Polycom is no longer a video conferencing company. Right before our eyes, the company is being transformed into a vendor of video communications technology.
The distinction in this terminology is slight, but the implications for Polycom’s future are huge: an organization that once focused on selling big-ticket video gear for conferencing rooms is now embracing a worldview that aspires to make video a ubiquitous element of business communications.
The vehicle for the Polycom transformation is software. The long-time video conferencing stalwart last month drew attention to a fresh commitment to a “software strategy.” In short, Polycom’s future does not rest in selling cameras, conferencing units and real-time high-quality video encoding. Rather, growth for Polycom over the long-term focuses on developing software applications that make video more useful – creating value in day-to-day business communications.
The latest evidence of this came Oct. 17, when the video conferencing giant announced that it is acquiring video collaboration start-up Vivu for an undisclosed price. Vivu, which sells a hosted solution that enables the integration of video into online meetings, greatly advances Polycom’s efforts to offer cost-effective solutions that push live video communications beyond the conference room and to the desktop.
Paradoxically, success in the video technology market does not hinge on selling technology that improves video. Rather, it depends on creating software that helps video make a bigger impact on day-to-day operations.
Certainly, Polycom has not been shy about travelling this software course in 2011. Earlier in the year, the company spent $50 million in cash to acquire Accordent Technologies, a developer of enterprise video content management software. Last month, when announcing its new “software strategy,” Polycom also took the wraps off a partnership to offer software solutions from Jive, a platform offering designed to integrate social media more effectively with video offerings.
Instead of selling video systems, Polycom now is on the path to offering more fully integrated, software-driven video solutions that can address a broader array of communications applications than could ever be handled via a traditional video conferencing system. The software emphasis is giving Polycom more flexibility in the types of video solutions that it offers.
For now, the Polycom acquisitions have largely represented online extensions on its core role in enabling employee-to-employee communications behind the firewall. Vivu offers an online alternative to live video conferencing that can be distributed more effectively to the corporate desktop, while Accordent provides software that streamlines the management and distribution of on-demand content captured for employee communications.
So far, Polycom has marked off the easy items on its to-do list in building a viable online suite of software tools and services for enterprise video communications.
Content management? Buy Accordent. Check
Video collaboration? Buy Vivu. Check
Where Polycom goes next will tell us a whole lot about how the company envisions itself over the long haul. Do Polycom executives think of their offerings as a platform enabling ubiquitous video behind the corporate firewall? If so, look for Polycom to expand its IP video ecosystem with the purchase of a provider of networking gear or software designed specifically to streamline the distribution of video content.
Alternatively, the company could have its eyes set on enabling a broader array of video communications, including online video used in outbound marketing. In that case, the company could shift its sights to acquiring one of the dozens of online video platforms that enable video-enriched communications designed for external audiences.
Really, there are no wrong or right answers ahead for Polycom. The company already has made the right call in embracing the development of software that makes video more valuable in corporate use. Now, it’s just a matter of telling the world what types of business video software applications it will focus on over the long haul.
One thing’s for sure: more acquisitions lie ahead for Polycom. The only thing left is for Polycom to tell us what type of video communications company it ultimately wants to be.
