Avaya in Talks to Buy Radvision for Video Collaboration: Report

 
 
By Jeffrey Burt  |  Posted 2011-12-13 Email Print this article Print
 
 
 
 
 
 
 

Avaya reportedly is looking to buy Radvision for $200 million in a move that would put it into competition against Cisco and Polycom in a fast-growing market, according to a report.

Unified communications vendor Avaya reportedly is negotiating to buy Radvision, which makes video conferencing solutions for IP and 3G networks.

In a Dec. 13 report, Israeli business publication Globes said "sources" indicate that Avaya is in "advanced talks" to buy Radvision for about $200 million, a move that would enable Avaya to expand into a new market and compete with video conferencing heavyweights like Cisco Systems, Polycom and Logitech's LifeSize Communications business.

At the same time, there also is the possibility that other vendors could jump into the bidding for Radvision, which reportedly has been struggling since Cisco, its largest customer, bought Tandberg for $3.3 billion in a deal that was announced in 2009 but closed last year. That deal gave Cisco a larger product portfolio for midmarket customers, an area in which the company was lacking.

Video conferencing and collaboration is a rapidly growing market that is expected to gain steam over the next few years as businesses look for ways to not only reduce expenses-particularly travel costs-but also to improve employee productivity and develop new ways to communicate with workers, partners and customers.

In a report Dec. 12, market research firm IDC said the enterprise video conferencing and telepresence market in the third quarter grew 24.3 percent over the same period in 2010, with revenues jumping to $680.4 million. In three of the past four quarters, the space grew more than 20 percent, IDC analysts said.

"Only recently have enterprise networks and videoconferencing technology, epitomized by HD and telepresence systems, been capable of delivering collaboration experiences worthy of initiating a video session, versus having a conference call or hopping on a plane," Rich Costello, senior analyst of IDC's Enterprise Communications Infrastructure unit, said in a statement. "IDC expects major revenue growth in this market to continue over the next five years, bolstered by a significant impact from unified communications, collaboration applications, telepresence systems, and desktop and mobile devices supporting video."

Cisco leads the market with 51.6 percent share-it was 48.4 percent in the third quarter of 2010, according to IDC. Polycom saw its revenue grow 19.4 percent in the third quarter and has seen revenue growth of 19 to 26 percent every quarter since the first quarter of 2010.

By contrast, Radvision has struggled in recent months. In October, Radvision executives said that the company lost $7.4 million in third quarter, with revenues falling to $17.3 million from $24.5 million the same period last year.


Radvision's decision last year to buy video conferencing hardware assets from OEM partner Aethra for $10 million, in hopes of making up for some expected losses from Cisco's acquisition of Tandberg, didn't pan out and Radvision has continued to struggle.

Globes said that Hewlett-Packard last year was in negotiations to buy Radvision, but that those talks fell apart over the issue of price. HP this year sold its video conferencing and telepresence business to Polycom, a move that Polycom officials expect with enable it to compete even more closely with Polycom.

"Polycom clearly has Cisco in mind as it builds its video strategy," Forrester Research analyst Henry Dewing wrote in a blog post at the time fo the deal. "It plans to compete with Cisco by offering a broad, more open set of capabilities that even encompass interoperability with Cisco's own Telepresence Interoperability Protocol (TIP). With HP, Juniper, Microsoft and others as partners, Polycom has aligned a remarkable cross-section of vendors to deliver open, cost-effective video (and broader unified communications) solutions that enable multivendor, cross-carrier, intercompany communications. Going toe-to-toe with Cisco is a daunting challenge, but Polycom is ready to take it up."

As part of the deal, Polycom is now HP's exclusive partner for telepresence and video collaboration products. 

 
 
 
 
 
 
 
 
 
 
 

Submit a Comment

Loading Comments...
 
Manage your Newsletters: Login   Register My Newsletters























 
 
 
 
 
 
 
 
 
 
 
Thanks for your registration, follow us on our social networks to keep up-to-date
Rocket Fuel