This was a painful but necessary day at Cisco Systems, which shut down its Flip video camera business and apparently repositioned the Umi consumer telepresence solution for the SMB market. It sounds like Umi will now compete with Vu TelePresence, LifeSize and other SMB-type telepresence solutions for MSPs. We never like to hear about job losses in the IT industry, but here's why Cisco's moves made sense.
The VAR Guy already offers perspectives on Flip's death. We love the device but it really is time for Cisco to refocus on its core enterprise business. Meanwhile, we haven't been impressed with Cisco's Umi telepresence strategy. The consumer system, sold through retailers like Best Buy, didn''t seem to catch on for three reasons:
- Consumers are perfectly happy using free video conferencing services like Skype and webcams built into PCs and notebooks.
- Consumers aren't willing to pay yet another monthly service fee (telepresence service...) on top of their existing monthly service charges (heat, electric, cell phone, land line, Internet access, cable, etc.).
- Umi was expensive, at roughly $500 per deployment.
Apparently, that's Cisco's new strategy. According to a prepared statement, Cisco will: "Integrate Umi into its Business TelePresence product line and offer it through the same channels as its other TelePresence offerings."
Read between the lines and I suspect a Umi managed services strategy for SMBs is on the way. And that makes sense, especially since many SMBs can't afford enterprise-class telepresence services and the back-end infrastructure that comes along with it. Still, I think Umi will face competition from free consumer services like Skype -- even in the SMB market. But Umi's chances for success are far better in the SMB space. When I asked for a Umi demonstration during a recent visit to Best Buy, employees there could barely describe the offering to me...
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