How Cisco Webex Will Reach ‘Verb Status’ In 2024

“I think from a calling perspective, [Webex] is still in pretty good position and I think they’re going to accelerate that with contact center. Contact center has caught up. A lot of the AI and innovation that they’re doing there will play really good in the contact center space,” one Cicso partner told CRN on the company’s plans to refresh its dominance in the UC&C space.

The competition has been stiff in the unified communications and collaboration market (UC&C) arena for nearly four years, which is why Cisco Systems has been “fundamentally reimagining” ways to take the friction out of working together, regardless of a users’ physical location. It’s that focus that will help the tech giant win against the likes of rival Zoom Video Communications, which has reached “verb status” with many end users, according to Cisco Executive Vice President and General Manager of Security and Collaboration Jeetu Patel.

End user perception, Patel said, is one of Webex’s biggest challenges that the company will continue to tackle in 2024. The company will do that through continued product innovation in which the Webex platform will benefit from the expertise that Cisco has in other areas outside of collaboration.

“The thing that I know is given that you’re competing with verb status by others is that … when you have to build a product for hundreds of millions of people, I think there’s only one scalable marketing engine that works time and time over again. That’s word of mouth, where customers love your product and are so compelled to talk about it, that they continue to keep actually telling their friends and family about it,” Patel said.

At Cisco’s WebexOne 2023 event held at the end of last year, Patel described the “flywheel effect” that end users get with Webex because the platform takes advantage of Cisco’s networking, security, AI and observability technology in addition to the company’s expertise in collaboration.

AI specifically, Patel told CRN, is going to be pervasive in every aspect of the Webex platform.

The tech giant at the end of 2023 unveiled a collection of new Webex devices, features and upgrades. Included in that was new Real-Time Media Models (RMM) designed to pick up on visual and audible cues, such as gestures, or an individual walking out of the room during a meeting. The job of the AI-based RMMs is to enhance audio and video quality by using these actions and object recognition as context. Cisco’s new AI Codec in Webex, also based on generative AI technology, works to solve the challenge of audio quality, regardless of network conditions, by allowing for transmission redundancy to recover from network packet loss. Cisco’s Webex AI Assistant also now includes a new set of features that pull in RMM and Large Language Models (LLMs) to improve communication and collaboration for both hybrid workers and contact center agents.

For channel partners, the AI piece is especially important and will become more attractive to customers looking to do more with collaboration and contact center tools in a hybrid working environment.

“Cisco has great innovation in the video space with [things like] intelligence, the video devices, the audio, the framing, and customers also like the sustainability features,” said Joe Berger, vice president of digital experiences for Cisco partner World Wide Technology (WWT), a firm that was named Cisco’s global Americas collaboration and security partner of the year in November.

Webex Meetings, however, has struggled against the steep competition with tools like Teams and Zoom, he said.

“I think from a calling perspective, [Webex] is still in a pretty good position and I think they’re going to accelerate that with contact center. Contact center has caught up. A lot of the AI and innovation that they’re doing there will play really good in the contact center space,” Berger said.

Cisco’s contact center offering, which Patel said was built from the ground up around customer experience, is an “exciting opportunity that’s growing really fast,” he told partners during Cisco Partner Summit 2023 in November.

“There’s a huge amount of opportunity for partners to add value,” he said.

And in the meeting space, Cisco estimates that 98 percent of future meetings will include at least one remote participant, but only 15 percent of the world’s conference rooms are equipped with video.

“Customers are looking for help with: ‘How do I go out and equip more of my conference rooms?’ That’s where partners come in,” Patel said.

A Changing Market Landscape

Cisco in the early days of the pandemic in 2020 enjoyed dominance in the collaboration market alongside Zoom and Microsoft Teams. But while Cisco continued to innovate its Webex portfolio of Meeting, Calling, and Contact Center products, the market began to cool off as offices reopened and employees returned to work.

As a result, Cisco in November 2022 revealed plans to “rebalance” certain business units, including its Collaboration segment, which included job cuts. The Collaboration segment during Cisco’s fiscal Q1 2023 declined 2 percent year over year to $1.09 billion in revenue compared to Q1 2022, which the company attributed to declines in Meetings, offset by growth in Cloud Calling and Contact Center.

The Collaboration segment continued to struggle in FY 2023, but during Cisco’s most recent fiscal quarter — Q1 2024 — Collaboration increased 3 percent year over year to $1.12 billion in revenue, which the company attributed once again to declines in Meetings that was offset by growth in Calling and Contact Center.

As of Q3 2023, Microsoft was the dominant vendor in the UC&C space with 42.8 percent of the market share, followed by Cisco with 6.8 percent and Zoom with 6 percent. The remaining 44.4 percent included a variety of “other” UC&C offerings, such as RingCentral, according to Statista Research published in December.

But while Cisco and Microsoft are often competitors in the UC&C space, the two companies see themselves primarily as partners, which benefits partners and end customers, WWT”s Berger said.

The two companies in 2022 announced interpretability with each other. Today, videoconferencing users can choose between running Cisco Webex or Microsoft Teams natively on their Cisco Meeting devices and cameras.

“The way to think about this is not in zero sum. This is really important. If people use Microsoft Teams, Cisco will make money because we will have our devices that can actually be supporting the Teams implementations that organizations have. The reason we did that is whenever there’s something that has a tailwind, we don’t want to fight it, we want to enable it,” Patel told CRN. “Microsoft Teams actually gets better when it’s used with Cisco devices, because they get benefit of our AI capabilities. So, if people use Microsoft Teams, use us with Microsoft Teams.”