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Dissecting Siris Capital's Polycom acquisition a year later

The Mitel-Polycom-Siris love triangle was the UC story of the summer last year. Now, a year later, what has transpired? How was Polycom's year under Siris ownership?

A year ago, private equity firm Siris Capital Group LLC completed its $2 billion acquisition of voice and video conferencing provider Polycom Inc. Since then, Polycom became a private company, shook up its executive leadership, and unveiled a few new products and partnerships.

At the time -- and still today -- the Polycom-Siris deal highlighted the ongoing trend of vendor contraction and consolidation in the unified communications (UC) market. This market volatility -- as vendors are acquired, file for bankruptcy or look to sell assets -- underscores the importance for UC users to find financially viable vendors that can provide ongoing product support and innovation.

When a company undergoes ownership change, customers and partners might sense some uncertainty, said Amy Barzdukas, chief marketing officer (CMO) at Polycom, based in San Jose, Calif. But, she added, Polycom has reached out extensively to business partners to reassure them about the vendor's vision and viability.

Becoming a private company, for example, provides Polycom with more product-investment flexibility without the quarterly pressure to meet Wall Street's expectations, Barzdukas said. In its final years as a public company, Polycom cut costs aggressively and saw declining revenues, but was still profitable.

Taking a calm approach after Polycom-Siris deal

Although Polycom's earnings are no longer public, Wainhouse Research analyst Ira Weinstein said he believes Polycom's financials are stronger after the Siris deal.

"We're seeing continued innovation and ongoing investment," he said. "This looks like what you want to see from a strategic partner."

Weinstein said Siris is "quite involved" with Polycom, but not overly involved. Barzdukas said Polycom meets "very regularly" with Siris, and the relationship has been a "positive interchange."

Externally, Weinstein said, Polycom had a quiet year, as it focused internally to bolster executive leadership. During and after the Polycom acquisition, the vendor named a new CEO, CMO, general counsel, head of product, and head of strategy and business development, Barzdukas said.

I firmly believe that [Siris'] long-term goal is to take [Polycom], massage it, add value and sell it. This is what companies like that do.
Ira Weinsteinanalyst, Wainhouse Research

For its part, Siris, too, has taken a cautious approach, Weinstein said.

"But I do firmly believe that [Siris'] long-term goal is to take [Polycom], massage it, add value and sell it. This is what companies like that do." But Weinstein said he does not see any urgency on the part of Siris to sell Polycom.

In a statement to SearchUnifiedCommunications, Dan Moloney, Polycom executive chairman and Siris executive partner, said Siris is "very pleased with the progress made to date." He highlighted Polycom's new leadership team, product launches and focus on interoperability.

In addition to the Polycom acquisition, Siris also acquired two other UC-type companies: Mavenir in August 2016 and PGi in December 2015. Siris has also shown interest in buying Synchronoss Technologies Inc., a mobile services provider.

Partnerships and competition commingle

Despite its seemingly quiet year, Polycom did launch new products. In January, the vendor launched EagleEye Director II, an in-room smart camera with active-speaker technology. In June, the vendor announced Polycom Pano, a content-sharing service with whiteboard capabilities. These products, however, were in the works before Siris took over, Weinstein said.

In its 27-year history, Polycom has championed standards-based voice and video technologies, which help it fortify partnerships with other UC vendors. These partnerships are a key business strategy for Polycom, its channel partners and customers. But partnerships and competition often mingle, and could spawn confusion among channel partners.

Microsoft is evidently open to expanding its video-related partnerships beyond Polycom.
Dave MichelsUC analyst

Microsoft, for instance, is a key partner for Polycom, which provides UC and video platform options for extending Microsoft Skype for Business into conference rooms. However, Microsoft has also certified endpoints with other vendors. Recently, Microsoft certified Pexip's Infinity Fusion as a video interoperability service for premises-based Skype for Business Server.

Pexip, Cisco, Vidyo and other video providers have supported Skype for Business interoperability, industry analyst Dave Michels wrote in his monthly enterprise communications report. But, until now, the Skype for Business Server certification was exclusive to Polycom. Now, Pexip is in the mix.

As Michels noted, "Microsoft is evidently open to expanding its video-related partnerships beyond Polycom."

Polycom reimagines the conference phone, again

Twenty-five years ago, Polycom launched its popular three-legged SoundStation conference phone. To mark its anniversary, Polycom this week rolled out new and updated conferencing services targeted for meeting rooms of all sizes.

The Polycom Trio 8500 is a new interpretation of the SoundStation design. Geared toward midsize conference rooms, the Trio 8500 includes HD voice, noise-blocking technology, a full-color touchscreen interface and Microsoft Exchange calendar integration. Video and content-sharing features are expected later this year. 

Polycom also introduced new features in its Trio 8800, the company's fastest-selling conference phone. Trio 8800 now allows users to pair personal devices to share local content over USB, AirPlay or Miracast. Later this year, the phone is expected to support motorized pan-tilt-zoom cameras that offer a wider degree of visibility for larger conference rooms.  

Both Trio phones support hybrid registration, allowing businesses to migrate between open Session Initiation Protocol and Skype for Business environments and work with other cloud-based audio and video platforms.

Finally, Polycom introduced VoxBox, a compact and portable speakerphone for team and personal spaces, such as huddle rooms. VoxBox will be available in select areas starting in October.

The cloud conundrum

At the same time, in the past year, Polycom has deepened its Microsoft partnership. In September 2016, Polycom introduced the Skype for Business user interface to Polycom video endpoints. Polycom also partnered with Microsoft to integrate Skype for Business video conferencing into meeting rooms, but Logitech and Crestron also partnered with Microsoft in that initiative. In June 2017, Polycom announced that its RealPresence Group Series, an in-room video conferencing service, is certified for Microsoft Skype for Business in Office 365.

Empowering customers, whether they're on your cloud or some other cloud, that's interesting.
Ira Weinsteinanalyst, Wainhouse Research

Another key partnership came in May 2017, when Polycom teamed up with Zoom Video Communications Inc., which is conceptually a competitor. The partnership combines Zoom's cloud-based video communications with Polycom products.

The deal also gets Polycom into the midmarket, an area in which the vendor has never really been, Weinstein said. Additionally, the alliance helped Polycom diversify its marketing, since Zoom is focused on the cloud, while Polycom largely targets meeting rooms.

"Partnering like that means a significant mindset shift," Weinstein said. "Empowering customers, whether they're on your cloud or some other cloud, that's interesting."

'More aggressive moving forward'

As many vendors tout their cloud products, Polycom has emphasized it won't be a cloud provider, Weinstein said. Instead, Polycom is focused on empowering others to be cloud providers, which could mean more partnerships in the future. Underpinning that initiative is Polycom's RealPresence Cloud, a video as a service delivered by partners.

Even as Polycom builds its partnerships, the company faces stiff competition. Cisco, for instance, updated its video portfolio this year with Spark Room Kits, which feature 4K video, artificial intelligence capabilities and integrated sound. Cisco also has speaker-tracking technology similar to Polycom's EagleEye camera. Additionally, Cisco is porting its conferencing services to its messaging-centric cloud service Spark.

Looking to the future, Weinstein said Polycom could build on the past year.

"I think they've been distracted a little bit by shoring up the management team and dealing with channel issues," he said. "I expect them to get more aggressive moving forward."

Next Steps

As UC market contracts, buyers should benefit.

Prepare your organization for vendor consolidation.

As UC vendors consolidate, so do UC users.

This was last published in September 2017

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