New Web-Based Software Player: Cisco?

Networking giant Cisco is considering entering the expanding market for web-based software apps.

BOSTON (Reuters) - Cisco Systems Inc is considering offering Web-based alternatives to Microsoft Corp's popular Office software as the networking giant expands on the Internet.

Cisco Senior Vice President Doug Dennerline said on Tuesday his company may develop a service that would allow business users to create documents they could draft and share through its WebEx meeting and collaboration service.

Internet-based alternatives to Microsoft Office cropped up about five years ago, but corporate users have yet to embrace them. If the approach does take off, it could become big business: Microsoft's Office division rang up sales of $60 billion in the software company's most-recent fiscal year.

Google Inc sells Google Apps, an Internet-based alternative to Microsoft Office that includes a spreadsheet, word processor and presentation software. Design software maker Adobe Systems Inc and privately held Zoho Corp offer similar products.

Dennerline, who manages Cisco's online collaboration products, said he is interested in getting into that area.

"That is an interesting space. We are certainly thinking about that," he said on Tuesday during an online news conference. He did not elaborate.

Dennerline also said Cisco is not interested in competing with Salesforce.com Inc in selling online applications that companies use to manage sales and marketing activities -- an area analysts have long speculated that Cisco planned to go into.

Salesforce is the biggest maker of web-based applications, a segment of the software industry that research firm Gartner estimates will see sales rise about 30 percent this year to $6.5 billion.

Cisco, over the past decade, has expanded its focus from routers and switches to a wider range of products including software and video products, such as a high-end video conferencing systems called TelePresence and the WebEx service that facilitates online meetings.

Chief Executive John Chambers said on Tuesday the expansion into new services would continue, including a TelePresence product for homes in the next one to two years.

Chambers has in the past cited plans for a consumer TelePresence system, but analysts have said it would be hard to come up with a cheaper version of the high-definition, life-size video conference system for corporate customers.

"On the one hand, make no mistake about it, we will stay focused on our core competencies, switching and routing. You will see a constant flood of product capabilities and directions coming in these areas," Chambers said.

"At the same time, we realize that the network has evolved."

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