Cisco's (NASDAQ:CSCO) deal to buy Latitude Communications (NASDAQ:LATD) is a look back to the future. Beginning in the early-1990s, Cisco built its router empire through skillful acquisitions -- typically of small companies.

Like many others, though, Cisco fell into the black hole of mega deals during the late-1990s and has been cleaning up the mess since. Unlike many others, Cisco has more than $20 billion in the bank and a hefty market cap to do deals.

So, on the one hand, the $80 million cash deal for Latitude may seem inconsequential. But don't be fooled: In fact, it was a very sound move and an absolute steal for Cisco.

More than ever, businesses need to communicate -- whether with employees, partners or prospects -- and online solutions are much cheaper. Nifty features like video, document sharing, and scheduling make virtual meetings much like meeting in person.

In fact, Latitude developed its product to make it easy for Cisco to integrate, since it can be used seamlessly with Lotus Notes, Microsoft Outlook, Sametime instant messaging, and CallManager (which allows scheduling through Cisco's IP telephones). What's more, Cisco can rapidly scale the Latitude product through its immense distribution network.

Don't forget, earlier this year, Microsoft purchased Web-based conferencing company PlaceWare (rumors indicate a price tag of roughly $200 million). Here's the difference: For Microsoft, the business is a natural extension of its operating system. For Cisco, it is an extension of IP communications. Conferencing sells operating systems; it also leads to more demand for routers.

Either way, the conferencing industry has two new major players. This validates the market, but puts incredible pressures on the remaining independents, which include Raindance Communications (NASDAQ:RNDC), WebEx (NASDAQ:WEBX), Centra (NASDAQ:CTRA), and Radvision (NASDAQ:RVSN), not to mention a smattering of privately held outfits.

This is a win for Cisco. In light of the new landscape, it might behoove the independents to call their investment bankers (could be on a Cisco phone) to find a dance partner fast.

Can't offer a video call, but you can certainly talk this over on our Cisco discussion board. Tom Taulli is the author of six books on investing and finance, such as the Complete M&A Handbook (Random House). You can reach him at tom@taulli.com.