Cisco ( CSCO Quick Quote CSCO - Free Report) is striving to fortify its video conferencing platform, Webex, in a bid to capitalize on the work-from-home wave and online-learning trends, and strengthen competitive prowess in the video conferencing space. The company recently concluded the acquisition of BabbleLabs aimed at enriching video meeting experience with advanced speech enhancement and noise removal technology. Markedly, the general availability of BabbleLabs technology, which is currently in customer trials, for Webex Meetings desktops and select Webex Room devices is slated for October. Rationale Behind the Deal
BabbleLabs is a privately-held company, with expertise in noise removal and speech improvement technology. The start-up uses Artificial Intelligence (AI) to identify and eliminate background noises (on a real-time basis) in order to boost the communication experience.
The BabbleLabs buyout will help Cisco elevate the video meeting experience for its Webex users, who are looking for ways to deal with background noises as they adapt to remote working situation induced by the coronavirus outbreak. Synergies from BabbleLabs’ acquisition are expected to aid Cisco in sustaining the momentum of its Webex offerings that have gained a significant traction this year due to the remote working trend. Notably, in the fourth quarter of fiscal 2020, Webex solutions witnessed double-digit growth. The surge in users bodes well for the company’s top-line growth. Webex Enhancements Amid Video Conferencing Boom
The coronavirus crisis-led led work-from-home wave has triggered demand for teleconferencing, workspace collaboration and telehealth services. This has bolstered the adoption of video meeting and conferencing solutions.
With this trend unlikely to go away soon, the video conferencing market is likely to witness a CAGR of 9.9% between 2020 and 2027, per a Grand View Research report. Per a report from Global Market Insights, the market is expected to be more than $50 billion by 2026. In a bid to capitalize on the video conferencing boom, Cisco is strengthening Webex with new added features and acquisitions to improve its competitive position in the market. The company has integrated Cisco Spark with Webex Platform, which enhanced Webex Meeting and enabled it to introduce Webex Teams, thereby strengthening its enterprise collaboration portfolio. Moreover, Cisco updates its Webex portfolio on a monthly basis to aid users enhance productivity with advancements in video conferencing. Per a September 2020 update, the company is introducing a refurbished experience for collaboration and in-user meeting, making it more intuitive for participants. The new features include a bigger audio/video preview window, optimized meeting experiences with more panel controls, and increasing the options for virtual background images, making the meeting experience easy and immersive. Likewise, the company is well poised to enhance the Webex Assistant service with AI-based voice-recognition and transcription capabilities from the Voicea acquisition.
Further, the integration of AI and ML capabilities into enterprise collaboration solutions is anticipated to increase productivity of users and improve engagement. This, in turn, will likely bolster adoption of Webex Meetings, Webex Devices and Webex Teams.
Apart from BabbleLabs, Cisco had acquired Voicea in September 2019. Voicea has provided AI-enabled transcription feature to Webex solutions. Remarkably, the company also unveiled a design update for Webex, including dedicated tabs for messages and contacts, which enhanced its functionalities and made it easier to use. Also, the company’s collaboration with Alphabet’s ( GOOGL Quick Quote GOOGL - Free Report) Google G Suite to ensure inter-operability between Webex and Hangouts is promising. Competitive Scenario
These endeavors are expected to help Webex bolster its subscriber base, and impart it an edge over competitors like Zoom Video Communications (
ZM Quick Quote ZM - Free Report) and Microsoft’s ( MSFT Quick Quote MSFT - Free Report) Teams app. Zoom Video is undeniably the biggest gainer of the coronavirus-induced work-from-home trend. Notably, the company had 988 customers, contributing to more than $100,000 of trailing 12 months’ (TTM) revenues, in second-quarter fiscal 2021. To up its ante, Microsoft added new background scenes like conference rooms, auditoriums, and coffee shops to the Together Mode on the Teams App. Additionally, the company added custom layouts that will permit the presenter to choose how his/her video feed and presentations appear to others in the App meetings. By the end of this year, Microsoft plans to increase Teams meetings’ ability to support 1000 attendees for a full meeting experience as well as offer only-view support for meetings with more than 1000 and up to 20000 attendees. Nevertheless, Webex’s better security options and its end-to-end encryption capabilities are likely to help Cisco increase its presence in the enterprise video conferencing market. Currently, Cisco carries a Zacks Rank #3 (Hold). You can see . the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here 5 Stocks Set to Double
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