Avistar Looks For Boost With Reseller Program

Avistar Communications, a desktop videoconferencing software vendor recently threatened with delisting from the Nasdaq, on Thursday announced its jump into the channel, unveiling plans for a worldwide reseller program the company hopes will reinvigorate sales and help it hit markets outside of financial services.

Simon Moss, president and soon-to-be CEO of San Mateo, Calif.-based Avistar, said there were three key drivers to launching the reseller program: the direct sales model had hit a plateau; the company wanted to better position itself against other unified communications vendors; and it wanted to diversify its client base, which has been focused solely on the financial services market.

Avistar, Moss said, also wants to gain traction in new global territories that have remained untapped. Avistar already has an installed base in North America and Europe, but also wants to hit new targets in Asia and others.

Avistar's Channel Partner Program covers customer-premise and hosted products, Moss said. It will focus on VARs that deliver communications solutions to Fortune 5000 companies. These companies include meeting room conferencing VARs that want to extend video to the desktop, PBX and VoIP VARs looking to maximize the value proposition of moving voice onto IP networks, and the new breed of unified communications VARs wanting to extend the capabilities of systems from IBM Lotus Sametime and Microsoft Office Communications Server to include managed videoconferencing at the desktop.

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So far, Avistar has completed agreements with three U.S. resellers -- Veloci, of Houston, Texas; Westerville, Ohio-based Communications III; and Manist, of New Orleans, which focus on verticals like energy, legal, healthcare, pharmaceuticals, technology, retail, government and education. In Asia, Avistar has partnered with Japanese VAR Media Plus, which specializes in video conferencing.

The channel program comes after a tumultuous time for Avistar in which its revenue dropped dramatically and CEO Gerald Burnett announced he would resign at years' end, but maintain his seat on the board. Moss will replace Burnett as CEO.

In November the Nasdaq Stock Market threatened to delist Avistar due to lack of compliance. According to the notice, Avistar does not comply with the continued listing requirement set forth in Marketplace Rule 4310 (c)(3), which requires a company have a minimum of $2.5 million on stockholders' equity or $35 million in market value of listed securities or $500,000 of net income from continuing operations for the most recently completed fiscal year or two of the three most recently completed fiscal years. Avistar has until December 17 to get their market cap above $35 million to regain compliance. If compliance is not met, an appeals process can begin.

NEXT: VAR Joins Avistar Reseller Program

Moss was quick to point out that Avistar's new channel plan is not a survival strategy, but a way to boost Avistar's value and revenue. He added that the reseller program presents a lower risk model than direct sales.

"We have not realized the value of Avistar as we should have done," he said. "We are transforming our go-to-market strategy. It's not a case of survival. It's a case of realizing the best potential of this firm."

The value proposition for VARs, Moss said, is being able to offer unified communications tools, such as video conferencing, that don't require massive network upgrades like solutions from Cisco and other vendors. In addition, Avistar's video solution is less bandwidth-intensive than the major unified communications software players like Microsoft and IBM.

Scott Halliday, president of Communications III, which serves several verticals like retail, insurance and pharmaceuticals, said his clients have been seeking out less cumbersome alternatives to large vendor desktop video solutions.

"It's a pretty compelling argument," he said. "We've seen a lot of interest in the desktop space and we think that's going to continue."

Unlike many videoconferencing tools, Avistar does is not multipoint-based, meaning each client does not have to be connected to a multipoint conferencing unit. Still, Halliday said he credits the likes of Cisco and Microsoft for bringing the idea of desktop video into the mainstream, but he said many of his clients still are uncertain what it takes to implement desktop video.

"Most of our clients don't have a concept of what it really takes to roll out desktop video," he said, adding that a desktop video tool for thousands and hundreds of thousands of users can be daunting to install and keep up while also hogging bandwidth.

The value proposition for Avistar, Halliday said, is that it's much simpler to deploy, features a bandwidth utilization tool and is less taxing to configure. That, he said, combines to create a much shorter sales cycle.

"Frankly, the desktop has been the holy grail of the video business for 20 years," he said. "People want to communicate without walking to a conference room."