Last week, Cisco Systems (CSCO), a top player in videoconferencing and other collaboration tools, announced a number of new products intended to keep it ahead of the pack. Among them: The DX70 and DX80 all-in-one “desktop collaboration devices,” which combine a monitor, video camera, and phone in one device. The devices, which are priced at less than $1,000 and less than $2,000, respectively, are intended to expand the range of products Cisco offers corporate users, the company said.

But the more interesting and significant news had nothing to do with hardware. Cisco announced a cloud-based videoconferencing service that lets users collaborate with each other from any device, Cisco-made or not.

“We’re starting to push the barriers where Cisco hasn’t necessarily been in the past,” says Peder Ulander, a vice president for Cisco’s collaboration solutions division. “We’re solving for interoperability and for different price points.”

Cisco’s new offering, dubbed Collaboration Meeting Rooms, is a tacit acknowledgment that the videoconferencing world is heading into a more software-based reality. In the last few years, the collaboration category has shifted from big, proprietary, and costly hardware to more interoperable, web-based solutions. Lower-cost systems are key to attracting new customers, companies involved in the category believe, as is a software-as-a-service, pay-per-user model that gives customers the ability to conference with each other without being tethered to a particular location or device. Yet despite Cisco’s prowess in the collaboration tools market — the networking giant has made several large acquisitions in recent years, including WebEx and Tandberg — it’s not the first company to jump in to this new, cloud-based world. Not by a long shot.

“Now Cisco is playing catch up and once again they are shooting behind the duck,” Krish Ramakrishnan, co-founder and CEO of Blue Jeans Network, a competitor to Cisco’s videoconferencing business, told Fortune. “What they claim they will deliver six months from now sounds similar to what Blue Jeans first offered three years ago, but with a lot more complexity and restrictions to make it fit into the Cisco view of the world.”

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Ramakrishnan, a former Cisco executive, hasn’t exactly shied away bringing attention to his former employer’s weaknesses. Blue Jeans was conceived to offer a cloud-based, interoperable alternative to Cisco’s line of videoconferencing products. For its part, the larger company says it’s got several advantages, including the proven ability to scale its technology, years of investment in audio and video quality and its nearly 20 data centers around the world.

Of course, Blue Jeans isn’t the only startup Cisco has to contend with. From StarLeaf to Vidyo to Fuze, there are a growing number of smaller, more nimble companies trying to take a bite of Cisco’s pie. And more are on the horizon.

Bigger players are also getting in on the action. LifeSize, owned by Logitech International (LOGI), also just announced its own cloud-based videoconferencing service. Microsoft (MSFT) now owns Skype and Google (GOOG) has a growing line of videoconferencing capabilities and products for business customers.

Collaboration is just a side business for Cisco, but it’s a sizable one. It’s also one that’s on the decline: Total collaboration business revenue declined 12%, to $892 million, in the company’s most recently reported quarter. Cisco is convinced it can not only catch up, but lead.

“We’re really pushing the envelope,” Cisco’s Ulander says. “It’s not the same old Cisco I think everyone’s used to.”