I read with a bit of a wry smile last week’s announcement about a new partnership between Zoom and Polycom promising “one click to join a Zoom meeting from a Polycom video solution.” What I found humorous about this announcement is that Zoom and Polycom are just now figuring out that they need both a cloud-based collaboration platform and conference room systems to succeed in the new phase of the now mainstream and rapidly growing video conferencing and collaboration market. Furthermore, not only do you need both elements, those elements must be flawlessly, seamlessly integrated together.
More on this later, but first a little history and perspective from someone who has been in this market and on the forefront of multiple technology transitions in the collaboration space for the past 23 years.
The rapid shift to a cloud service delivery model in our market began in earnest in 2012. We could see the implications for the on-premises infrastructure business model (i.e., it was doomed) and started working on our plan to reinvent Lifesize in 2013. Polycom, however, did not have such a plan. They suffered through five years of declining revenue, primarily due to the collapse of their infrastructure business, capped off by a forced sale to a private equity firm in 2016. They are now left to compete as a conference room peripherals business against a host of other low-margin providers. Without a “platform” business (then infrastructure, now cloud), they are nowhere near being able to compete, and they require partnerships with cloud-based providers to have any chance to win new or refresh deals with customers of any size. As a student of business strategy and leadership, and as the product guy who helped launch them into the video conferencing space, it always puzzled me why Polycom couldn’t muster the vision, courage or permission from their board and shareholders to reinvent their business the way that Lifesize has done.
Zoom has shown remarkable growth over the past few years with their freemium, e-commerce first, land-and-expand business model. A strong feature set, competitive pricing and very simple-to-buy and simple-to-use apps fueled their rise. But Zoom’s Achilles heel — the conference room system — is becoming a burden to them and limiting their ability to scale. Their Zoom rooms are an attempt to create an acceptable, full conference room product line, but they don’t really satisfy the requirements of anything more than a small business with a couple of small conference rooms. Modern businesses today have many types of conference rooms and applications within them: huddle rooms for two to four people; small conference rooms for five to eight people; large conference rooms for 10 to 20 people; highly integrated boardrooms with wireless mics, ceiling-mounted speakers and overlay control panels; and training, auditorium and large gathering spaces for company meetings. Zoom room configurations cover only a small fraction of these environments, leaving customers to cobble together and support their own solutions. Furthermore, all the Zoom rooms come in a bit of a “Heathkit” configuration, requiring self-assembly of components and software from multiple vendors. Some IT professionals like the do-it-yourself model, but most do not. Time is limited and room support is not on the top of their priority list. We know this because we compete against Zoom every day in multiple geographies. And we win because we can deliver conference room systems across the entire spectrum of use cases while maintaining and supporting one unified customer experience for the user and the IT professional.
Both Zoom and Polycom have now obviously figured this out. But what to do about it? It would be literally impossible for Zoom to re-create the 13 years of intellectual property we have put into building multiple generations of our conference room system lineup. And if Polycom decided to turn up a global cloud collaboration service at this point, they would completely turn themselves inside out trying. We know — we have done it. Polycom is more than five years behind and can never catch up in that area of technology. They could buy something, but it would take years to integrate it into a compelling, combined solution.
So they are left trying to cobble together a business-class collaboration solution by combining their respective parts, which are developed, marketed, sold and supported by two incredibly different organizations. In our experience, and we have plenty, this is not likely to work out well. Let me give you just two examples from our own business. We have tens of thousands of conference room devices paired to our cloud service that are deployed all across the world at thousands of organizations. Every Lifesize conference room device runs exactly the same version of software, and we regularly update every device in the world in just a few hours. This helps us ensure the highest levels of quality in our combined hardware and software offering, instantly distribute new capabilities to our entire customer base and rapidly respond to any security issues. How is that going to work in the combined Zoom and Polycom offering? Is Zoom going to take over responsibility for upgrading all the Polycom devices paired to Zoom, or will every version of outdated software on Polycom devices, with open bugs and unpatched security holes, be allowed to connect to the Zoom network? I wouldn’t want to manage that. Second, we know from selling to many thousands of customers in dozens of countries that service and support is a team sport between conference room devices, apps and the global cloud service. There is almost always a combined interaction between the various components to investigate, test or fix bugs. Make no mistake — this is very, very complicated stuff and a difficult technical support and customer success challenge even when we develop the entire solution. So who will customers call when there is an issue — Zoom or Polycom? In Enterprise accounts where conferencing and collaboration are now mission-critical capabilities, I can just imagine the finger pointing that will ensue, costing customers time and energy. In our opinion, that is not the way to create customer success.
Meeting rooms of all sizes and purposes are integral to enterprise communication and collaboration. For most organizations, the decisions they make start with enabling those spaces to be as efficient as possible, and then they usually expand to their employees’ laptops and mobile devices. A scalable, reliable, global and enterprise-ready cloud collaboration platform is also a must. And users now demand web, OSX/Win and mobile clients on par with their best-in-class consumer apps. You need all of them, tied beautifully together in a single, unified user experience, like the Lifesize solution. The “key features” listed in the joint press release from Zoom and Polycom? We’ve already been doing this for years, but it’s nice to see acknowledgment from both of them about the validity and strength of our product strategy. It’s the only one that is going to scale and win in the new collaboration market.