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HP’s Blurred Telepresence Vision Ends with Polycom Sale
| Jun 2, 2011 | Unified Communications and Contact Center
| Analyst: Brian Riggs
Event Summary
June 1, 2011 -- Polycom announced that it will acquire HP's Visual Collaboration business, reportedly for $89 million in cash. The sale includes the Halo Products and Managed Services business. Additionally, Polycom will become HP’s telepresence partner, including both resale and internal HP deployments. Polycom will also port its video applications to HP's webOS platform within the next 90 days. The acquisition is expected to close by August 1.
Quick Take
Analytical Summary
• Current Perspective: Moderate on Polycom’s proposed purchase of HP’s Visual Collaboration solution set (previously branded Halo), because with it, HP is finally retreating from the telepresence market that it was instrumental in creating. Despite having been first to market with an immersive telepresence solution that simulates in-person conference room meetings, Cisco and others took over leadership positions in the market through a combination of aggressive marketing and making telepresence a core part of the company strategy. Selling its Visual Collaboration business to Polycom cuts lose a set of solutions not central to HP’s business, but at the same time, it disrupts HP’s year-old partnership with Vidyo, Polycom’s rival in the market for video conferencing solutions.
• Vendor Importance: High to HP, because divesting itself of Halo lets the company shed a product family that is no longer strategic to its business plans. The move complements the distance HP is placing between it and the business communications products that came with its acquisition of 3Com (please see HP Networking Unified Communications Platforms Face Less Than Certain Future, January 27, 2011). This will allow HP to back out of the business of delivering real-time communications solutions not central to current corporate refocusing and growth initiatives. The deal is of moderate importance to Polycom, because the company will effectively remove a competitor from the market, acquire a managed telepresence services business that it currently lacks, and bring in more than 400 HP customers that have deployed its Visual Collaboration solutions. Though the addition of HP Visual Collaboration will not significantly improve the Polycom portfolio (in fact, the acquisition rather complicates the Polycom portfolio), Polycom has at least prevented competitors from buying it and strengthened a very powerful corporate partnership.
• Market Importance: Low on the video conferencing solutions market in general, because there are only between 400 and 500 businesses deploying HP Visual Collaboration solutions. This, in addition to HP Visual Collaboration’s decreasing visibility in the market, means that the acquisition is likely to affect few enterprises. However, the deal will have a high impact on customers of HP’s video collaboration solutions, because they can either transition to Polycom’s larger, generally more up-to-date telepresence portfolio or have their existing HP products integrated with Polycom solutions. In either case, HP customers will benefit from the R&D attention of a company infinitely more focused on developing video conferencing solutions for enterprises. However, with HP and Polycom telepresence solutions largely overlapping with one another, it is highly likely that the HP products will be rationalized in the long run.
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Current Perspective
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