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Polycom Making Good on Plans to Shake Up UC Industry

Polycom Inc. is serious about its plan to position itself as a software-based unified communications (UC) and video collaboration provider, branching out past its heritage as the maker of those uniquely identifiable star-shaped desktop conferencing phones.

As evidence, Polycom on Friday said it will sell its enterprise wireless handset business to an affiliate of private equity firm Sun Capital Partners. Sun Capital will pay about $110 million in cash; the deal is expected to close in the third quarter.

The divestiture takes Polycom a step closer toward its goal of becoming a UC software provider that now has SMBs, no longer just enterprises, in its sights, through resellers. In October 2011, Polycom CEO Andy Miller discussed that strategy with ScanSource Communications partners at an event in Tennessee.

We are trying to vastly differentiate ourselves in UC,” Miller said last year.

He said the trends driving UC adoption include mobility, social networking and the need to connect in real-time. Because of the staggering growth of UC projected by Gartner to top $17 billion by 2015 Polycom predicts 40 percent of its UC technology will be delivered via hybrid and cloud methods next year. One way Polycom aims to do that is by integrating with Microsoft Lync and part of its research and development money is going toward that goal. In fact, 90 percent of Polycoms R&D dollars are going into software.

Were putting the unified in unified communications,” said Miller in October.

Finally, he emphasized to ScanSource partners that Polycom, historically known for serving enterprises, is honing in on the SMB space, dominated by Cisco and LifeSize. We have a lot of work to do to serve the SMB community,” but Polycom is positioning itself to achieve that goal, Miller said.

Miller reiterated those aims in a May 11 prepared statement. And he said that selling the wireless handset division frees up the company to concentrate on video collaboration built on open, standards-based software. The move further should increase sales and gross margins within Polycom’s UC business, Miller added.

Polycom’s wireless handset unit produced Wi-Fi and DECT devices, along with related infrastructure and accessories. It earned revenue of approximately $94 million in calendar year 2011, Polycom said.


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