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Cisco appeals Microsoft Skype merger, wants better interoperability

Cisco is appealing the meger of Microsof and Skype which was already approved my the EU and US regulators. Cisco isn’t necessarily disapproving of the merger, but simply asking the guarantee of interoperability between the two, which should have been agreed upon before approval.

Since its acquisition of Skype, which has been long approved by US and EU regulators, Microsoft received criticism for being coy about its plan with Skype and the absence of any Skype integration and application on the Windows Phone platform. It seems that the software giant will have more to worry about than mere criticism after Cisco is now appealing the approved acquisition.

“Imagine how difficult it would be if you were limited to calling people who only use the same carrier of if your phone could only call certain brands and not others. Cisco wants to avoid this future for video communication, and therefore today appealed the European Commission’s approval of the Microsoft/Skype merger to the General Court of the European Union,” writes Martin De Beer on the official Cisco blog.

The appeal that Cisco has filled is not intended to reverse the already approved merger of Microsoft and Skype. Instead, Cisco which was also joined by Messagenet, another VoIP provider, wants to ensure that interoperability will still exist between their products and Microsoft’s future Skype-products.

“The appeal is about one thing only: securing standards-based interoperability in the video calling space. Our goal is to make video calling as easy and seamless as email is today. Making a video-to-video call should be as easy as dialing a phone number. Today, however, you can’t make seamless video calls from one platform to another, much to the frustration of consumers and business users alike.”

Microsoft, which acquired Skype for a staggering $8.5 billion, has been relatively shy about its plan with Skype. They software maker vaguely mentioned how its current line of products (Xbox, Windows Phone, Microsoft Office, and Lync) will be synergized to offer users better services. The software giant has never mentioned any plan to keep strong support of Skype on other platform. Some even fear that Microsoft will prioritize supports on its platform especially after the first update they released got rid of the Google toolbar which previously was bundled with the installer.

Skype, as a VoIP service, has nearly 660 million users. This represents a huge market for both VoIP companies, even though Skype has never been profitable as a company. The majority of people are not paid users but if Microsoft decides to give the service away for free, including to those that are paid users, this could represent a huge opportunity for Microsoft in term of advertising. In fact, this strategy is akin to Google giving away the majority of its service for free as long as users are willing to consume advertising; Cisco understands what will be the implication stultify interoperability between Skype and other VoIP vendors.

“For the sake of customers, the industry recognizes the need for ubiquitous unified communications interoperability, particularly between Microsoft/Skype and Cisco products, as well as products from other unified communications innovators. Microsoft’s plans to integrate Skype exclusively with its Lync Enterprise Communications Platform could lock-in businesses who want to reach Skype’s 700 million account holders to a Microsoft-only platform.”

Cisco, with the appeal to the EU, represents a preventive measure against to what they think might Microsoft would do but Cisco does not really know Microsoft plan with Skype. Microsoft has not been really clear about the plan with Skype. Guess people will have to wait to see Microsoft’s true intention.

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