European Commision throws out Cisco's complaint against Microsoft's Skype acquisition

Microsoft’s acquisition of Skype may be seen as a positive move by many users within the ecosystem, as it brings modern communication to Windows, Xbox, and Windows Phone, but not everyone is keen to the idea. Cisco recently challenged Microsoft’s takeover of Skype Technologies. The challenge though, has been thrown out of the European General Court.

In 2011 the European Commission approved Microsoft’s $8.5 billion acquisition of the VoIP video and call service, Skype, but the major networking company, Cisco Systems, argued that the result would be an unfair monopoly.

Cisco did not want the acquisition to fall through, but instead wanted to “see conditions placed that would prevent Microsoft taking over”.  Cisco has been a major player within enterprise communication and Microsoft’s desire to merge the technologies of Skype and their Lync communication service would surely begin to push them out of the picture.

The European General Court had commented on their decision to throw out Cisco’s case against the Microsoft-Skype acquisition stating that, “Microsoft’s acquisition of Skype is compatible with the internal market.” They continued further to mention that “the merger does not restrict competition.”

Cisco’s move to have the European Commission implement limits on the acquisition was no doubt one of self-preservation and fear, but it simply did not hold water.

What does this mean for the future of Cisco Communications? Well, as the aforementioned European Commission stated – they don’t see it “restrict[ing]” competition within the Enterprise communications space. Cisco should remain standing, but it is difficult to say that Microsoft’s decision to merge Skype and Lync won’t affect any of Cisco’s market share.

Who knows what could happen in the future due to Microsoft’s latest deal. We might see Cisco’s expensive Telepresence Boardrooms be replaced by a collection of Kinects powered by a Windows PC.

Microsoft and Cisco are now fighting for the future of enterprise communication. The question that remains - who will win?

Source: Europa Press; via The Verge

Michael Archambault
  • I would love to see Skype on Windows Phone the way facetime is used on iOS not just focused on enterprise
  • Skype isnt focusied on enterprise at all. Thats why they aquired them. MS Lync is for enterprise, but they wanted something for consumers to integrate directly into Windows, WP and Xbox.
  • Exactly. And bringing it all together just unifies the experience that much more.
    Microsoft going hard yet again!
  • Not sure that rational is right. I think what MS get out of Skype (apart from money!) is the carrier element. Lync is currently restricted in most implementation to either IM/web collaboration, and few (at least in terms of MS customer numbers) deploy a SIP gateway to provide VoIP. Skype give them the cloud based carrier element to leverage giving MS the opportunity to use Lync over Skype for breakout voice calls at cheap rates even versus SIP, with basic IP networking instead of a SIP gateway. Cheaper calls, simpler integration with the back office. Nearly all Cisco Call Manger configs I see are separate VoIP networks. This is a powerful combo for MS if they get it right. No wonder Cisco are literally wetting their pants.
  • You will find that alot of implementations of Lync in Australia deploy Sonus SBC's, however they certainly aren't required for branch VOIP.
  • agree, the company i used to work for implemented lync not too long ago and we discovered that it needs a lot more network resources for VoIP than anticipated, ended up with some sites only capable of 3 simultanious call at once =.=
  • Ole captain Cisco!!
  • Did the EU really say "the merger does not restricted competition"? C'mon, I sure hope not.
  • Fixed- thanks!
  • Hahaha
  • I wish MS would listen to user's complaints about Skype. :/
  • What's your complaint?
  • Slow loading, buggy, can't send photos or files, can't send text messages..
  • For one, you cannot start a call on Skype for Xbone with several callers in part like you can on the phone and PC.
  • The call quality is excellent though! The voice audio quality on the Xbox One headset is absolutely stellar!
  • They're listening:
  • 8.5 million should be billion.
  • I was going to say that sounded like a bargain.
  • Yes. A real bargain. Not like it was cheap enough for me, but maybe Daniel Rubino could buy it.
  • How much do you guys think Dan makes...
  • Just enough to keep him off foodstamps and far away from public housing,. L0L...
  • No idea
  • 1 - Lets see if this ends here. Cisco can still appeal to the European Court of Justice (think US Supreme Court). That one, with 28 judges (one per Country), can reverse the General Courts decision.
    2 - Cisco can also try injunctions next to the Estonian courts (if they haven't already). European countries, unlike US States, have independent judicial systems.
    3 - If Cisco is willing and has a creative legal team, they can even try the European Court of Human Rights.
    Also...isn't it "funny" this comes again, in a time when Tony Bates's name is put forth as one of the possible CEOs for Microsoft?
  • I wouldn't worry about it. Cisco is just worried because their products suck and they've had a load of the market, and now they're afraid of competition.
  • Cisco products sucks? what product they own suck? It seems to me you dont know sh*t about cisco. Google Cisco and then tell me what product they have suck..  Look this is a competition between vendors, all companies can feel the heat. For example, Viber now puts the heat on Skype with there cheap prices. I might agree with other ppls post that Cisco products are expensive but when it comes to Networking, Cisco is number one. Cisco is smart and tough and sure they will surprise us with what they may do to attack back.  Anyways, do your homework and then come back to us and tell me about how bad there products. Most of the ISPs got cisco products so u should be thankfull.
  • I think he means too expensive when he wrote sucks. I have seen  Cisco charge government and companies for the VOIP phones alone and OMFG. Enough for me to start my own networking company with the first monthly payment.
  • Cisco just needs to step up their game. Skype is aimed at the consumer. Microsoft saw a hole and filled it with Skype. Compare to Cisco. They also saw a hole and bought Linksys to fill it. Then they sold Linksys. Not anyone's fault but their own for that one. Back in the enterprise, they already have a leading position with networking and VOIP telecommunications infrastructure. Enterprise, yet they cry about lack of competition in the same space they purposely exited (consumer).
  • The thing is that Skype is starting to take a big place in the enterprise (at least for those with less than 750-500 employees). Cheaper, simpler, and people usually already know how to use it so no formation needed.
  • This was always such an odd complaint. Telepresence from Cisco at the large end doesn't compete with Skype in anyway at all. It would be difficult to even imagine PCs and Kinect competing at the high end of Cisco Telepresence. Even mobile telepresence is a stretch. Lync competes more with WebEx really. I suspect that was more of their concern.
  • Cisco fears Microsoft in the unified communications market.  Their hodge-podge products, namley call manager and jabber are expensive, limited, and a nightmare to manage. What really scares them is federating Skype with enterprises who use Lync. The possibilities are endless and its eaiser to do on Microsoft's solutions.
  • Sour grapes!?
  • Yeh cheez, merey aziz!
  • My company was dumb enough to purchase Cisco's IP phones. 1 year later, still cannot get voice mail. The software that is suppose to work on my laptop never works and headsets suck! - Guess what, everyone uses Skype dispite protest from IT because the Cisco stuff simply sucks! They wonder why they had such a bad fiscal quarter, perhaps they should fix their products!
  • lol blame the companies IT not Cisco Products. The companies IT cant install Voice Mail. The Tech works well so if i was i would ask the company to check how good are the IT team.
  • Another failure of the "Litigate instead Innovate" strategy. Think how many software engineers they could have hired with all that lawyer money.
  • Go cry elsewhere Cisco. Change your strategy or end just like Kodak!
  • What goes around, comes around!
  • Google hangout will win everything if Skype keeps up there ways. So sue them now in advance. :(
  • Guys, Seriously stop the none sense. Who doesnt fear competition? Micro and Cisco are very huge and in some places they compete and others no. Cisco Is awesome in Networking and Micro is great in services. Look at Apple and Samsung, HTC and Nokia. This is normal between successful companies and who ever say cisco sucks is seriously stupid, and who ever says Mircosoft sucks also a jerk. Yes,  this might effect cisco but they will attack back or do something to there Unified Communication and bring back the heat to MS. Maybe this would help us by forcing Cisco to lower there prices when it comes to Unified Communications, who knows.
  • Skype is WAY too unreliable for serious (or often even casual) use. Well, the desktop version may be OK but the phone and PC/tablet app versions are really shakey. Cisco don't need to worry.