Cisco to EU: Dig Deeper on Microsoft-Skype Buy

Cisco announced today that it asking the European Commission to take another look at the $8.5 billion Microsoft-Skype acquisition and require support for more compatibility with other video and collaboration platforms.

The appeal was announced in a company blog post by senior vice president of Cisco’s Video and Collaboration Group Marthin De Beer. It was not a drum-beating type announcement. Neither Microsoft nor Skype are in the headline of the post and are not mentioned until the second paragraph. The post is essentially about the importance of keeping video-to-video calls seamless and open, with Cisco’s disapproval of the Microsoft-Skype being an extension of that belief.

“Cisco does not oppose the merger, but believes the European Commission should have placed conditions that would ensure greater standards-based interoperability, to avoid any one company from being able to seek to control the future of video communications.”

The post makes clear Cisco’s fear that Microsoft’s integration of Skype could lock potential Cisco customers into the Microsoft ecosystem.

“For the sake of customers, the industry recognizes the need for ubiquitous unified communications interoperability, particularly between Microsoft/Skype and Cisco products, as well as products from other unified communications innovators. Microsoft’s plans to integrate Skype exclusively with its Lync Enterprise Communications Platform could lock-in businesses who want to reach Skype’s 700 million account holders to a Microsoft-only platform.”

At issue is the difference between formats used by Cisco and Microsoft Lync and Skype. Cisco uses H.264 video codec, which is the de facto standard for HD video. Microsoft and Skype do not use H.264. To get Lync to interoperate with H.264 standards-based video endpoints a third-party gateway would be needed, which can decrease quality and increase costs, according to Cisco.

The Cisco post emphasized the need for open video communications as the amount of video explodes around the world. In three years, Cisco predicts, there will be 3 billion Internet users, the average fixed broadband speed will be 28Mbps and every second 1 million video minutes will traverse the Internet.

In a story today on this subject from IDG News Service writer Stephen Lawson, Microsoft defended its Skype acquisition:.

“The European Commission conducted a thorough investigation of the acquisition, in which Cisco actively participated, and approved the deal in a 36-page decision without any conditions. We’re confident the Commission’s decision will stand up on appeal,” a Microsoft representative said in a written statement.