I recently attended Polycom analyst event in New York. The event took place just after the completion of its acquisition by Siris Capital. Mary McDowell was present and available to introduce herself as the new CEO. Session presentations included portfolio review, road map, and demonstrations of secret upcoming solutions.
Here are few summary points.
- Polycom is between a competitive rock and hard place. It’s powerful partner Microsoft largely values Polycom for its hardware. This is forcing Polycom into a peripherals competition with companies like Logitech that utilize a high volume/low margin channel. On the other hand, the competitive pressure from Cisco is to create end-to-end, integrated solutions that include premises-based and cloud-delivered services. Across that end-to-end spectrum lies many more specialized vendors that offer “best-of-breed” components. The obvious answer is for Polycom to simply focus – the harder question is where?
- Video is exploding: The excuses are over. Bandwidth is cheap. Cameras are everywhere. Core functionality is cost effective, reliable, and accessible. Younger users that are getting older get it.
- Video tech is exploding: 4K video, H.265, VP9, LTE, biometrics, microphone arrays, touch-screen displays, and more.
- WebRTC is past the hype: It is not the replacement technology many were expecting, but it is now assuming an important and useful role as a valuable tool and client approach.
- The Tech is disappearing: Each of these companies are simplifying their solutions and making the tech less visible and more accessible. Examples: Polycom’s EagleEye technology that automates camera work, Cisco’s approach with automatic detection of a user via their smartphone, Pexip’s auto spin up/down of virtual resources, and Vidyo’s approach to integration with devices and applications.
Regarding Polycom specifically, I left PACE feeling much better about its future than when I arrived. I was expecting the Mitel-Polycom merger to complete, though was never a big fan of it. It somehow made sense to bean counters, but the two companies did not feel that complementary to me. Instead Siris swooped in and killed the merger. Instead of adopted step child, Polycom gets to remain independent and now as a private company. This gives Polycom space to re-invent itself – that’s dangerous criminal behavior for public companies.
Why does Polycom need to re-invent? Because the world won’t hold still. Polycom is a pioneer in audio and video – two industries that are in a tornado.
- Competitor Cisco is heading for the cloud with a new service that leverages WebEx.
- Speaking of cloud there’s also new types of competitors everywhere including Zoom and Facebook plus some 643 WebRTC-based startups. Each part of the solution (endpoints, cameras, MCUs, cloud services, MS components, etc.) has a full bench of emerging companies.
- Polycom is caught between two simultaneous transitions: prem to cloud and hardware to software. Then there’s also added complexity from its partnership with 800-pound-gorilla Microsoft which sometimes forgets the spirit of partnership.
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