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Polycom CEO Miller Q&A: How partnerships, independence fuel telepresence underdog

March 14, 2011 | Howard Lichtman
By Larry Dignan, Andrew Nusca - Via Between the Lines, ZDNet

Andy_Miller_CEO_Polycom.jpgFor Polycom, being independent and nimble has its perks when competing with far larger rival Cisco in telepresence systems.

When we last checked in with Polycom the company looked like an inevitable takeover target. After all, the video conferencing market consolidated quickly. Cisco bought Tandberg. Logitech bought Lifesize. Polycom had to be acquired right? Wrong.

A funny thing happened on Polycom's alleged road to becoming roadkill. The company made former Cisco executive and Tandberg CEO Andrew Miller as CEO almost a year ago. Then Polycom played up its independent status and forged partnership with damn near every company that goes toe-to-toe with Cisco.

The moves paid off as Polycom topped earnings and revenue targets every quarter in 2010. The stock chart tells the tale:

PLCM_Stock.pngMeanwhile, Cisco's acquisition of Tandberg, which theoretically should have squashed Polycom, worked out in the company's favor. Cisco had to submit Telepresence Interoperability Protocol (TIP) to the International Multimedia Telecommunications Consortium (IMTC) as a condition to complete its Tandberg purchase. Polycom then used that software to allow its systems to talk to Cisco's beginning in the second quarter. Without the Tandberg purchase, Cisco wouldn't have submitted that protocol for free. Cisco and Polycom are now working on interoperability standards called CLUE through the Internet Engineering Task Force. Now that telepresence systems can communicate the market opens up a bit.

Here's the recap of my chat with Miller at Polycom's demonstration center in New York City:

Polycom competition today: Miller said that Polycom primarily competes with Cisco and its Tandberg unit. After all, 70 percent of Polycom's revenue skews to large enterprises. SMB, defined as 1,000 or fewer employees, is the remainder.

Why go with Polycom? "There are four things I always talk about," said Miller. "Cisco is proprietary and we interoperate with existing platforms such as Microsoft's SharePoint or Lync and IBM's Sametime. We natively integrate with those technologies." Miller added that bandwidth costs are also a big part of the Polycom pitch. "Bandwidth is 70 percent of TCO (total cost of ownership) and we use 38 percent to 50 percent less bandwidth than Cisco," said Miller. In addition, Polycom systems can talk to Cisco's. "Customers can have mixed environments," he said. And the final point is travel savings and increasingly collaboration and productivity.

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