Cisco's Social Networking Strategy Comes Into Focus
Last February Cisco, the venerable provider of Internet backbone hardware, got its hands wet in the social networking scene by acquiring Five Across, a provider of enterprise social networking software.
Context & Ripple Effects
Cisco spent 2007 assembling a social networking position piece by piece: the February Five Across acquisition drew immediate skepticism — GigaOM called it a 'wrong bet' that March — followed by the quieter pickup of Tribe and other assets. The picture only sharpened when Dan Scheinman unveiled EOS, an Entertainment Operating System, at the Web 2.0 conference in October.
By December the through-line is visible: this is not a consumer play but a two-track enterprise strategy — Five Across-style social software for corporate networks, EOS as a content-and-community platform aimed at media companies, with InfoWorld reporting EOS ships next year. For a company whose identity is backbone hardware, the question raised in March was whether it understood social networking at all; the December answer is that it intends to sell it.
First-order effects
- Cisco's existing enterprise customers gain a native social networking option bundled alongside the routing and switching they already buy, putting Five Across's technology directly into Cisco's sales channel.
- Media and entertainment companies become a named target for EOS, giving Cisco a second front beyond the traditional IT buyer.
Second-order effects
- Enterprise collaboration vendors — Microsoft and IBM above all — now face a hardware incumbent moving up into their social-software territory, forcing a response on pricing or bundling in deals where Cisco controls the network layer.
- Independent white-label social platform providers lose the differentiation of being early: a Fortune 500 buyer can now source community features from its infrastructure vendor instead of a specialist.
Third-order effects
- If the pattern holds, infrastructure vendors systematically absorb web-application capability through acquisition rather than building it — a structural shift in who owns the enterprise application layer, and one that tests whether a hardware culture can operate software businesses.
- The specialist-absorption dynamic also raises the stakes for remaining independent social software firms: exit to an infrastructure giant becomes the default endgame rather than standalone growth.
The trend: Network infrastructure vendors are buying their way up the stack into enterprise software and media platforms, turning acquisitions like Five Across into a strategic-institution transition from pipes to applications.