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Cisco buys PostPath, targets Microsoft Exchange

By Steven J. Vaughan-Nichols on August 27, 2008 (7:00:00 PM)

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No one saw this coming. Cisco, the networking giant, announced today it was buying PostPath, maker of the Linux-based Exchange server replacement PostPath Server.

PostPath is best known as a drop-in replacement for Microsoft Exchange. Unlike other would-be Exchange competitors Scalix and Lotus Domino/Notes, which use a Outlook-compatible Mail Application Programming Interface (MAPI) on the client PC, PostPath actually reverse-engineered Microsoft's MAPI and Active Directory (AD) protocols. This means that, from the network and Windows PC's viewpoint, PostPath actually appears to be an Exchange server.

While PostPath is the only Exchange challenger that has used reverse-engineering to challenge Microsoft, its approach may be adopted by other open source companies. When the European Commission forced Microsoft to open up the Common Internet File System (CIFS) and AD protocols, it also forced the company to open up the MAPI protocols.

An open source project called OpenChange is now working with Samba using this information to build open source implementations of Microsoft Exchange Server and Exchange protocols. No commercial open source business is currently following up on OpenChange's efforts, though, according to Sarah Radicati, CEO of The Radicati Group.

With PostPath's software, Cisco plans on extending the email and calendar functionality of its software-as-a-service (SaaS)-based WebEx collaborative platform, which already incorporates instant messaging, voice, video, data, document management, and Web 2.0 applications. Specifically, "The acquisition of PostPath complements our strategy to develop an integrated collaboration platform designed for how we work today and into the future, providing real productivity gains and a more satisfying user experience," says Doug Dennerline, Cisco's senior vice president of the Collaboration Software Group, in a statement.

If that sounds like a challenge to Microsoft and Exchange -- which, according to a recent Ferris Research survey has a business email market share of 65% -- it is. According to a highly placed source at Cisco, "We have been unhappy with Microsoft for some time before the release of Exchange 2007, which included VoIP (Voice over Internet Protocol) in its Unified Messaging suite. It was time to offer our customers an alternative." Cisco had long been a VoIP leader using the Session Initiation Protocol (SIP), which Exchange 2007 also now supports.

Cisco CEO John Chambers said, during Cisco's last quarterly report, "If you think about what we're going to do, we usually acquire ... when we move into new markets that we do not have the expertise for the product segments in." At the same time, the PostPath deal does fit in well with Cisco's existing WebEx Connect collaboration platform. Cisco was quick to make this very point in its announcement of the deal.

Cisco watchers had been hoping that Chambers would start buying again, since it is widely believed that he would only OK any new Cisco acquisitions if he believed the market had finally bottomed out.

Ferris Research analyst Richi Jennings thinks Cisco made a great deal. Jennings says, "Once again, Cisco makes a sound investment in an email technology vendor, just like it did with IronPort," an email security appliance provider.

As for PostPath, Jennings says, "These are the clever guys who reverse-engineered the Exchange client protocol, MAPI/RPC, and the related on-the-wire details needed to make a vanilla install of Outlook talk to a non-Exchange mail server with full fidelity. Impressive stuff. Of all the other Exchange alternatives, PostPath has the most interesting architecture. And I say that as one who has years emotionally invested in the OpenMail technology" -- which served as the foundation for Scalix.

Looking at the deal itself, Jennings opines, "I think Cisco fell out of love with Microsoft a while back. Something to do with VoIP support in Exchange and how Cisco thought it was Microsoft's partner but it turned out that Microsoft was competing with them. Nothing familiar there at all...."

As for what Cisco plans, Jennings says, "Sounds like Cisco wants to offer SaaS collaboration, based on PostPath and WebEx. Whoever said the email world has become dull and uninteresting?"

Cisco will pay approximately $215 million in exchange for PostPath's shares. The acquisition is expected to be completed in Cisco's first quarter of fiscal year 2009. Upon completion of the acquisition, PostPath employees will become part of the Cisco Collaboration Software Group.

Steven J. Vaughan-Nichols has been writing about technology and the business of technology since CP/M-80 was the operating system of choice for PCs and 2BSD Unix was what the cool kids used on their computers.

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on Cisco buys PostPath, targets Microsoft Exchange

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"Unified Communications" Wars

Posted by: Anonymous [ip: 122.162.202.162] on August 27, 2008 09:18 PM
enterprise collaboration wars are here. all major organizations have been going in this direction, towards "integrated collaboration" solutions or "unified communications" (messaging+collaboration+conferencing). google had been slowly building its online suite with google pages, google apps etc; microsoft stepped into the fray with its "hosted productivity suite"; and now cisco has also dives in!

players serving growing businesses are also going the same way. hyperoffice (http://www.hyperoffice.com) recently launched its web conferencing solution hypermeeting to add the missing piece to its suite already equipped with messaging and collaboration features. (i think their solution exceeds the biggies in many ways)

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Cisco buys PostPath, targets Microsoft Exchange

Posted by: Anonymous [ip: 24.248.89.66] on August 27, 2008 10:00 PM
The question is if this is going to be software package or is going to become a closed box solution such as a SonicWall or Barracuda.

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We need lots of different solutions

Posted by: Anonymous [ip: 66.114.78.90] on August 28, 2008 08:11 AM
The real problem is that too many people believe that everyone needs the feature set of Exchange. If you need the feature set of Exchange then perhaps you should be running Exchange. Some might prefer the extensibility of Notes. Some folks find that their needs are better met by Citadel, which is a cross between a groupware/messaging and CMS (and is 100% GPL, by the way). Others might like what Cisco is going to do, which is to take the WebEx style of presentation and add groupware features to it. We definitely need more diversity here. It's a fallacy to assume that an Exchange killer has to be an Exchange clone (which is what brands Z and S are doing -- badly).

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Re: We need lots of different solutions

Posted by: Anonymous [ip: 192.58.229.21] on August 28, 2008 11:27 AM
"The real problem is that too many people believe that everyone needs the feature set of Exchange."
No: the real problem is that too many people believe that _they_ need (the feature set of) Exchange.

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Re: We need lots of different solutions

Posted by: Anonymous [ip: 216.150.141.50] on August 28, 2008 04:19 PM
Totally agreed there. Exchange's feature set isn't right for us, we looked at several F/OSS alternatives, we eventually settled on Citadel. Some people complained but once they got used to it they realized that it was actually a better fit for us than Exchange. I can't wait to see what Cisco does with PostPath!

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Cisco buys PostPath, targets Microsoft Exchange

Posted by: Anonymous [ip: 76.220.242.68] on August 28, 2008 02:49 PM
If you want to pay for a collaboration suite, unless you are a 100% Linux shop, just go ahead a buy Exchange. Why buy an Exchange knock off when you can have the real thing.

On the other hand, if you want to save your company $thousands, Zimbra's FOSS edition is an excellent Exchange alternative.

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Re: Cisco buys PostPath, targets Microsoft Exchange

Posted by: Anonymous [ip: 63.148.191.50] on August 28, 2008 03:30 PM
For my company to upgrade from Exchange 2003 to Exchange 2007 is going to cost somewhere in the region of $2 million (it doesn't sound as bad if you say $166 a mail box I guess). I'm glad that cheaper and free alternatives exists; it will help keep Microsoft competitive.

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Cisco buys PostPath, targets Microsoft Exchange

Posted by: Anonymous [ip: 82.210.118.139] on August 28, 2008 10:58 PM
To get relevant market adoption for Exchange killers it is interesting to see how the opensource MAPI alternatives will develop like Openchange and Zarafa (when they have opensourced their full mapi stack).

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Potentially misleading sentence in article

Posted by: Anonymous [ip: 217.154.95.72] on August 29, 2008 10:11 AM
"While PostPath is the only Exchange challenger that has used reverse-engineering to challenge Microsoft, its approach may be adopted by other open source companies."

Makes it sound like PostPath is an open source company, which it isn't. A better way of putting it would be, "its approach may also be adopted by open source companies". Other things it isn't : significantly cheaper than Exchange. Their detailed price comparison is both enlightening and amusing.
Also I don't really see why the buyout of a proprietary software company by another proprietary company is particularly interesting.

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Cisco buys PostPath, targets Microsoft Exchange

Posted by: Anonymous [ip: 121.72.185.159] on August 30, 2008 09:23 AM
It's particularly interesting because the list of BIG players who are publicly declaring their hatrid of Microsoft is now a VERY impressive list. IBM, HP, Novell, ASUS and now Cisco one of the BIGGEST names in I.T. full stop. In addition to that Post Path may not be open source but it gives people the opportunity to run a server running something OTHER than Microsoft Windows Server, just because they want a mail server that does the things Exchange does. One of the big things holding Linux back as an OS for servers was it's ability to run small to medium sized offices. It's ALWAYS been viable for web servers, file servers etc but it's never been particularly viable (Unless the I.T. manager HAPPENS to be a Linux Junkie and therefore MAKES it happen) as a server OS for a small to large company.

Now that we have Post Path and Scalix, (IMHO the two best Exchange imitators) the world of Linux Servers for Small to medium offices has grown to an extremely large potential level. As someone who runs an I.T. company that provides all sorts of services I'm extatic to see this. As of the last few months I can actually offer my customers a fully Linux setup in their offices. I can offer a Terminal Server solution, Mail Server, File Server, VPN Server Endpoint and a Database server, all on free OS's even if they still need to pay for MySQL Enterprise and Post Path or Scalix Enterprise.

I also can't wait to see what Cisco does with Post Path, they've now openly said they're pissed off at Microsoft so let's see how far they can push this to actually cause Microsoft Exchange problems.

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