Back in March, Cisco (Nasdaq: CSCO) shelled out $3.2 billion for WebEx, a leading provider of Web-based conferencing solutions. Then, a month later, Google (Nasdaq: GOOG) purchased Marratech, another company in the space. Not to be outdone, IBM (NYSE: IBM) has jumped into the fray, agreeing last week to purchase WebDialogs for an undisclosed amount.
Founded in the late 1990s, WebDialogs has developed a suite of voice and video conferencing solutions. The customer focus is primarily on small- to medium-sized businesses, and the delivery method is via the Internet. The company has roughly 500,000 users, although there was no disclosure on its revenue.
Then again, IBM is probably more interested in WebDialog's technology platform, which is quite versatile. For example, there is integration with a myriad of systems, such as those from Salesforce.com (NYSE: CRM), AT&T (NYSE: T), and Sprint (NYSE: S). There is even a plug-in for eBay 's (Nasdaq: EBAY) Skype to launch free conference calls.
WebDialogs will fold into IBM's Lotus Division. As a result, it will be integrated with the Notes platform, which has more than 130 million licenses across the globe.
Despite the recent consolidation, the Web conferencing market is crowded. Some of the other major players include Adobe (Nasdaq: ADBE), Citrix (Nasdaq: CTXS), and Microsoft (Nasdaq: MSFT).
With so many options in the marketplace, we may see price erosion. In fact, I think Google could be a big threat, because it can leverage its massive user footprint and advertising business. Then again, for serious business software operators, conferencing offerings are becoming a "must have" capability -- and now IBM can say it's a player in the heated space.
© 2007 Universal Press Syndicate
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