Polycom Ramps Up Cisco Competition with HP Video Collaboration Buy

By Jeffrey Burt  |  Posted 2011-06-01

Polycom Ramps Up Cisco Competition with HP Video Collaboration Buy

Polycom is buying Hewlett-Packard's video collaboration business and expanding its partnership with Microsoft as it looks to bolster its competition with Cisco Systems in the fast-growing visual communications market.

The moves, announced June 1, came at the same time that Polycom officials said they were partnering with a wide range of service providers-including AT&T, BT Conferencing, Global Crossing, Orange Business Services and Verizon-to create a consortium designed enable interoperability and connectivity across service provider networks. The goal of the OVCC (Open Visual Communications Consortium) is to enable greater business-to-business communication via telepresence and video collaboration technologies through disparate devices and over various networks.

In a Webcast news conference, Polycom CEO Andrew Miller said Polycom's goal is to meet the demand coming from business customers for better video collaboration tools, open networks and greater and easier video collaboration with their partners. For Polycom, the moves will quickly broaden its set of offerings and its potential customer base, and grow the company's ever-expanding list of partners, which executives said is a key differentiator as it competes with other vendors in general and Cisco in particular.

"Polycom clearly has Cisco in mind as it builds its video strategy," Forrester Research analyst Henry Dewing wrote in a blog post. "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."

In the HP deal, Polycom is acquiring all of HP's visual communications business, including its Halo telepresence products, as well as its managed services. In addition, Polycom and HP are entering into a partnership where Polycom will be HP's exclusive partner for telepresence and video collaboration products. The two companies also agreed to put Polycom's video collaboration technology onto HP's webOS mobile platform, which will include future smartphones and the upcoming TouchPad tablet.

It is that strategic relationship that is key to Polycom, according to Roopam Jain, an analyst with Frost & Sullivan.

"Polycom already owns all the technology components that HP's video conferencing business brings to the table and probably in a much more robust way, so this is clearly a potential customer acquisition and market growth move," Jain said in an email to eWEEK. "That itself opens up immense opportunities for Polycom to get access to HP's vast distribution channels and sales team to sell Polycom gear to HP'S huge customer base. Considering that video conferencing despite all the hype remains a significantly under-penetrated market, think of the all the sales opportunities this could generate for Polycom among HP's current customer base that's already investing in networking, storage and managed services."

Polycom's Miller noted that HP's Halo products and managed services already touch 425 blue-chip customers in 36 countries. Shane Robison, executive vice president and chief strategic and technology office at HP, said the company is excited about the possibilities of Polycom technology on the webOS devices, which should have later this year.

"All of these platforms [including tablets and smartphones] are new opportunities for this joint venture," Robison said during the press conference.

Polycom Ramps Up Cisco Competition with HP Video Collaboration Buy

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For HP, the deal-expected to close in the third quarter-means it can free itself from a telepresence business that was struggling to gain traction against Cisco, Jain said. HP last year teamed up with Vidyo in hopes of gaining ground, but that didn't seem to help.

"Competing with giants like Cisco and Polycom in the [video conferencing] market was not easy for HP," she said. "Halo had not seen the same success as its competitors. It makes sense for them to get out of a business that's not a core competency, in a market that's becoming intensely competitive."

With Microsoft, Polycom is expanding its relationship with the software giant through a project called "Rally" in which Microsoft's Lync UC (unified communications) technologies will be able to connect with Polycom endpoints via the Lync UI. Gurdeep Singh Pall, corporate vice president and head of UC at Microsoft, said the two companies will preview Rally at Microsoft's Worldwide Partner Conference in July, and that the first products stemming from the initiative will ship in the fourth quarter.

The creation of the OVCC is another step in Polycom's efforts to create greater interoperability within the video collaboration space. After initially pushing back at Cisco TIP effort to create a protocol for interoperability among video communications systems, Polycom officials in February announced they would adopt the specification. The OVCC is a natural progression down the same path, Polycom officials said.

By creating a common platform, Polycom and the various service providers would enable businesses that use different providers and technologies to communicate easily and without networking or compatibility issues, with the capabilities delivered via the cloud through the service providers. According to Joe Zarb, vice president of emerging technologies at Polycom, the company and service providers have been talking for a year about creating the consortium.

Scott Stevens, vice president of worldwide technology at Juniper Networks, another OVCC founding member, said that in an industry that is demanding greater integration, openness and interoperability among collaboration technologies, partnerships are key. As an example, Stevens said the tight integration between Polycom and Juniper products outperform those from Cisco.

Polycom's Miller said the OVCC is not a closed consortium; many other service providers want to join, and he said he is hoping Cisco will as well. Products and services from the OVCC could start hitting the market as early as the fourth quarter, he said.

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