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1:1 Craig Malloy, CEO, Lifesize

May 13, 2015 | Telepresence Options

Craig_Malloy_and_Alan_Greenberg

Story and images by Wainhouse Research

I recently visited Lifesize's brand-spanking-new Austin offices to visit with Craig Malloy, whose role in the collaboration industry as a successful product manager and then entrepreneur needs little introduction (VTEL led to ViaVideo, which put Polycom on the video map, then he co-founded Lifesize, purchased by Logitech, then took over little start-up, social learning company Bloomfire and gave it some fire in its belly, and most recently returned to Lifesize in early 2014). Craig's been around long enough to know when you need to cannibalize your own product line to survive.

WR: How would you describe today's enterprise video communications market?

CM: This industry has changed so much since I got started; it is completely different now. Twenty years ago people were terrified to be on camera! With a new generation of people in the workplace, and the expectation that companies will provide consumer app experiences - like Skype and Facebook - for the workplace, the demand for video communications has exploded. Everybody has multiple ways of making video calls in their pocket or purse. So when those consumers walk into your office and become your employees, they want the same on-demand, anytime, anywhere calling from any device.

In the past, video communications in the B2B world hasn't worked that way. It's traditionally been a very expensive, project-based experience, limited to a small number of conference rooms, with expensive on-premise infrastructure that would never scale.

Now, it creates a huge opportunity. High quality video communications is no longer nice to have; it is a must have, and right now.

WR: How do you describe Lifesize's particular position in today's market? No longer is there a duopoly - what is it?

CM: There's been a distinct shift to a new deployment model, which consists of: cloud infrastructure for video services, multi-point calling, directories, presence, recording, streaming, and firewall traversal. The cloud is first and foremost. Second are mobile and desktop. The third critical piece consists of deeply paired conference room endpoints.

Our position on the new deployment model is that we have by far the leading product with those three elements. I want the market to think of us like Nest, Fitbit, Apple TV, Microsoft Xbox or a Roku box. All of those companies are fundamentally delivering cloud-based services, but they all make a piece of hardware - a connected device in this notion of the Internet of things. That's what we do: make low-cost, high-quality conference room systems that deeply pair to our cloud service, and provide a better user experience than anybody else in the marketplace.

WR: How do you substantiate that claim? Others would say the same thing about connecting conference rooms and devices and infrastructure.

CM: There are three components of the model and nobody else is there yet. In talking with our clients, this is what they want:

  1. Cloud service (firewall traversal, presence, directory, chat, management, recording, streaming, all of these essential services in an affordable, scalable, secure cloud service)
  2. Desktop and mobile apps that connect seamlessly
  3. Plug-and-play conference room devices that work just as simply as how Apple TV plays when you plug it in

WR: What about Blue Jeans and Videxio and the VCaaS providers?

CM: So if you make a call from a "meet-me" service in a conference room, you dial into a virtual meeting room by the same method you use to make an audio conference call. Dial in number, keypad, and pin code - after they send you a meeting invite. Does FaceTime require you to get an email to get an invite? Does it send you an email inviting you to a virtual meeting room?

WR: No, it just rings.

CM: Exactly. That's what we do. Everything is directory and presence based. Person #1, the administrator, signs up on our website for our cloud service. They are given an account and asked to send an email to all @ - let's say Silicon Labs, a new customer of ours that just signed up for 1K Lifesize Cloud seats. The email goes out - "Here's our new service we're going to use. Just register for an account and download the app." Every employee is added to the directory and now has a 40-way MCU on their mobile phone. Audio, video dial-in or dial-out, and the ability to create a virtual meeting room on the fly too! Plus all the other features we offer.

Then, let's say Silicon Labs wants to outfit 100 conference rooms. They would purchase Lifesize Icons, that one right there is $2,500 {points to an Icon unit}, walk into a conference room, plug in power and HDMI connections, and enter a username and password. The system immediately registers and the entire directory is built onscreen. It shows a directory, presence, virtual meeting rooms, who is available, and you just talk. There is truly nothing like it. We are the only company with best-in-class cloud service and deeply paired endpoints (which really matters).

Almost every customer that I talk to tells me that this is what they want. They want to enable every person in every conference room, in a scalable, affordable, simple, secure environment, with business-class features and support.

So we have completely shifted our business to deployment in this model. Our product line is so simple: conference room systems for small medium and large, MAC and Windows desktop apps, Android and iOS mobile devices, and then browser-based guest calling.

So we have completely shifted our business to deployment in this model. Our product line is so simple: conference room systems for small medium and large, MAC and Windows desktop apps, Android and iOS mobile devices, and then browser-based guest calling.

WR: Talk about your win rate.

CM: In nine months we have more than 1,100 paying Lifesize Cloud customers. Ask some of the other freemium providers how many of their customers are paying. The last two days of the quarter we got 100 new customers. I've never seen B2B adoption like this.

WR: Well, talk to us about the relationship with Logitech? What does that look like now, after rumors for years that you would be spun off?

CM: Logitech has been incredibly supportive of this transformation we are going through.

WR: Whoa. I have to pause: you have to say that, you work for them.

CM: I mean it. I work directly with the Chairman of Logitech, Guerrino De Luca, and they have been great. There is not a tight operational integration between the two organizations, but they are our corporate owners and it has been great. It could have been a disaster. When I came back I outlined what we wanted to do with Lifesize and they were fully supportive of this transformation. We are just getting started. This is an amazing greenfield opportunity.

WR: What did you learn at Bloomfire?

CM: I learned how to run a B2B SaaS service. When I left Lifesize it was firmly implanted in the old world. I got my training at Bloomfire. I didn't know anything about B2B SaaS. Bloomfire is loosely a collaboration tool. When I came back here, I came back with a vision to transform this company from a device company to a connected cloud company. I learned SaaS economics, understanding the SaaS business, SaaS development, hosted infrastructure concerns, and introduced a big learning curve to Lifesize when I came back here. This was totally foreign to Lifesize. When I got back and began to change the company, it was clear we needed more front-end web developers, more cloud service developers, and more mobile developers. We still do hardware but it's a different sort of hardware. My two years at Bloomfire was essential to kick start what we are trying to do here.

WR: When do I get my Apple Watch app?

CM: Does it have a camera? {Editor note: not likely anytime soon!}

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