Partnering Questions Abound For Polycom Following HP Video Buy


 

According to Ofer Shapiro, CEO and co-founder of Vidyo, Vidyo and Polycom have not yet had a discussion. HP did notify Vidyo ahead of the announcement, Shapiro said. He declined to provide details on those conversations.

"I don't know if Polycom would want to continue the relationship with us or not," Shapiro told CRN Wednesday. "Our agreements are such that they cannot be automatically transferred. (Polycom) has not contacted us yet."

Shapiro said he views the acquisition as "very strong validation to the pressure we put in the market on legacy vendors." Vidyo is among a handful of smaller, challenger brands eating into the enterprise video market currently dominated by Ciscoand Polycom.

Vidyo's relationship with HP, Shapiro said, was "just ramping up." Their agreement, made public in June 2010, originally called for both the OEM relationship and future product development between the two vendors. Vidyo software is part of HP Visual Collaboration, and HP was also selling Vidyo's VidyoConferencing platform, running on HP servers, through its services arm.

"Polycom will lose a lot of value if they just shut down the product," Shapiro said, reiterating that the agreements it has with HP do not automatically transfer to Polycom.

The HP business is less than 10 percent of Vidyo's overall revenue, according to Vidyo. Shapiro said he learned a lesson about diversifying OEM and partner relationships from Radvision, where he was a senior vice president until 2004.

Radvision had an OEM relationship with Cisco that at its peak accounted for one than one third of Radvision's revenues. But Radvision has lost a lot of that business following Cisco's 2010 acquisition of Tandberg, and in April 2011 cut its first quarter outlook and said it would make less than half of the $5 million in Cisco revenue it had planned on for the quarter.

Shapiro said Vidyo doesn't plan to make a similar mistake, and won't suffer if the agreement it had in place with HP ends.

"This type of event is why there is no one single partner that is more than 10 percent of our business," Shapiro said.

Polycom, for its part, will continue to grow both organically and by acquisition, said Hayden. The HP Visual Collaboration acquisition is its second M&A move in the past three months, following a March pickup of video content management specialist Accordent Technologies.