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AVI-SPL Acquires Iformata - Goal: Industry Domination

January 26, 2012 | Howard Lichtman
AVI-SPL_Iformata.jpgTelepresence Options Publisher Howard Lichtman and Associate Editor David Maldow had the opportunity to discuss AVI-SPL acquisition of Iformata Communications with Scott Allen (CEO of Iformata) and Mike Brandofino (EVP, Video and UC for AVI-SPL) just moments after it was announced.  It was clear from the conversation that this wasn't an incremental acquisition of additional capabilities... AVI-SPL's goal is to dominate high-end telepresence and visual collaboration from the equipment sale-- to the install and integration-- to the on-going managed services.  Get the details of the acquisition and Telepresence Options publisher Howard Lichtman's thoughts and analysis.

AVI-SPL Acquires Iformata - Goal: Industry Domination
             by Howard S. Lichtman, Publisher - Telepresence Options

First some background
AVI-SPL is the largest provider of professional audio-visual integration services in the world.  The company boasts 40 offices, 1400 employees, and has completed over 30,000 installations in 20 countries.  Over the past three years the company has improved its focus on telepresence and videoconferencing starting with the addition of Mike Brandofino, the former CEO and CTO of telepresence managed service provider Glowpoint to head video and UC initiatives at the company. Under Mr. Brandofino the company's video related revenue has increased by a factor of 10 from $20MM per year in 2009 to a projected $200MM this year  and now 50% of their completed AV projects include a video component.

In 2011 AVI-SPL developed its own line of multi-screen, multi-codec group telepresence systems, AVI-SPL Cameleon, that be deployed with the customer's choice of video codec from the major videoconferencing vendors.

One of the keys to the company's success has been one of the widest product lines in visual collaboration supporting virtually every major visual collaboration solution provider.  Last year the company flexed its innovation muscles and developed their own line of multi-screen, multi-codec  group telepresence systems called Cameleon that could be deployed with video codecs from Cisco, Polycom, LifeSize, and RADVISION.   The company has been arguably installing and integrating as much telepresence and visual collaboration solutions as essentially anyone else  on the planet but they have been relying on white-label partnerships with others to provide the on-going managed services.  

Video Managed Services and Inter-networking - The Money Left on the Table
Telepresence and videoconferencing managed services (Known in the industry as Video Network Operations Center services or VNOC services) provide help desk support, pro-active monitoring of video systems, simplify reservations for end-users, and handle multi-point calls and inter-operability issues when calling disparate video systems.  It is Big Money!  Costs can run to the tens of thousands per video end-point per year depending on the service level and inter-networking provided.  It is also Wall Street's favorite kind of money: Recurring revenue from big Fortune 5000 customers that pay their bills for a service that is extremely difficult and costly in time and treasure to switch providers.

Enter Iformata Communications Stage Right
Iformata Communications was the pioneer in supporting multi-screen, multi-codec group telepresence systems and connecting them to other videoconferencing and visual collaboration solutions.  The company was spun off from TeleSuite/Destiny Conferencing when Polycom bought the intellectual property and manufacturing capability behind the highly immersive TeleSuite telepresence environment in 2007 for $57MM and renamed the product line the Polycom RealPresence Experience(RPX).  

The managed services side of the business that supported TeleSuite systems (Now Polycom RPX) in the field was christened Iformata Communications.  Under the leadership of CEO Scott Allen and flush with $57 million in proceeds from the sale of TeleSuite/Destiny Conferencing, Iformata heavily invested in automating the processes behind monitoring and managing telepresence and visual collaboration systems especially the key aspects of connecting disparate systems (telepresence, videoconferencing, and unified communications), simplifying the reservation process, and connecting together different telecom networks and managing QoS between them.  The resulting platform was called VNOC Symphony and is considered by many to be the most sophisticated tool kit of its kind for automating video managed services.  Using the VNOC symphony software Iformata was able to add 1200+ multi-screen, multi-codec group system and room based videoconferencing systems AND 1500 desktop systems without any corresponding increase in headcount.   Not only does the software simplify the back end processes for running a VNOC but it simplifies the processes of reserving and scheduling rooms for end-users by, among other tools, providing apps for smartphones, ipads, and tablets that allow corporate users to see if telepresence rooms are available and book them with the push of a button.  Combining the ease-of-use for end-users and the automation of the back-end processes for connecting calls, the company has been able to achieve a stunning ratio of 93% of all video calls auto-produced without human intervention.

Iformata Symphony Screen Shots

Screenshots of Iformata's VNOC Symphony

The Deal
Both companies are private and are not releasing the cost of the acquisition. AVI-SPL has acquired Iformata completely including their main VNOC facility in Dayton, OH and back up facilities in Norfolk, VA and Norway. AVI-SPL also gets the customer base, partner relationships, intellectual property and approximately 40 employees.  The partner relationships will be interesting as Iformata white-labels VNOC services for a number of telecom carriers and other managed service providers in the industry.  AVI-SPL will also be abandoning one of Iformata's most significant initiatives:  A productization of the VNOC Symphony platform called the Symphony Enterprise SE (aka "the VNOC in a Box") which offered large managed services customers the ability to bring the Symphony tools into their own organizations and quickly stand up their own VNOC environments.

VNOC Symphony - Not Just for Video Meetings Anymore
The acquisition will strengthen AVI-SPL's existing Unify ME line of conferencing services in two keys ways. First, Iformata's Video Network Operations Center (VNOC) will allow AVI-SPL to directly provide VC management to customers without third party support. Perhaps just as importantly, AVI-SPL gains 450 patents in the field and a sophisticated set of VNOC tools including VNOC Symphony and the accompanying development team.  

AVI-SPL's goal is to leverage the Symphony platform to create an entire rich media communications package under one roof. The will enable AVI-SPL to single-handedly manage complex deployments of multiple IP addressable devices that are out of the reach of competitors.

The plan is to extend the Symphony platform gradually, expanding upon the software to make it the primary interface for all AV and VC elements. As Scott Allen explains, "Part of the core architecture for the Symphony platform was to be able to have an authoring application that allows us to bond to any bondable devices (communicate with their API's). Whether it's a Crestron or an AMX, a projector that is IP enabled, a system like CMA or TMS, etc., if it has an API and is IP addressable, Symphony has an authoring application that will bond to it and be able to give it instructions." These applications can ultimately extend past traditional video and pro-AV applications to encompass building monitoring and management, IP PBX, network monitoring and analysis, and other applications that are IP addressable, monitor-able, and manageable.


Telepresence Options Publisher Howard Lichtman's Thoughts and Analysis
The article's title: "Goal: Total Industry Domination" stems from an exchange that I had with Mike Brandofino and Scott Allen during our interview.  I have been speculating for some time that the telepresence and video managed services industry has been ripe for a roll up.  The institutional knowledge, specialized hardware, inter-networking and software tools required to make telepresence and visual collaboration work seamlessly are highly specialized especially when it comes to interoperability between different manufactures' video gear , federation of unified communications directories, and inter-connection of disparate telecom networks at high speeds while maintaining quality.  I only know of a handful of firms that do it well: AT&T, BCS Global, BT Conferencing, Iformata, Glowpoint, IVCi, Providea Conferencing, Tata Communications, Teliris, and Yorktel.  I am sure there are others.  Some are public companies which makes it harder but some of the best are still private.  Given the deep pockets of AVI-SPL's corporate parent, the $13 billion private equity powerhouse, SilverLake Partners, I asked Mike Brandofino if Iformata was a solo purchase or the first acquisition of my long anticipated roll up?

Mike and Scott's answers set the tone for the title of the article and bear repeating in their entirety. 

AVI-SPL EVP Mike Brandofino:

"From my perspective I do think there is a roll up potential for the industry for those smaller players that do service and video and by smaller players I'm talking about Providea, IVCi, Yorktel, etc. but we are going to be $600MM in sales in 2012 so they are a little bit below us. Our plan is going to sound cliche but we want to dominate the space. We want to really make it difficult for anyone else to get into the space and for anyone else to compete and we think by doing this it really makes it difficult for anyone else to compete with us. So from our perspective we don't see a need to roll up any of the other players because we are going to win their business competitively." 

Iformata CEO Scott Allen continues the point:

"It is going to be difficult to be competitive in the space because it is going to take a lot of investment capital for competitors to have the tools, and the  firepower, and the differentiators they need to win big deals and they probably aren't going to be able to do that.  This combination between AVI-SPL and Iformata is exciting because it creates a powerhouse that is not easily matched in the industry by anyone else out there."

Let the games begin!

About the Author

Howard Lichtman is the President of the Human Productivity Lab, a telepresence consultancy and research firm that helps organizations design telepresence and visual collaboration strategies and deploy and future-proof investments.  He is also the publisher of Telepresence Options, the #1 website on the Internet covering telepresence and visual collaboration technologies and the Editor of the monthly Telepresence Options Telegraph and the bi-annual Telepresence Options Magazine, the world's most widely read publication covering telepresence technologies.

Mr. Lichtman is also the author and/or co-author of The Telepresence Options 2011 Yearbook, The Inter-Company Telepresence and Videoconferencing Handbook (2009), The Telepresence and Videoconferencing Exchange Review (2010), Telepresence, Effective Visual Collaboration and the Future of Global Business at the Speed of Light (2006), and Emerging Technologies for Teleconferencing and Telepresence (2005).  He is currently working on Telepresence Options 2012.

Mr. Lichtman is a frequent commentator on telepresence, videoconferencing, and effective visual collaboration and his writings on and analysis of the industry have been featured by US News and World Report, Telephony Magazine, CXO Magazine, The Chicago Tribune, Reuters, Pro AV Magazine, Killer App Magazine, ABA Banking Journal, Bank Systems and Technology Magazine and CFO magazine among others.

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