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Polycom to Acquire HP's Video Business for $89 Million

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June 01, 2011

Polycom to Acquire HP's Video Business for $89 Million

By Tammy Wolf, TMCnet Web Editor

Wednesday was a ground-breaking day for Polycom, as the unified communications and video conferencing leader  revealed it will acquire the assets of Hewlett-Packard’s (News - Alert) Visual Collaboration business. The agreement, valued at a staggering $89 million in cash, will comprise of HP’s suite of video and telepresence solutions and Managed Services.

On Wednesday, Polycom hosted a webcast to reveal how this new partnership will help break down the barriers of distance communication, drastically improving productivity for all customers.

As described by Andrew Miller (News - Alert), CEO of Polycom, the webcast revealed four strategic announcements:

1.       Polycom will be acquiring HP’s Halo line of products and Managed Services;

2.       Poycom will become HP’s exclusive vido communications provider, as well as a supplier of HP’s WebOS platform;

3.       Polycom (News - Alert) and HP will be taking strategic relationship to a higher level with deep UC video integration with Lync and Office 365;

4.       Polycom and HP will be establishing the first-ever video open exchange cloud with 14 of the world’s leading service providers to revolutionize video industry by enabling ubiquitous video connectivity to customers.

“We expect these announcements… to drive mass adoption of B2b and B2C visual communications and will forever change the way people work," said Miller during the webcast.

Joined by Shane Robinson, executive vice president and strategic technology officer at HP; Gurdeep Sing of Microsoft; and Scott Stevens, vice president of worldwide technology for Juniper Networks, Miller reviewed each of the ground-breaking announcements.

As described by Miller in the webcast, Polycom will acquire HP’s Halo line and managed services, as well as 425 blue chip customer sites across 36 countries.

“We are two world-class organizations breaking down the barriers to distance and communication. Together we wil offer full end-to-end UC solutions to the global market.” said Miller, who added that this acquisition will grant customers  access to a broad video portfolio, a feature set from Polycom and a faster path to interoperability.

In an effort to further strengthen their strategic alliance and beef up their UC and video businesses against Cisco (News - Alert), Polycom and HP have also agreed to combine efforts on a range of video UC and telepresence solutions, including both internal and resale HP deployments. In addition, both companies will provide Polycom’s video applications on WebOS, a software platform that HP purchased through its 2010 Palm acquisition.

"The transaction makes the most of the strength of two industry-leading, customer-centric organizations to offer a seamless UC experience with high-quality, enterprise-class telepresence solutions to millions of customers," said Miller in a statement. "Our broadened relationship with HP underscores Polycom's focus and commitment to bring the most advanced and innovative UC solutions to market." 

As described by Sing as an "excellent addition to Polycom's full line of UC devices and infrastructuers that meet the needs of SMBs, the joint development between Polycom and Microsoft will bring to meeting and conference rooms "Rally," a purpose-built HD telepresence solution with an embedded powerful Lync client. By natively integrating with Microsoft Office's 365, this breakthrough solution will run on the Lync server as well as premise-based Lync systems.

"This will allow our best-of-breed solutions like Exchange, SharePoint and Lync to be delivered to customers on a turnkey basis," said Sing.

Meanwhile, as described by Miller as the “biggest news in this industry in over a decade,” Polycom and leading global service providers like AT&T (News - Alert), Verizon, Orange and Telefonica have formed the Open Visual Communications Consortium, an open video exchange cloud with leading service providers that is expected to help drive visual communications beyond corporate firewalls and proprietary video platforms.

Expected to come to market as early as Q4 this year, the consortium will help drive millions to connect over video "as easily as they do currently on their mobile phones," said Miller.

Members of this consortium will help to further accelerate video conferencing and make it easy for millions across the globe to communicate through video, opening the door to faster decisions, streamlined collaboration with partners and customers, easier supply chains, and transformational applications in an array of industries. Through a standards-based, multi-vendor, multi-network visual communication exchange, networks, business, governments, universities, healthcare institutions and other organizations utilizing video conferencing will be able to easily connect with each other – anytime and anywhere. 

The acquisition is expected to close in 3Q 2011.

Lastly, effective today, Polycom has approved a two-for-one stock split after receiving great interest in the shareholder community, including new retail investors.

The webcast, entitled “Innovation Driving UC Everywhere: From Mobile to the Cloud and Beyond,” can be accessed from Polycom’s website.

Tammy Wolf is a TMCnet web editor. She covers a wide range of topics, including IP communications and information technology. To read more of her articles, please visit her columnist page.

Edited by Rich Steeves

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