Lifesize Sees Growth 2 Years After Move to the Cloud, CEO Says

After "two years of pain," transforming the company from a hardware provider to a software app vendor is paying dividends, CEO Craig Malloy says.

Lifesize CEO

The enterprise collaboration space is one that is rapidly shifting and changing as established vendors work to adapt to the growing demands for software- and cloud-based offerings from customers who themselves are dealing with everything from an increasingly mobile workforce to the cloud to the proliferation of connected devices.

The market continues to consolidate through acquisitions, other companies are mulling their futures, and smaller pure-play cloud vendors and startups are looking to grab share from their larger brethren. And the changes promise to continue as the space continues its ongoing shift to the cloud.

Craig Malloy understands what those vendors are going through. Malloy returned to video conferencing vendor Lifesize in 2014, 11 years after founding the company and after a three-year hiatus away from it. He quickly began to remake the vendor, transforming it from a company that sold legacy conference room communications equipment to one that embraces the cloud with a software-as-a-service (SaaS) model.

"The world was beginning to change in 2012," the Lifesize CEO told eWEEK. "Everyone was beginning to move to a cloud deployment model."

What followed was what Malloy called "two years of pain." During that time, Lifesize slashed its workforce in half, from 550 employees to 250, and its operating expenses from $142 million to $52 million. The company had to shift more to a recurring revenue model and away from just earning money by selling equipment, and in December 2015, after raising $17.5 million from investors, Lifesize spun out of Logitech, which had bought the company in 2009 for $405 million.

Despite the turmoil, the transition is paying off, according to Lifesize officials. Two years after launching its cloud-based video conferencing application, the company has seen the number of paid customers reach more than 3,200, and is adding more than 140 new paying customer accounts each month.

There has been a 340 percent year-over-year growth in registered individual users making calls, a 200 percent increase in weekly minutes per call and a 190 percent jump in weekly paid calls.

"The cloud service deployment model has changed everything," Malloy said.

Along with the Lifesize Cloud app, the company also sells a lineup of Icon Series conference room cameras and Phone HD phone systems. According to Lifesize, 75 percent of customers buy and pair conference room cameras to the cloud service.

The cloud unified communications (UC) market continues to grow. IHS analysts said that last year, worldwide revenue for cloud video conferencing services hit $281 million, a 25 percent year-over-year increase. A survey by Broadsoft, a UC-as-a-service (UCaaS) vendor, predicts that the cloud UC market penetration will grow by almost six times between 2015 and 2020, when it will account for about 41 percent of the overall UC space (it's at about 7 percent currently).

Malloy also has seen anecdotal evidence of the shift to the cloud. At a visit to customer SurveyMonkey, he said that almost every conference room had a Lifesize system in it. It's an indication that the cloud and new innovations are making it easier for organizations to use video conferencing in any meeting area, not just in rooms dedicated to the technology. It's a differentiator for Lifesize against the likes of Cisco and Polycom, while being able to support large numbers of people and running its software on a broad range of legacy systems can help it compete with the likes of Vidyo, Blue Jeans Network and Zoom.