WebEx is exactly the kind of a company that is being disrupted by new web startups, who are creating cheaper and better alternatives to older web applications.
New York, NY (PRWEB) March 13, 2012
SalesCrunch today announced that it is making an unsolicited bid of $1 plus 15% equity in SalesCrunch to the shareholders of Cisco Systems, Inc. to acquire WebEx, the networking conglomerate’s web conferencing service.
Since acquiring WebEx for $3.2 billion in 2007, Cisco has closed or sold various business units in an attempt to focus more on its core market. In March 2011, Morningstar analyst Grady Burkett reported, “What investors would like is to see them [Cisco] more focused on their core market, like routers, switches and data centers.”
In April 2011, Business Insider reported that Cisco CEO John Chambers “had to eat crow and issue a memo, admitting Cisco ‘lost focus’ thanks to its plan to move into 30 areas that had little-to-nothing to do with its core business, network gear.” On April 12, 2011, Cisco stunned everyone when it shut down Flip, for which it paid $600 million just two years earlier, laying off 550 workers in the process. A month later, Information Week reported that “WebEx is the most likely to be sold [next] as it is less integrated with Cisco, not part of the core router business, and more likely to attract a buyer.”
Earlier this year, Cisco killed off Umi Telepresence, once again inciting rumors regarding the fate of other non-core business units such as Linksys and WebEx.
As Michael Arrington—founder and former co-editor of TechCrunch—wrote when WebEx was first acquired by Cisco: “It’s expensive and bulky. WebEx is exactly the kind of a company that is being disrupted by new web startups, who are creating cheaper and better alternatives to older web applications.”
Arrington’s words proved prophetic in 2010 when SalesCrunch, led by former founding team member of Trulia.com, launched its next-generation online meeting platform, which the company defines as software-free, social, collaborative, smart (analytics), viral, affordable, scalable and integrated with existing market-leading platforms such as Salesforce.com and LinkedIn.
As part of an acquisition, SalesCrunch proposes to migrate the entire WebEx user base to its next-generation platform over the course of 12 months. Customers will enjoy a more robust set of features, with lower pricing, social integration, and tracking and analytics capabilities never before possible on WebEx’s platform. Further, SalesCrunch plans to refocus WebEx’s sales and engineering teams on its platform, saving thousands of jobs and avoiding another disastrous situation like Flip.
Founder and CEO Sean Black believes SalesCrunch is a natural successor to WebEx. “Everything Michael Arrington said about Cisco in 2007 has rung true. At SalesCrunch, we deliver a far superior technology platform—optimized for sales and meetings efficiency—at a fraction of the cost attainable by WebEx and its competitors who have massive legacy infrastructure costs. Although WebEx doesn’t fit into Cisco’s core business, it doesn’t have to suffer the same fate as Flip. While Flip faced intense competition from Apple’s iPhone and others, it had a solid brand that could have easily been refocused to a vertical market, like the action adventure market that has been seized by GoPro, had it not been paralyzed by classic innovators’ dilemma. SalesCrunch is free of the constraints that make it nearly impossible for large companies to innovate and take advantage of new, disruptive technology.”
Cited articles are available via SalesCrunch’s tender offer presentation available at http://www.salescrunch.com/webex.
Backed by Accel Partners, First Round Capital, Nextview Ventures and AOL Ventures, SalesCrunch is a next-generation meeting platform focused on applying science to the art of selling. The company offers a software-free, social, and scalable solution that helps track and measure customer interactions and sentiment across a company, makes selling transparent and empowers organizations to meet the demands of a new generation of buyers to power profits. For more information, visit http://www.salescrunch.com.