A combined Plantronics and Polycom will move Plantronics out of the peripherals business and squarely into the UC systems market, giving Plantronics the gravitas and scale it needs to work with UC competitors to increase interoperability, reduce complexity, and in turn, boost customer retention.
Communications equipment specialist Plantronics on Wednesday revealed its plans to acquire UC and collaboration provider Polycom for $2 billion. For channel partners, the deal is bringing together two very compatible providers, according to Gary Berzack, CTO at eTribeca, a New York City-based solution provider and Polycom partner.
"Many Polycom sales are complementary to Plantronics, and vice versa," Berzack said.
— CRN (@CRN) March 28, 2018
Because the two UC providers have worked hand-in-hand in the past, Plantronics on the communications hardware side and Polycom on the UC service side, many solution providers partner with both companies today.
"There are probably the highest concentration of integrators holding both providers in their portfolios today that the consolidation of the channel programs shouldn’t be too big a struggle for any seasoned channel professionals," he said.
Plantronics hardware has been the "non-competitive addition" to many UC sales from a variety of vendors, including Polycom and Cisco because the technology will work with any communications or video service, Berzack said.
"Now, there might be an element of co-competition since the two companies are being combined," he said.
But Plantronics said that instead of using the acquisition to create a more formidable UC player that can better go head-to-head with market leaders Cisco and Microsoft, the deal would give Plantronics the market presence it needs to encourage better interoperability across the entire UC and collaboration market, Chris Thompson, vice president of business-to-business marketing for Plantronics, told CRN.
Combined, Cisco and Microsoft are still leading the collaboration market. The two providers controlled 26 percent of the total market in 2017, according to a new report published on Wednesday from Synergy Research. However, the report also found that several UCC vendors grew their revenues by 20 percent or more year-over-year during 2017; these include Vonage, BlueJeans, 8x8, and Polycom.
— Plantronics (@Plantronics) March 28, 2018
Customers aren't buying into one provider's ecosystem anymore. UC providers have to be able to connect into any vendor's system and deliver a great user experience, Thompson said.
"We think that if we do our jobs right, our Alliance Partners -- Cisco, Blue Jeans, etc. -- we think we'll make their products work better and complement what customers might already have in place. All boats will rise," he said.
For channel partners, this means being able to move off price as a differentiator to end customers, and focus on bigger business issues while simplifying UC architectures, he said. Partners can also a one-stop shop for their end customers because they'll be able to offer UC services, subscriptions, and hardware.
"Every UC project doesn’t need to be a huge systems integration project," he added. "Reducing complexity makes partners' businesses more profitable."
Polycom today offers audio and video conferencing services that are rivaling web-based tools, such as Skype and Google Hangouts. The San Jose-based company's technology also goes head-to-head with conference room video solutions from the likes of Cisco and Avaya. Polycom went private in 2016 when private equity firm Siris Capital Group purchased it for $2.0 billion in cash.
Plantronics, which does nearly all its business through channel partners, will need to prove over the next two years that the deal isn't just a consolidation play, but rather a combination that will boost innovation, according to one Polycom partner that requested anonymity.
"Where I'm concerned is where the money comes in from a research and development perspective, and if there will still be room for growth and smaller acquisitions that can come around this one," the Polycom partner said.
Plantronics said that while it intends to fully integrate the two companies, with Polycom employees joining Plantronics, the end result will be a company with a new vision.
"We're acquiring Polycom, but we aren't looking at this as an integration of one company into another. We think our common vision will serve the open collaboration market," Thompson said.