Competing and Interoperating the Microsoft-Cisco Way

Microsoft and Cisco have promised their products were compatible with each other, even as the two tech giants remain competitors in the market. This unusual statement came about in an unusual setting – a joint appearance by the CEOs of the two companies in New York City – Steve Ballmer of Microsoft and John Chambers of Cisco.

The two CEOs showing up together was a sign of the increasing dependencies between the two companies. However, they stressed this joint appearance should not be taken as a prelude to a merger between the two.

Joking in response to questions by TV host Charlie Rose, Ballmer said, “John agreed: I can't be his boss, and I'm not going to work for John, today.”

While the two companies started off in different domains, expansion plans of the two have meant increasingly frequent face-offs. Microsoft's initial specialization was desktop software, while Cisco came in with network infrastructure.

Chambers said the increasing interdependency between the two companies was based on customer need. While being competitors, they also realized customers were keen that they should be able to use both companies’ products in tandem. The key was interoperability, he said.

During the event, the two CEOs set out areas where the two giants would be working in collaboration. These areas include wireless communications, security, consumer entertainment, business software, and unified communications.

During the event, Ballmer also talked about other speculations regarding Microsoft during the course of the event. He said Microsoft would not be bidding for space on the wireless spectrum because Google was doing it. He said Microsoft was not looking to metamorphose into a telecom company.

Microsoft would compete with Google in other ways, Ballmer said. However, he made no comment when asked about previous discussions between Microsoft and Yahoo about merging. All he said was that acquiring Yahoo would be a really expensive proposition for whoever was planning to do it.

Analysts and researchers are already talking about the decision of the two companies to co-operate where possible. Dwight Davis, Vice-President, Ovum Summit, a research outfit, said the joint appearance is to prevent confusion among customers about the two companies.