AT&T Gets Interwise for Web Collaboration

The Interwise purchase brings VOIP, Web and videoconferencing to AT&T's competition with Sprint, Verizon, Microsoft, IBM and Cisco.

AT&T picked up Internet-based conferencing and collaboration software provider Interwise Oct. 1 and with it a bigger play in the video, Web conferencing and collaboration race against rivals Sprint, Verizon and Cisco Systems.

San Antonio-based AT&T acquired privately held Interwise, of Cambridge, Mass., for $121 million, both companies said. Interwise offers VOIP (voice over IP), Web and videoconferencing services both for on-premises and hosted deployment, along with a hybrid of on-site and hosted services, which AT&T said it will offer alongside its own networking, VOIP, conferencing and collaboration services, as well as its MPLS (Multiprotocol Label Switching)-based IP network for businesses.

More than 250 businesses already use Interwises software to conduct voice conferences, Web meetings, virtual classes, Web seminars and Webcasts for thousands of employees simultaneously via their desktop computers.

There is no shortage of market opportunity for such services, which businesses often use in conjunction with e-mail, instant messaging, presence and other collaboration tools to help their employees work together on tasks. Research company Frost & Sullivan said it believes the market for audio, Web and videoconferencing will be worth $5.9 billion through 2007, with growth continuing into 2008.

The added utilities will help AT&T better reach the lucrative market opportunity for selling into enterprises that the phone companies and other technology providers crave. AT&T rivals Sprint and Verizon are also offering audio, video- and Web conferencing for their business customers.

"Were really excited about having Interwise as part of the company because they are one of the only ones to offer premise[s]-based collaboration, network-based collaboration or a hybrid solution," allowing users to collaborate across both environments, said Steve Sobolevitch, AT&Ts vice president of business development.


To read more about the hot Web conferencing market, click here.

IDC analyst Robert Mahowald said the deal is a step up for AT&Ts enterprise business, which has strong, hosted audio conferencing but has lacked on-premises services and relied on reseller agreements for Web conferencing to this point.

"As they try to grow their enterprise business larger and larger toward [broader] Web collaboration, this gives them a development platform," Mahowald told eWEEK. "It gives them some customers but it also gives them a platform that they can actually play with as opposed to Microsofts or Ciscos, which they were just reselling."

To be sure, phone companies are far from the only technology providers interested in Web collaboration. Microsoft and IBM have been carving out such packages through their SharePoint and Lotus portfolios, respectively, as part of broader unified communications strategies. Adobe and Citrix also play in the Web conferencing space.

Cisco lent spirit to the hunt in a major way in March with its bid to buy WebEx for $2.9 billion. But most acquisitions in this space are fill-in-the-gap deals, such as IBMs Aug. 22 agreement to purchase on-demand Web conferencing software maker WebDialogs.


Click here to read more about IBMs purchase of WebDialogs and what it means for Web collaboration.

"The way these independent companies are flying off the shelves, I dont even know whos left to buy," Mahowald said.

Should the deal close in the fourth quarter as AT&T expects, Interwise will operate as a business unit within AT&Ts $35 billion Global Business Services group, which is led by Group President Ronald E. Spears.

AT&T said it will retain Interwises 150 employees, including its management team, and its domestic and international operations, including its R&D center in Israel.


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