Conferencing and Collaboration


Blog archive - June 2011

Use the blog to discuss and comment on the latest industry insights provided by our analyst experts.


Polycom Delivers a Powerful Punch - Acquires HP's Videoconferencing Business

by Roopam Jain 01 Jun 2011 | Add Comment

Yet another major acquisition news came out this morning. Polycom announced that it will acquire HP’s Visual Collaboration Unit including the Halo products and managed services, ending HP’s not so successful venture into the videoconferencing market. The acquisition, which is valued at $89 million, is expected to close on August 1, 2011. According to Polycom it will be immediately accretive upon close. The acquisition price seems miniscule compared to some of the mega acquisition numbers we have seen in recent months. However, it should be noted that HP’s sales from Halo are far smaller and not close to the success seen by its competitors in immersive telepresence. But that’s not why Polcyom is acquiring HP’s videconferencing business – it’s not a technology acquisition by any means. Polycom already owns all the technology components that HP videoconferencing brings to the table. So this is clearly a potential customer acquisition and market growth move. The HP acquisition and partnership announcement gives Polycom the added muscle in a fast growing and consolidating market. From day one Polycom gets access to HP’s 425 blue chip videoconferencing customers. More important than the acquisition news is the announcement that HP and Polycom have established a strategic relationship in which Polycom will be an "exclusive" provider to HP for telepresence, including both resale and internal HP deployments. That itself opens up immense opportunities for Polycom. HP’s 320,000 employees have a growing need for collaboration internally, creating a strong new customer for Polycom. The exclusive partnership also means Polycom will get access to HP's global distribution channels and sales team to sell its conferencing gear to HP's vast customer base. Considering that videoconferencing despite all the hype remains an under-penetrated market, think of the all the sales opportunities this could generate for Polycom among HP customers that are already investing in networking, storage, and managed services. The two companies have agreed to make Polycom videoconferencing and telepresence applications available for WebOS platform and TouchPad line. Mobility is a hot topic and the most exciting developments in collaboration are coming to mobile devices. This partnership will further strengthen Polycom's growing integration with tablets and smart phones. Along with the acquisition announcement Polycom also made headlines by announcing - Open Visual Communications Consortium - Long time in the making OVCC is an open video exchange cloud with carriers to help expand inter-exchange and B2B videoconferencing beyond proprietary video platforms and carrier networks. The 14 service providers as founding members include top names such as AT&T (a strong Cisco telepresence partner), Verizon, BT, Glowpoint and Telefonica. Polycom and Microsoft announced “Rally”, codename for a purpose-built HD telepresence product. It’s the first room telepresence solution with an embedded Lync client, and will natively integrate with Microsoft Office 365 cloud service as well as premise-based Lync systems. This further solidifies Polycom’s growing partnership with Microsoft. In a UC webcast today Polycom had a strong showing from its key partners including HP, Juniper, and Microsoft. There are several questions that emerge from the Polycom-HP announcement. What will happen in the long term to the Halo product line? Though Polycom has announced its commitment to support Halo and the existing customer base, it is unlikely that Polycom will continue with dual telepresence lines. Also, after the acquisition will Polycom continue with HVEN telepresence network and managed services and will that create conflict with its service provider partners? Lastly, there are big challenges for Polycom to truly leverage HP’s channels to sell videoconferencing products, which is a very different sale from HP’s core products. Polycom has been gaining a lot of momentum in recent months and has benefitted significantly from a growing ecosystem of partners, particularly Microsoft. This announcement creates another solid partnership. What competition has to worry about is how to counteract an even more powerful Polycom. It is evident that this acquisition is a move against Cisco. It also means the end of HP’s OEM partnership with Vidyo which has been gaining significant mindshare for its SVC-based videoconferencing line. The HP-Microsoft-Polycom triangle of partnership could mean huge challenges for Polycom’s competitors.


  • page 1 of 1

Help Desk

Full list of offices


For more information and general enquiries, contact Frost & Sullivan near you.

North America
tel: +1.877.463.7678

Select a location near you..