Conferencing “no longer about casual conversations over video”

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As workers adjust to doing their jobs from home during the coronavirus, Cisco is seeing a boost from customers turning to its tools for video conferencing and security.

At the beginning of the Covid-19 pandemic, Cisco customers “beefed up their security,” said CEO Chuck Robbins in a “Squawk Box” interview on Wednesday. “All of our customers had a splurge of spending to get through this transition to work from home.”

As a result of the shift, video conferencing software “is no longer about casual conversations over video and casual meetings,” said Robbins. “This is about our customers discussing their valuable intellectual property on these platforms. We have to ensure we have privacy and security.”

That emphasis sets Cisco’s products, notably its video conferencing service WebEx, apart from its competitors, said Robbins.

“For the consumers a simple solution is good,” he said. “For our high-end enterprise customers, they still lean on WebEx to provide the privacy and security that they need.”

WebEx remains the leader in the conferencing software, but its competitor Zoom has made big inroads. Zoom’s market share rose to 28% in the first quarter of 2020, up from 13% in the year-ago quarter, while Cisco’s market share fell to 37% from 43%, according to a June report from Synergy Research Group.

Ultimately, the Covid-19 pandemic has shown that “those customers who had invested in their technology architecture and infrastructure made that transition [to work from home] much easier,” said Robbins. “What it says to CEOs is that when they’re able to, from a capex perspective or when they have more visibility in their business… they realize the importance of making sure they have the foundation in place when we see the next crisis that we see.”

 

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