 on Nasdaq.

Cisco said it earned 40 cents a share in the fourth quarter, better than the 38 cents analysts had expected, despite the 36 percent dip in net income. Sales came in at $11.2 million, beating analyst expectations of $11 million.

In May, after it became obvious that Cisco was losing shares to competitors like Juniper Networks and HP, and that some customer segments were spending less on technology, Cisco CEO John Chambers vowed to rein in spending by as much as $1 billion, to get it more in line with expected revenue.

That cost cutting has been well received by analysts.

"You've got good cost controls on the earnings," said Colin Gillis, an analyst at BGC Partners in New York. "It's a company that's going to be driving earnings twice as fast as revenue."

Chambers said this quarter should see revenue growth between one percent and four percent, below last year's first quarter growth of 27 percent. Even with the modest growth forecast, Chambers sounded a note of caution: "We all see the uncertainty in the global markets. It is too early to determine the effects on capital spending," he said, adding the company would "be conservative on our expectations."

For more:
-see this WSJ report
- see this release

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Cisco (Nasdaq: CSCO) is set to release its fourth quarter and year-end earnings after the bell on Thursday, and it's likely to be a test for even the stoutest Cisco supporters to continue to stand by the company. Cisco's stock continues to trade below $14.50 and set a new 52-week low at $14.27 as of this morning (of course, over the past week almost all of the tech sector--including competitors Juniper Networks (Nasdaq: JNPR), HP (NYSE: HPQ) and Alcatel-Lucent (NYSE: ALU)--have taken its lumps).

The company has seen its stock tumble from a 52-week peak of $24.87, and analysts are worried the fall could continue, even with decent earnings.

Analysts are predicting a broad range of EPS, from 31 cents to 42 cents, with a consensus of 38 cents for the quarter on sales of $11 billion; the rub, of course, is that 38 cents is 4 cents off the EPS of a year ago. For the year, analysts see $1.60 EPS.

The expectation is that results will be in line with the guidance the company provided, which has been weak.

"While the stock is cheap, it's very early days in the company's restructuring efforts--the company hasn't yet addressed much the restructuring that's necessary in our view," said George Notter of Jefferies & Co. "We expect that there's significant inertia in the business and believe the outlook for the business can still get worse."

In a research note this morning, Jeffries said it expects Cisco's enterprise business to be "decent," and estimated it should make up 60 percent of Cisco's sales for the year.

CEO John Chambers will likely spend a great deal of time on the company's earnings call talking about how it plans to shed $1 billion in expenses over the next year, cuts he promised in May in an effort to bring them in line with revenues.

But he's likely to be pushed, as well, on sales and how the networking giant will cope with increasing competition and price cuts in its core switching gear market, which is, in the eyes of some analysts, in the process of commoditizing.

Last week, Citigroup John Slack warned that Cisco, as it struggles to stop the bleeding, could become "a perpetual restructuring megacap tech story." Adding that until its strategy grows clearer, the stock doesn't work.

For more:
- see this Barron's article
- see this Seeking Alpha article
- see this Benzinga article

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Cisco to represent Openet's product suite globally
Trouble on the horizon for networking companies? Or, is it already here?
Alcatel-Lucent struggles continue as it misses Q2 revenue goals
Cisco sells STB plant in Mexico, reaffirms commitment to Videoscape
Cisco announces plans to trim workforce by 11,500, or 16%

Telepresense vendor Radvision (Nasdaq: RVSN), which last month revised its second-quarter guidance downward, this week reported revenues of $18.1 million for the quarter, down from $23.3 million a year ago, blaming the downturn on its difficulty in establishing a foothold for its video business unit in North America.

The company also reported a net loss of $8.2 million, or 44 cents per diluted share, on a GAAP basis, a leap from its net loss of $700,000, or 4 cents per diluted share, a year ago.

The company's revised forecast for the second quarter of 2011 was for revenues of approximately $18 million to $18.5 million and a net loss of 41 cents to 44 cents per diluted share on a GAAP basis.

"Second quarter results were in line with our revised forecast, but not on-track with our original plan, mainly due to the performance of our VBU in North America, as previously reported," said Chief Executive Boaz Raviv. "We are moving immediately to remedy that and are committed to realizing tangible improvement as quickly as possible."

Raviv said Radvision's VBU saw strong year-over-year growth in EMEA, CALA and APAC, as well as a 35 percent increase in our core, non-OEM revenues compared with the second quarter last year.

"To further accelerate our growth in the endpoint market, we recently expanded our end-to-end portfolio," he said. "Our second quarter also benefitted from very strong sales to service providers for cloud-based services and further successful expansion of our reseller channel. We will not be satisfied, however, until we are back on track with our growth plan."

The company's revenue was hit hard when Cisco bought Tandberg. Before the Tandberg acquisition, Cisco resold Radvision conferencing systems; that part of the business made up about 40 percent of Radvision's revenues.

The company said it expects revenue in the third quarter to fall to $19 million with a net loss of approximately $5.9 million, or 32 cents per diluted share, on a GAAP basis, and $5 million, or 27 cents per diluted share, on a non-GAAP basis. In the year-ago third quarter, the company had revenue of $24.5 million and net income of $300,000, or 2 cents per diluted share.

For more:
- see this release

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