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TPO Interview: Vidyo CEO Ofer Shapiro Talks About Momentum

March 14, 2013 | David S. Maldow, Esq.

Today's big announcement from Vidyo details more phenomenal growth from what is now an undeniable leading player in visual collaboration. I reached out to Ofer Shapiro, CEO of Vidyo, to get the details behind these numbers and understand why they think this is more than just another good year.

Telepresence Options: Hello Ofer, thanks for chatting with me. Let's start out with a tough one. Last year some of your biggest competitors have incorporated SVC into their technology in some form or another. As Vidyo was previously somewhat synonymous with SVC, does that hurt you coming into 2013?

Ofer Shapiro: Thank you David. It is true that SVC is no longer the "funny uncle" of VC technology. It is now the mainline technology of the future, as admitted by everyone. This means that Vidyo is coming into 2013 with SVC having now been legitimized by our competitors, and at the same time able to assert ourselves as a company that drives interoperability with traditional environments, while continuing to grow into new form factors and new markets, including the consumer space.

TPO: And as we have discussed before, not all SVC is the same. But I know you don't want to go over that again today, so we can move on.

OS: Of course, although I would like to mention that our development continues with 25 patents awarded and 55 pending.

TPO: They do say it is harder to catch a moving target. So let's look at these numbers. We all know the common perception of Vidyo, great for Greenfields, desktop and mobile, but a harder sell into big enterprise since they already have existing environments using your competitors' products. Does your 54% growth in the large enterprise segment mean that this perception now busted and does this signal a shift for Vidyo?

OS: We are pleased to see significant traction in all of our go-to markets. But yes, large enterprise is the "Fort Knox" of the traditional market and we are particularly proud of our success in the space. It isn't that we haven't had any success here before, but we are now competing head to head against the traditional dominant players in the space and winning. Our competitors were trying to assert that Vidyo was only good for 'GreenField' - this segment is exactly the opposite - and we still win there. It's a true testament to our ability to bring new life into legacy deployment and extend it to major desktop and mobile deployments.

TPO: The use of videoconferencing is growing throughout society, so isn't there room for everyone to grow? What makes you assume your win is their loss?

OS: Remember, this particular segment of the market has been shrinking, which means that every new Vidyo customer represents a nibble into our competitors' revenue. This effect is magnified when you take into account how much more affordable we are. Consider a theoretical sale to Vidyo of $1M. Yes, it is nice revenue for us, but it can represent up to 10 times as much in loss for our competitors when factors like redundancy and floating licenses are considered.

TPO: That is pretty significant nibble. So it is definitely worth taking a closer look at what is behind this 54% growth. My personal opinion is that Vidyo's advances in interoperability over the last year have really eliminated your competitors' best attack point. But that alone doesn't explain these numbers. How do you explain your success?

OS: In order for videoconferencing to become ubiquitous, it has to be so cheap that customers don't limit their use to save costs. We learned from the audio conferencing world. For example, what would you do if your audio conferencing cost 50 cents a minute, or a dollar a minute, or 5 dollars a minute?

TPO: I would count my minutes and limit my use.

OS: Exactly, so why should we expect videoconferencing users to act any differently? VC is better than audio, but not so much better that people will pay 100 times as much for it. We believe the price threshold for video, at which point users start limiting their use, is at the same range for audio, a few cents per minute. By offering videoconferencing at the effective equivalent of audio pricing, even at telepresence quality, we enable endemic adoption. This is a fundamental difference between us and everyone else.

TPO: I am going to get angry emails from the telepresence purists about "telepresence quality" but I think everyone knows what you mean. So aside from the excellent growth in enterprise, I also see 77% growth in healthcare and education, which is amazing, but not too surprising because healthcare video tech is incredibly hot right now. I also know you are expanding into the consumer market with partnerships such as the Nintendo deal. But what about government contracts? With the current state of politics, one thing everyone can agree on is that the government should be using VC to save travel costs and work more efficiently.

OS: Well, last year we got our federal JITC certification...

TPO: ...which would theoretically allow certain very large government agencies to use Vidyo technology.

OS: That is correct.

TPO: And you probably can't tell me any more than that, so I will just make my own assumptions and move on to the next question. I tried to start with a tough question, so let me finish off with an easy one. Can you explain this chart regarding partner growth?

OS: Most channel partners are seeing their business with our competitors going down as the market is shrinking. Meanwhile, our top 25 partners are seeing tremendous growth, with recent acceleration. So doing business with Vidyo is a good thing. That is our message for the channel, as we are in a channel driven business

About the Author
David_Maldow, Esq.David Maldow, Esq. is a visual collaboration technologist and analyst with the Human Productivity Lab and an associate editor at Telepresence Options. David has extensive expertise in testing, evaluating, and explaining telepresence and other visual collaboration / rich media solutions. David is focused on providing third-party independent analysis and opinion of these technologies and helping end users better secure their visual collaboration environments. You can follow David on Twitter and Google+.

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