Cisco Systems has decided to kill its cloud-based e-mail service Cisco Mail, only 13 months after it was introduced, the company said in a blog post on Tuesday.
With the growing acceptance of cloud services, Cisco saw a chance to offer e-mail services along with its successful WebEx Conferencing service, which combines desktop sharing through a web browser with phone and video conferencing. But it seems customers weren’t as interested in getting e-mail from the networking giant.
Cisco’s failure, after investing US$250 million, demonstrates the challenge of penetrating a mature market, and the difficulty in delivering a complex and demanding cloud-based application service, Matthew Cain , vice president and lead e-mail analyst at Gartner, wrote in a research note.
Cisco said it folded the service because customers have come to “view their e-mail as a mature and commoditized tool”, which has apparently made the field less interesting for Cisco.
Before committing to any cloud e-mail platform, companies ought to validate its success and momentum, Cain wrote.
Cisco Mail competed with Google Apps, an online package of e-mail, scheduling and productivity applications. The companies are very much polar opposites. While Cisco aims to find new areas where it can charge a premium for its products and services, Google aims to make products and services a commodity, in order to boost advertising sales.
When the search giant launched Google Apps in 2007, it immediately went to an extremely low price, Cain said in an e-mail.
On paper, you can see that Cisco was fighting a losing battle. Google Apps offers a wider set of services with more storage for less money.
Cisco Mail’s standard package, which included Outlook integration and 5GB of storage, cost US$ per user per month, while Google Apps for Business offered five times the e-mail storage for $50 per year.
Organizations are increasingly buying suites of collaboration tools, according to Cain.