Big Blue Buys Web Conferencing Firm

[Sunite]

Big Blue Buys Web Conferencing Firm
By Jennifer LeClaire
August 24, 2007 10:42AM

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IBM has been missing from the top three Web conferenceing players, and now, with the acquisition of WebDialogs, might be trying to ward off Microsoft in the unified communications space, according to analyst Zeus Kerravala. He said he sees IBM's acquisition of WebDialogs as less about Cisco and more about competing with Microsoft.

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   On Wednesday, IBM made an announcement that got the tech world talking about Web conferencing again. Big Blue bought WebDialogs, a Web conferencing and communications services vendor that boasts more than 500,000 users worldwide.

WebDialogs offers online meeting and collaboration services that, as its name suggests, combine Web and audio conferencing into one experience. It is deployed as a service rather than a product that has to be installed on the corporate server.

The WebDialogs acquisition expands IBM's offerings in the Web conferencing space, particularly for the small and midsize business (SMB Relevant Products/Services) segment, and departments within larger organizations.

IBM will integrate the WebDialogs Unyte service with its collaboration portfolio, including IBM Lotus Notes and IBM Lotus Sametime software. The acquisition adds a missing software-as-a-service element to the Lotus Sametime family.

A Growing Market

Michael Rhodin, general manager, IBM Lotus Software, said the acquisition of WebDialogs allows the company to reach the growing segment of the market that prefers to buy Web conferencing as a service. "We are aggressively pursuing new market opportunities across the board," Rhodin said in a statement.

That growing market opportunity also enticed Cisco Systems and Google. Cisco bought WebEx for $2.9 billion earlier this year. Google snapped up Web conferencing technology owned by Marratech. WebEx leads the market, followed by Microsoft Relevant Products/Services with its LiveMeeting service. Citrix Online ranks third.

IBM is missing from the top three, and might be trying to ward off Microsoft in the unified communications space, according to Yankee Group analyst Zeus Kerravala. He said he sees the Big Blue acquisition as less about competing with Cisco and more about competing with Microsoft.

"Microsoft is targeting IBM's Lotus customer base," Kerravala said. "He who wins the presence war actually winds up winning this overall market. This is a way for IBM to swing back at Microsoft. It's about time IBM got this piece of the puzzle. If you are a vendor in the unified communications space, it's becoming pretty clear that you need some sort of online delivery mechanism."

Converging Data

Beyond the big name vendors, there are dozens of smaller, independent players vying for market share in what Wainhouse Research pegs as a high-growth market. Wainhouse predicts the Web conferencing market will grow from $750 million in 2006 to more than $1 billion by 2010. Analysts expect to see continued consolidation Relevant Products/Services in this market.

For IBM's part, the company said it will add value to its offering through application programming interfaces (APIs) that will enable business partners to customize, brand, and integrate the service into applications, products, and other services. The APIs are made possible by the WebDialogs acquisition.

"To remain competitive, businesses are converging voice, video, and data systems into one unified communications and collaboration solution that instantly connects employees to the information and resources they need," Lou Guercia, CEO WebDialogs, said in a statement.

WebDialogs will become part of the Lotus unit of IBM Software Group. Financial details were not disclosed.