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CRN: Two other partnerships I wanted to ask you about. Is Avaya, with Radvision, a Polycom competitor now?
Miller: Avaya is co-opetition. They resell many of our voice products and conferencing technologies, and we enjoy that. Avaya is also a distributor for our video products. We enjoy that. On the flip side, Avaya is a competitor with their acquisition of Radvision. It's co-opetition, and that's the way of the business world now.
CRN: Are you still aligned with Juniper?
Miller: We are absolutely aligned with Juniper, and have a great working relationship. They're strong in the carrier space and we're strong in the enterprise space. There are a lot of tremendous opportunities further into the carrier space to partner with Juniper. Our relationship with [Juniper CEO] Kevin Johnson is strong and they are important.
CRN: As Polycom moves deeper into software, has that yet become more of a revenue contributor? Is it very significant now?
Miller: People have to understand that when you transition a platform in a hardware-focused company to a software-focused company, it's a decade of work. This is a transitionary period. Infrastructure and endpoints are clearly here to stay. There's a myth that all this technology will go away -- that the hardware endpoints will disappear and that we'll be all cloud in a few years. Hardware and cloud will co-exist.
But clearly, with the software capabilities in virtualization, cloud and soft endpoints, more of our revenue, year-over-year, will become software. That's a great opportunity for our partners as well. We haven't talked 2013 guidance, but we do expect it to grow, and to be a 16 percent compound annual growth rate for us into 2015. It'll be a big piece of our business.
CRN: Talk about your acquisition strategy. We've seen some interesting smaller pickups, such as Accordent for video content management and ViVu for embedding HD video into Web applications. Will we see more of those?
Miller: Yes, and ViVu, you may not know, is the secret ingredient to CloudAxis -- a big contribution to that technology. You can expect to see the same cadence in that range of $15 million to $200 million M&A activity we've had. Most of it will be around software and cloud but also around services support.
CRN: Do you think there will be more consolidation among video vendors? There's a lot of VC money and attention going into the startups right now.
Miller: We want to own that space. In the cloud space, I won't name the companies, but they provide ad-hoc video as a service. In the midmarket, the small medium enterprise, there's a lot of attention on the managed soft MCU. These are markets we're going after hard. We'll compete and we will see how consolidation evolves.
NEXT: Polycom's Next Moves
