Polycom, With Accordent Acquisition, Nudges Further Into Software


Polycom's $50 million acquisition of video content management provider Accordent Technologies is all about synergies, according to the two vendors -- not least for how it gives Polycom an in-house video content management solution where it relied on an OEM relationship before.

The two vendors also boast healthy channel overlap but nearly no competing products or services, and both have tight, strategic ties to Microsoft and other vendors.

On the whole, according to Polycom, Accordent will help the video and UC stalwart expand its addressable market by $500 million and push Polycom further into software. It'll grab a much bigger bite of what according to Wainhouse Research is expected to be a $1.2 billion market for video content management by 2014 -- one with a compound annual growth rate of 32 percent each year.

"There's no strong leader in this market," said Jim Kruger, Polycom vice president of solutions product marketing, referring to video content management and delivery. "With the existing solution we had, it was OK, but we didn't control the roadmap, we weren't able to do good integration with our existing solution, and we really didn't promote it internally that much."

Polycom on Tuesday announced it would acquire Accordent, based in El Segundo, Calif., for $50 million in cash. Founded in 1999, Accordent posted $9 million in revenue in 2010 and has more than 1,200 customers across enterprise and public sector and through service providers -- the majority of which were not previously Polycom customers, according to companies.

Accordent's entire 50-employee staff, including its three co-founders -- President and CEO Michael Newman, CTO Michael Lorenz, and Senior Vice President Sales and Marketing Jereme Pitts -- will join Polycom, reporting into Polycom's UC research and development team. Accordent's software products will become part of Polycom's UC Intelligent Core platform.

Polycom has previoulsy had an OEM relationship for video management products with San Bruno, Calif.-based Qumu. Kruger said Polycom would support its Qumu-OEM'ed products for five years.

"We plan to work really closely with our customers and make sure there are no issues," he said. "We haven't decided on specific timing, but as you can imagine, since we have our own solution we will [transition] from an OEM solution."

Both companies' strong ties to Microsoft will also be important. Accordent's products boast deep integration with Microsoft's UC platform, Lync, as well as SharePoint, just as many of Polycom's do.

The two companies also anticipate adding channel presence and business opportunities through Accordent's existing partnerships with Blue Coat Systems and Riverbed Technology, as well as exploring storage possibilities with vendors like EMC and NetApp thanks to the bandwidth -- and storage -- intensive nature of video content.

Steve Pattinson, Accordent's senior vice president of strategic alliances, anticipates a more complete solution for channel partners, as well, particularly VARs and system integrators focused on large enterprise UC accounts.

"This is going to drive some interesting partnerships," Pattinson said. "We can take our software, combine it with the Polycom platform and innovate the industry."

According to Kruger, Polycom evaluated 10 companies before reaching an agreement with Accordent. He declined to comment on whether Polycom would seek additional acquisitions, but said the company is "always looking for synergies and companies that make sense going forward."

Polycom in the past year and a half has bolstered its executive ranks, updated its channel program and pumped up its strategic partnerships with a number of top networking and UC vendors, including HP, Avaya and Microsoft, as it continues to go toe-to-toe in the video channel with Cisco.

Cisco, which changed the dynamics of the market segment with its $3.3 billion acquisition of Polycom archrival Tandberg in 2010, commands the No. 1 market share spot for enterprise video, and had 50 percent of the market's revenue in 2010, according to Infonetics Research. Polycom has the No. 2 revenue share, according to Infonetics, and leads for units shipped.