The VAR Guy

Rumors are circulating across the Web that Cisco Systems plans to buy Skype. Why would the king of networking potentially want to own an instant messaging and chatting system? The answer is obvious to The VAR Guy. Here’s the analysis.

First, The VAR Guy needs to clarify: Cisco potentially buying Skype is just a rumor — though it’s floating across TechCrunch, one of the Web’s most widely read technology blogs. Apparently, Skype insiders are hoping for a company valuation of $5 billion, TechCrunch estimates. As you may recall, eBay sold Skype of a private investment group in 2009.

So, why might Cisco be taking a look at Skype? The answer is simple: Web-based video conferencing.

• At the very high end of the market, Cisco continues to promote telepresence executive conference rooms that can cost $200,000 or more per location to deploy. Gradually, Cisco has extended its telepresence strategy to the mid-market and to lower-end systems.
• At the very low end of the market, Cisco acquired the Flip video camera. The goal: Make video incredibly easy to produce, so that consumers and businesses load up the web with even more video — driving even more demand for Cisco’s broadband networking solutions.

Skype potentially fits within that low-end Cisco video strategy, The VAR Guy believes. Why? Take one look at The VAR Guy’s own FastChat videos and you’ll see how l0w-end video conferencing is going mainstream, thanks to tools like Skype (among others).

Still, the Cisco-Skype business combo is just a rumor… But The VAR Guy thrives on rumors. Oh, and The VAR Guy didn’t call Cisco for comment about the Skype rumor because Cisco’s standard policy is not to comment about rumors — especially those circulated by anonymous bloggers.

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