I have felt that someone needed to buy Radvision. I wasn’t sure who, but it seemed like a beauty without a date.
- Cisco has been all about video for several years now. They are the number one or number two market share leader in North America depending on the year.
- Polycom has been on a tear for several years. Although its stock has been down for the past several months, it was basically straight up since 2009.
- Microsoft, (Skype), Apple, and Google are all going for a video grab – significant improvements and updates in the past few years.
So clearly we are seeing a picture emerge around video. I myself have a video phone, two webcams, and a HD fancy camera (Lifesize) pointed at me right now. I don’t even work in an office, and I’d say I do about 2-3 video calls a day. Not to mention most of our smart phones and tablets have two cameras on them too.
Now hold that thought.
Avaya thinks they do video too. You can’t talk about/or/with Avaya for more than 15 minutes without the Avaya Desktop Video Device coming up. The company is betting the future will be about SIP, mobility, and Flare – and the Avaya Desktop Video Device is central to that vision. Central? ok, the only video solution the company brands. (although I think there is some relationship with LifeSize).
Avaya used to sell a desktop video phone that was branded Avaya but made by Tandberg, but for some reason that deal seemed to fall apart after Cisco acquired Tandberg. The problem with the Avaya Desktop Video Device is it is not particularly great at being either a desktop or video device. It’s a fine device – I rather like like it – but it doesn’t pretend to be a highend desktop or conference room video system. It is a big mobile tablet optimized for video mobility.
Now hold that thought.
Radvision was on top of the world in 2009. The company had some great technology and an amazing partner – Cisco. What can possibly go wrong?
Again that acquisition of Tandberg by Cisco caused some problems and put Radvision into a tailspin. The task of replacing Cisco wasn’t so easy as most vendors were already in bed with Polycom. But that didn’t stop Radvision from engineering great products – have you seen their SCOPIA solution? I love the fact that I could control the deck during my Scopia presentation. It was hands down one of the best video demonstrations I’ve had. They took that concept to the iPhone too. Unfortunately, few others saw the demo.
Radvision’s stock got cut in half the day Cisco announced its intention to acquire Tandberg (Oct 2009). In fact, about the same value as it was a few weeks ago. It’s more than recovered now.
So, I think this all makes sense. The industry is embracing/accepting/requiring video, Avaya needs a video partner, and Radvision has some good tech and (was at) a low price. So no one should be surprised. Nice theory.
For one, as Eric Krapf wrote: “Furthermore, at the recent Avaya partner conference in Las Vegas, Kevin Kennedy conceded that the video marketplace today is largely a Cisco-Polycom duopoly, and hinted that Avaya might not make a head-on attack on this market.”
Then there is the issue that Avaya is losing money and in debt. They used $300M in cash last year and have only $400M on hand, not to mention a ton of debt from its Nortel acquisition that is coming due. From my perspective, they have a bit of indigestion from swallowing Nortel. Of course, if they do buy Radvision, no one said it has to be a cash deal.
Radvision isn’t alone – Vidyo and LifeSize are video focused too. Lifesize is now part of Logitech. Logitech is a big firm and a major player in webcams. I don’t get the impression they are hurting. Vidyo has been slighted by both HP and Google. HP dumped Vidyo for Polycom and Google’s interest in Vidyo subsided when it bought ON2. So in addition to competing with Polycom, Cisco, and Lifesize in the market, Radvision also has to compete with Vidyo on being acquired. Despite Avaya’s losses, some equity and assistance from Silver Lake may be compelling enough to skip the cash requirement on a buy-out.
I can see everyone involved winning with this.