Partners: Polycom Acquisition By Private Equity Firm Will Change Channel Dynamics

Partners of Polycom are cautiously optimistic that its intended acquisition by private equity firm Siris Capital Group will lead to new benefits for them, yet they're sure the deal will change the vendor's channel dynamics after the company becomes private.

’If you’re taking away the public-facing requirements, then you take away things such as having total number of resellers, for example, as a requirement to show value,’ said one top executive from a solution provider and Polycom partner who did not want to be identified. ’We’re truly waiting to see where the cards fall – seeing where the headcount is because a private organization can be more streamlined because they have less judiciary responsibilities.’

At the 11th hour last month, Polycom terminated its intended merger with Mitel, opting instead to be acquired by Siris. The $2 billion acquisition is expected to close in the third quarter of this year, according to Nick Tidd, vice president of Polycom’s global partner organization.

[Related: Here’s Who Made Gartner’s 2016 Magic Quadrant For Group Video Systems]

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While partners are hoping the deal with Siris will reap new benefits for channel partners, there are some potential setbacks, they said. Among them are the possibility of having fewer executives focused on channel initiatives and engagement as Siris could streamline leadership positions to boost profits, said partners. Additionally, a privately-held Polycom would have the flexibility to cut the total number of solution providers in their channel, which partners called a ’real possibility.’

In an interview with CRN, Tidd said Polycom is not on-boarding new partners at a fast rate like other vendors are, but instead is focusing on existing channel partners.

’As partners look at the investments they make with their vendors and they see their vendors on-boarding partners at their expense -- meaning they’re losing share -- we’re not doing that,’ said Tidd. ’We’re investing and doubling down with existing partners.’

Although partners are hesitant to go all-in on Siris-Polycom now, Polycom needed to be taken private to transition more quickly to the cloud, according to Gary Berzack, CTO and COO of New York-based eTribeca, a Polycom partner.

’Polycom is challenged because they’re at an inflection point where there’s a race to the cloud for voice and video,’ said Berzack. ’Being inside a public company is a challenge if you’re trying to re-engineer yourself at the same time. And Polycom is in a position that they really need to re-engineer themselves.’

Berzack said sales in the voice and video conferencing market, which Polycom specializes in, is moving rapidly toward the cloud. He said Siris’ role is to add financial investments into Polycom’s effort to be a leader in the cloud collaboration and unified communications as a service (UCaaS) markets.

The UCaaS market generated $3.9 billion in revenue in North America alone in 2015, and research firm IHS expects it to grow 11 percent annually through 2020.

San Jose, Calif.-based Polycom was recently named a leader in Gartner’s 2016 magic quadrant for group video systems. Gartner pointed out that the vendor’s recently launched RealPresence Clariti collaboration infrastructure was a positive move to meet the growing demand for cloud video infrastructure.

’We got to wait three to six months before we’ll know if this was truly the best thing for Polycom,’ said Berzack.