Cisco today announced its acquisition (which is expected to close by the end of October) of email and calendaring startup, PostPath, for the princely sum of approximately $215 million. The PostPath offering is Linux-based, and has been designed to drop into a Microsoft network as an alternative to Exchange, with the company claiming to offer an easier migration path from Exchange 5.5 to PostPath than from Exchange 5.5 to Exchange 2007.

This acquisition is a logical step for Cisco, which acquired conferencing vendor WebEx in May 2007, followed by policy management vendor Securent in November. Cisco wants to be a major competitor in the collaboration software market, leveraging its communications background to move up the business software stack. With the exception of its small business email offering WebEx Mail, email and personal calendaring has been a noticeable weak spot in the Cisco portfolio, and by building the PostPath technology into the SaaS-delivered WebEx Connect product (which is gradually becoming the platform for all things collaboration at Cisco), the acquisition means it can offer an alternative to customers, and further fleshes out the Cisco collaboration stack.

The previously stagnant email market has seen a flush of activity recently, with hosted email services such as Google's Gmail introducing increasingly viable alternatives to the costs of maintaining an in-house Exchange environment. While it is unlikely that players such as Google and Cisco will making a major dent Microsoft's Exchange market share in the short term, the competition can only be healthy, and at least prompt Microsoft to address the challenges posed.

I have yet to speak to Cisco directly about the acquisition, so I remain quite speculative about how significant a role the company sees this technology playing in the overall collaboration portfolio. $215 million is a considerable purchase price, although it pales into insignificance next to the $3.2 billion the company paid for WebEx last year. Whether the value of the PostPath technology will justify that investment however, remains to be seen. Integration is a key factor in the WebEx Connect strategy, so it will be interesting to see how effectively Cisco can leverage the PostPath features across the breadth of the collaboration portfolio, rather than simply adding a check in the "email and calendaring" box. For organisations considering hosted collaboration offerings such as WebEx Connect, this acquisition could make Cisco a more interesting proposition, especially if Cisco can leverage the Exchange migration strategy touted by PostPath in combination with both PostPath's and WebEx's Outlook integration.