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LifeSize Takes on Cisco in Videoconferencing, Sees Sales Rise

August 31, 2011 | William Zimmerman
lifesize_logo.jpg

By: Chiara Remondini, Bloomberg.com

LifeSize Communications Inc., a unit of computer-mouse maker Logitech International SA (LOGN), expects revenue to jump as it competes with rivals including Cisco Systems Inc. (CSCO) to add clients in the videoconference market, set to more than double in the next five years.

LifeSize's sales are forecast to rise two to three times faster than the market, which is expected to grow 15 percent this year, Chief Executive Officer Craig Malloy said in a phone interview. Revenue at the Austin, Texas-based company rose 34 percent to $36.5 million in the fiscal first quarter, making LifeSize Logitech's fastest-growing business.

"We're seeing very, very rapid growth in videoconferencing," the CEO said. "We're going to piggyback on key trends and accelerate our growth." LifeSize is targeting $1 billion in revenue in coming years, Malloy said, without giving a precise timeframe.

Technology companies are using mergers and acquisitions to grow in videoconferencing. Romanel-sur-Morges, Switzerland-based Logitech, the world's biggest maker of mice, was among the first to make a deal in the industry when it bought LifeSize for $405 million in 2009. Cisco the same year announced it was buying Tandberg ASA, the world's second-biggest maker of videoconferencing equipment, and Polycom Inc. (PLCM), the world's largest standalone maker of videoconference gear, agreed to buy Hewlett-Packard Co.'s competing business in June.

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