How Will Microsoft’s Acquisition of PlaceWare Affect Your Learning Decisions?

Last week Microsoft Corp. announced that is will acquire PlaceWare Inc., a provider of Web conferencing services. The two companies will work together to provide customers with online conferencing solutions to connect people in a real-time conferencing environment.

Chief Learning Officer Magazine spoke with executives from Interwise and Centra, two companies that provide collaborative tools for the enterprise, about the effect of the acquisition on the market. PlaceWare, Microsoft and WebEx representatives could not be reached for comment.

 

According to Neil Lieberman, vice president of worldwide marketing for Interwise, a provider of Web-based enterprise communications solutions, the real winners in the deal are the customers. Microsoft will end up commoditizing its new acquisition, “so it goes down the price-performance curve pretty quickly and ends up either in a back-office server or on the client desktop faster than it otherwise would,” said Lieberman. “So I think it’s probably reasonably good for customers as long as you agree with Microsoft’s interpretation of what collaboration means.”

 

Leon Navickas, CEO of Centra, a provider of software and services for real-time communication and collaboration, said that Microsoft will use its PlaceWare acquisition to strengthen its platform and infrastructure offerings, and said that Centra plans to use the forthcoming instant messaging and security framework, as well as the Web conferencing. “We’re really looking to sit on top of that and add value.”

 

Lieberman sees Microsoft’s acquisition of PlaceWare as validating the market, just as IBM used to validate a market when it entered it. This validation will drive spending in the sector upward, he believes. The companies that will feel the most impact from the Microsoft-PlaceWare agreement will be the companies that sell tools, such as WebEx, according to Lieberman. Microsoft will start by commoditizing the simple meeting components into its offerings, he explained. And if the Web conferencing tools end up as part of Microsoft’s operating system or back-end server, enterprises that are implementing Web conferencing will not be willing to pay more to acquire it as a hosted service, said Lieberman.

 

The main concern for the sector according to Lieberman is the possibility that the acquisition will freeze the market. But in a bad economy, buying decisions are driven by specific problems that require quick solutions. “Anyone who is in the buying cycle right now—they’ve got a problem, they’ve got a pain point they’ve got to fix right now,” said Lieberman, “and they’ll worry 18 months from now if they need to change their mind.” 

 

But what does the acquisition mean for chief learning officers who are looking for collaborative learning solutions?

 

When chief learning officers approach buying decisions around collaborative learning, they need to consider their options, and they must carefully compare the various offerings. According to Navickas, there is a lot of confusion in the sector due to the relatively recent emergence of the market. “Customers are not entirely savvy about what is out there and where the dividing lines are between all the different products and services,” he said. “But when you peel the onion back and you look in, you can find that sometimes things look the same on the surface, but they’re really not. …There’s really a great distinction between what companies that offer tools deliver and what application software businesses offer.”

 

So when chief learning officers are shopping for software, they must first understand their needs. “A tool will definitely be cheaper and easier to buy. It’ll be good for one thing, and it will do that thing really well—so you’ll buy a hammer and it’s good at putting in nails,” said Navickas. “But if your challenge is to build a house versus to hang a picture, then you probably need an application, meaning a more comprehensive set of tools that are integrated with other things, that come with service and a methodology—like a blueprint for how to build something, some expert advice from people who’ve done it before and integration, which is when you need to connect your house to the sewer system and the electrical and other utilities. It’s like an application—you need to connect it to your learning management system, your customer relationship management, your ERP, your e-mail, your groupware, your instant messaging and, in the future, your Web conferencing.”

 

Lieberman agrees with this assessment, and said that chief learning officers who are looking for pure collaboration tools, such as Notes and instant messaging, will find that Microsoft’s integration of the PlaceWare technology into its platform will deliver what they need. “But to the extent that they need e-learning functionality blended together with that, I don’t think they’re going to see anything,” he said. What Microsoft will be offering will include instant messaging and synchronized meetings and the like, but not the learning component, according to Lieberman. “So chief learning officers probably need to differentiate between the two and decide what it is that they need. If it’s the e-learning stuff that they need, they should call us, and if it’s the collaboration side, they should call Microsoft.” 

 

Navickas emphasizes that enterprises can get a better return on their investments in applications than in simpler tools. “I think that’s why applications are somewhat viewed as strategic, and tools are viewed as commodities,” he said. “One day you might use a Web conference from one vendor, and another day you might use another vendor because, essentially, you’ll be picking your vendor on price as opposed to an application, which will be a lot more about what kind of return on investment it can deliver, how deeply it’s integrated and what’s its architecture and what kind of proof points do you have for customers and so forth.”

 

These kinds of decisions can help chief learning officers get involved in driving the strategic direction of the organizations for which they work. “It’s really the difference between the VP if training, which is all about providing a service to a company and being a service organization and getting work to do from different parts of the organization based on what they need at the time, whether it’s a product launch or an employee orientation program or whatnot, and a CLO who sits at the level of the other chief executives and is looking at the big strategic levers that are going to move the needle of organizational competitiveness or revenue or productivity,” said Navickas.

 

For example, at Deloitte Consulting, which will be changing its name to Braxton, the CLO was involved in choosing technology for collaborative learning. He realized that e-learning meant more than just training and that everyone in the company should have access to it. “He drove the adoption and deployment of Centra across 15,000 desktops,” said Navickas. “That’s a great example of a CLO taking charge and saying, ‘Gosh, this is a real strategic decision that is revenue-enhancing.’ It’s performance-building, has return on investment, everyone in the company is impacted, and it really highlights that forward-thinking CLOs can break out of the stigma of just being kind of the administrators of training initiatives and be actually much more strategic and critical success factors for a company.”

Emily Hollis is associate editor for Chief Learning Officer Magazine. She can be reached at ehollis@clomedia.com. 

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