What this means for Polycom
For Polycom, the implications are a bit bigger, but this does give the company a new lease on life. A quick look at Yahoo Finance shows the company's stock price hasn't moved much in four years, so it's time to do something different. The challenge is that when a company is public, too much focus is on reporting the quarterly numbers, which is often at odds with doing what's best for the business. That's why Dell, Avaya, BlueCoat, Veritas and a number of other companies went private.
There are a few facts that are favorable to Polycom. The company has a great brand. Customers generally love the products-they are well built, and the brand is one that stands for quality engineering at a fair price. And its phones are the de facto standard now for cloud communication providers such as Vonage and RingCentral.
Polycom also has a deep relationship with Microsoft and is able to ride the Skype for Business/Office 365 wave better than any other Microsoft partner. It also has a number of unique features, such as auto mute and acoustic fence. Lastly, Polycom recently rolled out some cool new products, including Debut (small business turnkey solution), Trio (conference room phone and control point) and Centro (a middle-of-the-room video product).
However, too much of the company's revenue comes from traditional hardware-based video endpoints that sit in medium to large conference rooms. The company needs to make the shift to being more mobile and cloud-centric. But under the pressure of being a public company, it is very difficult to do.
CEO Peter Leav has been masterful at making Polycom more profitable and leaner, but that solves only part of the problem. As a private company under the watchful eye of Siris, Polycom can let its new products curate in the market and then aggressively make major shifts to cloud and mobile, which if executed on properly, should create a bigger sale price a year or two from now.
Customers and channel partners of Mitel and Polycom should see no short-term impact, as the businesses will continue to run as they have been. Long term, it depends on where the two companies go from here. Its highly likely Mitel will continue to acquire businesses, which has been their modus operandi in the McBee era. Without the weight of being public, Polycom is likely to release more new products faster that are better aligned with current market trends.
Even though the merger is off, those are still story lines worth watching. More to come.
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