Cisco looking to preserve the peace with Microsoft

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Cisco looking to preserve the peace with Microsoft

Customer demand is driving Cisco to prevent a clash with Microsoft, but the networking giant seems uncertain about the question of they will succeed.

"My customers want me to work with Microsoft. They do not want to see us collide in a non constructive way," Cisco chief executive John Chambers said in a meeting with reporters at the Networkers at Cisco Life user conference in Anaheim, California.

But in admitting that it will be hard to prevent a market clash as both companies are expanding into each other's turf, Chambers pointed out that firms have a poor track record in combined cooperation and competition.

"We will see if we can create a model that truly allows you to compete at times and partner at times. Nobody has ever done that well. They call that coopetition. But candidly, you do it only because your customers force you to," said Chambers.

Microsoft is currently pushing into the unified communications market, where Cisco has been playing for a long time with its IP telephones. Unified communications allow users to route messages across several technologies such as instant messaging, telephone or email.

Cisco meanwhile is closing in on Microsoft in the digital entertainment market that is targeting with the Media Center capabilities in Windows Vista and Windows XP, as well as its Xbox 360 gaming console.

Cisco last year purchased Scientific Atlanta, a manufacturer of television set top boxes. The company has previously acquired Linksys and Kiss, a maker of high end, networked consumer electronics appliances.

The two companies so far have avoided public battles, which Chambers credited to growth of the overall market that allowed both vendors to increase revenues. While he didn't exclude entering addition markets that Microsoft could consider their core, he expressed hope that the two companies will somehow be able to continue their existing cooperation initiatives.
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