8/28/2007 -- To look at last week's love-fest between Cisco Systems Inc. and Microsoft Corp., you wouldn't think that both vendors are nominal competitors in the red-hot network access control (NAC) market segment.

But last week's event -- in which Cisco CEO John Chambers and Microsoft CEO Steve Ballmer were interviewed by journalist Charlie Rose and sat in on a roundtable discussion with joint customers -- was precisely about competition.

At bottom, both Cisco and Microsoft seem anxious to downplay the potential for competitive fractiousness -- in NAC and other market areas -- and instead emphasize collaboration and interoperability. To a degree, analysts say, both companies have succeeded in doing just that.

"Our overall goal here is to make very clear to our customers that despite our competition in some areas, customers remain our overall focus," said Chambers in a statement. "We need to articulate more clearly how and where we are working together to minimize interoperability challenges. Our customers are demanding this, and when customers talk, we listen."

Three years ago, Cisco more or less kicked off the NAC market with its first-ever NAC deliverable. Microsoft quickly followed suit, announcing its own spin on NAC: a not-so-subtly branded Network Access Protection (NAP) effort. Both companies have tried to build bridges between their competing, and self-interested, NAC visions, even as they've started to compete in other areas, such as in the enterprise call center and call management sector.

Last week, Cisco and Microsoft pledged to promote improved interoperability between their products, collaborate to develop industry standards and even offer joint consulting services to customers. While there was a lot of hype surrounding last week's Chambers-Ballmer summit, it was nevertheless significant, say industry watchers: It involved an acknowledgement on both sides that they are competitors, but also emphasized the reasons why both companies need to collaborate and interoperate with one another.

"The partnership does not preclude continued competition between the two giants, but it does offer customers assurances that they will be able to mix and match solutions from either vendor," wrote Andrew Braunberg and Glen Hunt, analysts with market watcher Current Analysis.

There's a lot to like about last week's schmooze-fest, Braunberg and Hunt continued. First, it helped emphasize the history of collaboration between both Cisco and Microsoft.

"The two companies have been collaborating for over four years and at a high level. The partnership focuses on ensuring interoperation within their implementations and supporting the speed and broad base of change that is occurring in the many industries that their products interact," they said.

In this respect, there's good reason to believe that Cisco and Microsoft will make good on their promise to ratchet up interoperability.

"Customers want assurance that the applications and network solutions that they source from Cisco and Microsoft will interoperate and that each company's future product offerings will be able to work together in a consistent manner," Braunberg and Hunt wrote. "The issues addressed include everything from the data center to the end user application."

There's a further wrinkle here, too, according to Braunberg and Hunt: The Cisco-Microsoft accord is also aimed at Google, which is increasingly emerging as Microsoft's newest -- and perhaps most formidable -- bete noire.

"While clearly customer-driven, the expanding cooperation between the companies also provides a more unified front against Google, which has increasingly apparent designs on the security market, among others that Cisco and Microsoft play in," they wrote.

While Chambers and Ballmer said the right things and, to a degree, backed up their pledges with demonstrable action items and a highly specific roadmap, they've still got their work cut out for them.

"More needs to be done, for example, to bring together Cisco NAC and Microsoft NAP. More broadly, the agreement to collaborate on areas ranging from security to network infrastructure optimization will help customers reduce costs by deploying solutions that combine Microsoft and Cisco products in a consistent way," Braunberg and Hunt concluded. "The two companies have been cooperating for the past four years; the new partnership framework will help assure customers that they can choose the best-of-breed solutions to meet their requirements." --Stephen Swoyer