Cisco, Salesforce Announce Cloud Integration

By Austen Hufford 

Network equipment maker Cisco Systems Inc. and software company Salesforce.com Inc. said Thursday they would jointly develop and market products that use each other's offerings, as both companies work to build their cloud businesses in an increasingly competitive field.

Cisco and Salesforce plan to work together to integrate their platforms focused on, among other things, customer service and the internet-of-things, a nascent field connecting everyday items, such as lightbulbs, to the web.

Cisco said the move would "eliminate the friction users experience today, " and Salesforce said it would "simplify the customer experience."

Examples of the collaboration between Cisco and Salesforce include customers being able to communicate over chat or video without having to toggle between apps, as well as a fleet of Cisco-connected trucks being able to pass data to the Salesforce cloud.

Providers of cloud services are faced with a balance between opening up their services and making it easier to integrate with competitors products, while also siloing their services to keep tight hold on their current subscribers and their data.

The integration deal is the latest collaboration between potential competitors in the increasingly crowded cloud-services field, which includes offerings from Microsoft Corp., Alphabet Inc., Amazon.com Inc. and Oracle Corp.

For Cisco, its users are increasingly using cloud services like those offered by Amazon, instead of in-house data and computing centers built with Cisco's hardware. In response, Cisco has adopted a strategy of acting as an intermediary between companies and operators of such services, instead of offering its own on-demand computing over the internet.

The agreement announced Thursday also comes a year after Cisco hired a Salesforce executive to be its chief digital officer.

For Salesforce, the integration is notable for not being an acquisition. This summer, Salesforce lost a bidding war for LinkedIn Corp. to Microsoft, and it has been ramping up its buying activity. In June, the company said it would buy e-commerce platform Demandware Inc. for $2.8 billion, its largest deal to-date.

In addition, Salesforce is facing increasing pressure from Oracle, which reported a 59% increase in total cloud revenue in its most recent quarter and is aggressively pushing further into the cloud business.

Shares of Salesforce rose 1% to $74.94 in morning trading in New York, as Cisco shares added 0.5% to $31.53.

Write to Austen Hufford at [e-mail]

(END) Dow Jones Newswires

September 22, 2016 10:30 ET (14:30 GMT)

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