Cisco Systems (NASDAQ:CSCO) is picking its battles these days. That doesn't mean that the company is getting shy, though -- Cisco is simply tackling hand-picked 900-pound gorillas.

Cisco is thinking about how to stretch its dollar, specifically the return on $3.2 billion invested in online communicator WebEx. The WebEx platform seems ideal for building online collaboration products, so Cisco SVP Doug Dennerline and his team told attendees at this year's Cisco Live conference that they're thinking about a WebEx-fueled office suite.

That could mean that we're about to get a Cisco-powered online office suite to rival the best that Microsoft (NASDAQ:MSFT) Office can offer. Add one more serious rival to the time-honored office suite, alongside Google (NASDAQ:GOOG) with its Google Apps, the privately backed Zoho suite, IBM's (NYSE:IBM) Lotus Symphony, and many more. This market looks ripe for the picking, and a WebEx-powered incarnation of word processors and spreadsheet apps would bring intriguing possibilities.

WebEx has always been great at online messaging and information-sharing, so it's not a large leap to make. I'd imagine that this product, if it comes to market, would compete more with the Google Wave messaging portal than with Docs -- or perhaps tie into it under Wave's wide-open platform. Together, they'll keep putting the screws to Microsoft Office; threatening its near-monopoly on business users and introducing new collaboration features it currently lacks.

And of course, Cisco isn't above buying its way into new markets. Imagine the fireworks you'd get if Cisco paired WebEx up with Zoho, or perhaps took OpenOffice off Sun Microsystems' (NASDAQ:JAVA) hands so Oracle (NASDAQ:ORCL) can wash its hands of that open-source suite. Smiles all around, I'm sure.

Don't expect Cisco to start renting out computing power, though. Cloud-based infrastructure is all the rage at IBM and Amazon.com (NASDAQ:AMZN), but Cisco isn't interested in following them to Cloud Nine. CTO Padmasree Warrior noted that Cisco is happy to become a partner in cloud-building projects, but isn't interested in hosting its own pay-as-you-go computing cloud service. The opportunity isn't big enough for Cisco.

I don't agree with that assessment at all, but it's easy to see why Cisco would prefer selling servers and routers into these clouds instead of hosting them internally. You're getting fewer headaches that way, Cisco, but you're also passing up some stellar opportunities here. You can help me tell Cisco why they're wrong in the comments box below -- or take the company's side if you want.

Further Foolishness: