Doing the Yahoo/IBM/HP/Microsoft/Cisco Shuffle

By Eric Lundquist  |  Posted 2006-12-14

Let's see if we can sort this out. IBM and Yahoo are teaming up to undermine the one box that Google would like to sell to businesses. Microsoft and HP are teaming up to sell you pre-packaged "People Ready" apps in a box to counter IBM's Global Services. And Cisco, which rose to fame and glory selling communication boxes, would like you to think that in a couple of years they won't be box vendor at all.

So, starting with IBM and Yahoo. Yahoo, which suddenly would like you to think that they have not been wasting an enormous amount of time and money on pretending to be a media company, is rushing to return to its roots as a search company. But unlike its original, go-it-alone hierarchical consumer (and largely hand selected) search, it has found a partner in IBM. The two companies announced a free corporate search product. The IBM OmniFind Yahoo! Edition is a downloadable application from Yahoo that, if it works, could handle a lot of small to medium enterprises search needs. These free products always sound a lot easier to install than they are. Do you really want all your documents and other files to be readily searchable? Have you been diligent in making sure that documents with sensitive information are encrypted and tucked away in inaccessible folders? Of course you haven't, you've been saving every document to your desktop since the first pc appeared in your office. Your files are a mess, we know that.

Anyway, the free IBM/Yahoo product is a jab at the Google Enterprise search box which in its entry level costs a couple of thousand. The Google box has seen a slow acceptance rate (in my opinion) since it was first introduced in an overprices, overpowered version. Yahoo giving away stuff for free is not really helping its bottom line. IBM knows that while you can download it free on your existing server, you'll soon be in the market to buy a server and storage system that can help you sort out your mess.

Microsoft and HP teaming up to sell "People-ready" applications is a good deal for everyone except those who might think their businesses don't need "People-ready" applications and certainly would like to think that every sales pitch doesn't end with a Microsoft answer. One of the consistent knocks against IBM Global Services (which they usually deny) is that the answer to every technology question is that you need more IBM stuff installed by an IBM staff and maintained by an IBM service contract. So now, HP is going to be jointly creating a marketing and services arm to sell Microsoft applications (think lots of Vista) on HP boxes. The deal is valued at $300 million and will involve several thousand newly trained Microsoft consultants at HP. Here's the downside. I thought HP always did a good job at trying to stay fairly neutral in recommending a software vendor for a particular project. A lot of the headway that open source and Linux made into the business space came as HP provided the corporate security blanket users want before going to Linux. It will be interesting to see if HP can strike a balance between working with Microsoft and being a cheerleader for Microsoft at any cost.

Cisco has been championing its move into a software as a service vendor (SAAS). The idea being that instead of buying lots of distinct boxes from Cisco, you could simply add on or upgrade your networking and security services depending on your needs. This fits in well with the vision from Cisco boss John Chambers who always did a great job at promoting the vision to the point you forgot that Cisco makes its money selling users more and more boxes. In his latest vision statement , Chambers is pushing the idea of video as the next big Internet application. Can hardware companies become service companies? Can you make a successful transition from revenues based on sales to revenues based on subscriptions? Cisco is not the only one tangling with this issue, but the pipes vendor never seems to have as much promise as the content vendor. Maybe Cisco will have to get into the content business if it really wants to be seen as the video leader.

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