Polycom To Acquire HP Video Business


Polycom has entered into an agreement with Hewlett Packard to acquire the assets of HP's Visual Collaboration business, including the full range of HP video and telepresence products and managed services, for $89 million in cash.

HP and Polycom have also greatly expanded their strategic alliance. Polycom will now be HP's exclusive reseller partner for telepresence and "certain" video-based unified communications solutions, as well as handle HP's internal deployments of those products, according to the two companies. Further, HP and Polycom have also agreed to make Polycom video applications available for WebOS, the software platform HP acquired when it bought Palm in 2010.

All the moves come as both Polycom and HP look to strengthen their networking businesses, particularly their UC and video businesses, against a common enemy: Cisco. According to Infonetics Research, Polycom is the No. 2 vendor for revenue in the enterprise telepresence and video segment, behind Cisco, which thanks to its acquisition of Tandberg laid claim to 50 percent of global revenue in the space in 2010.

Throughout the past year, Polycom has responded to the Cisco threat by beefing up its channel programs and allying with a who's who of strategic vendor allies and noted Cisco rivals, from HP and Microsoft to Avaya and Juniper. Buying HP's video business, however, raises questions about HP partners who already sell those UC products, as well as the future role of companies like Vidyo, the upstart videoconferencing vendor and ostensible Polycom rival whose scalable video coding technology is OEM-ed by HP for Visual Collaboration.

Polycom and HP expect it to close in the third quarter of 2011.

Andrew Miller, Polycom's president and CEO, described the agreement as a "groundbreaking development in the UC industry."

"The transaction makes the most of the strength of two industry leading, customer-centric organizations to offer a seamless UC experience with high-quality, enterprise-class telepresence solutions to millions of customers," Miller said in a statement. "Our broadened relationship with HP underscores Polycom's focus and commitment to bring the most advanced and innovative UC solutions to market."

HP's Visual Collaboration portfolio launched in November, and distribution of the products through Ingram Micro began in January. The range of HP video products includes the Visual Collaboration Desktop -- which is actually an HP TouchSmart 600 Quad pre-loaded with visual collaboration software and bundled with a camera -- and a range of desktop- and conference room-based video endpoints and infrastructure products.

Under the terms of Polycom's agreement with HP, HP will also resell Polycom's UC solutions, including personal and group UC devices, UC infrastructure, UC managed services and audio/video software. HP's services arm first expanded its focus on Polycom sales a year ago, shifting away from Cisco-owned Tandberg.

The HP agreements are part of a series of major, video-focused moves made by Polycom this week.

Earlier Wednesday, Polycom confirmed the launch of a new consortium of service providers to drive interoperability for telepresence and video. Polycom is also expanding its strategic partnership with Microsoft to deliver native integration of Polycom's UC Intelligent Core platform, telepresence products and voice endpoints with Microsoft Lync.