Cisco Systems Inc. this morning announced that it intends to acquire rich media conferencing leader Latitude Communications Inc. in an $80 million cash deal.
The acquisition of the Santa Clara, Calif. enterprise conferencing provider builds on Ciscos portfolio of horizontal applications in its Architecture for Voice, Video and Integrated Data (AVVID) line of voice over IP (VOIP) products, according to Don Proctor, vice president and general manager of Ciscos voice technology group in San Jose, Calif.
Latitudes MeetingPlace platform, which combines voice, video and web conferencing, is already integrated with Ciscos Call Manager and IP phones. “Users can schedule a conference with [Microsofts] Outlook, move between audio, video [Instant Messaging] and Web sharing and have the administration and set up of the conference call easily accessible through their Cisco IP phone,” said Proctor.
Although Cisco already had an alliance and joint-development effort in place with Latitude, it chose to acquire the firm outright to more readily expand on the existing level of integration, Proctor said. “We will integrate Ciscos IPVC video conferencing with MeetingPlace. And we will begin to take advantage of dynamic information in the network to help with things like presence, location and user authentication in a seamless way,” he said.
Latitude also brings to the table integration with popular desktop productivity applications such as Lotus Notes as well as Microsofts Outlook and Messenger. “The user can benefit from a simple and seamless interface through the PC for rich media conferencing,” Proctor asserted.
The market for audio conferencing is about $2.5 billion, and Web conferencing is about $500 million, but growing at a faster rate, Proctor said. Latitude has a 37 percent market share for rich media conferencing, he added.
Latitude has seen a few setbacks in the last few months, however. It lost a bid to renew its major contract with Hewlett-Packard recently and it announced plans in September to let go about 20 percent of its workforce.
On the services side, Latitude competes with WebEx, Microsofts MS Live Meeting and audio conferencing services from carriers such as AT&T. On the equipment side, one area Latitude has emphasized more recently, the company competes with Polycom and Sonexis.
Cisco expects to grow Latitudes $40 million in revenue through greater channel reach and through additional applications it can offer to customers deploying Cisco IP telephony offerings.
The deal is expected to close within the next 90 days. Proctor would not say whether additional layoffs are planned, although Latitudes CEO Rick McConnell will stay on to head up a new business unit for conferencing and media services.
Additional reporting on this story was provided by Matt Hicks.