videoconferencing

Cisco gives in to demands of holdout Tandberg shareholders

Cisco’s newly revised $3.41 billion offer for Tandberg represents a total capitulation to the demands of several holdout Tandberg shareholders who were asking for more money.

Cisco originally offered $3 billion for the Norwegian videoconferencing vendor, but the deal was contingent on 90% of Tandberg shareholders accepting the price. The deal appeared in trouble when a cadre of shareholders who owned about 24% of the company’s stock demanded an 11% increase over Cisco’s original offer.

Today Cisco has come through with that. Its $410 million bid increase is about $80 million more than the holdout shareholders were asking for. This deal looks like it’s going to happen.

Videoconferencing consolidation continues: Logitech buys LifeSize

Lost in the hoopla from last week’s news that HP bought 3Com was a much smaller deal in the high definition (HD) videoconferencing market. PC accessory company Logitech has bought LifeSize Communicaitons, a six-year-old vendor of HD desktop videoconferencing and room-based telepresence products for $405 million.

Logitech is best known as a manufacturer of peripheral devices for PCs, especially keyboards and mice. With only a line of standard-definition webcams, Logitech’s specialty is not enterprise video.

With LifeSize, Logitech graduates from selling peripheral devices to consumers and small businesses to selling an enterprise solution. It’s a whole different ballgame. In addition to endpoint devices, LifeSize sells HD videoconferencing infrastructure, such as multipoint control units (MCUs), gateways and security devices.

In the wake of Cisco’s attempt to acquire Tandberg (a deal which might be collapsing), LifeSize probably recognized that competing in the enterprise video market will require the backing of a larger corporate partner.  Logitech might have the money to boost LifeSize’s marketing budget, but it doesn’t bring the right sales channel to the table.

The most logical next step for Logitech will be to approach key unified communications competitors to Cisco like Avaya, Siemens and Microsoft to build up video interoperability partnerships.

Is Cisco backing out of Tandberg deal?

Bloomberg is reporting that Cisco might walk away from its agreement to buy Tandberg. As we mentioned two weeks ago, A large group of shareholders have balked at the $3 billion offer Cisco and Tandberg’s executives and boards of directors agreed upon. Cisco’s Tandberg deal is contingent on it being able to acquire 90% of the company’s stock. Twenty-one shareholders who own 24% of the company say Cisco’s offer is too low.

Bloomberg is citing a “person familiar with the transaction” as the anonymous source for its report.  Financial analyst Martin Hoff at Arctic Securities ASA told Bloomberg that Cisco probably won’t just walk away. Instead, the anonymous claim that Cisco is contemplating a pullout from the deal is probably just a scare tactic. “It’s probably smart of them to send some signals to scare the shareholders into accepting the offer,” he told Bloomberg.

If Cisco does close the Tandberg deal, it will expand its enterprise video strategy from its high-end telepresence products to a full suite of desktop and room-based video systems, multipoint control units and video management software. Combined with Cisco’s existing lines of telephony products and Cisco will be competing directly with Tandberg’s chief rival Polycom on all fronts. If that happens, enterprises can expect other major communications vendors like Avaya and Microsoft to become heavily aligned with Polycom.

Tandberg shareholders to Cisco: Put a bigger diamond on that ring

Cisco’s deal to buy Tandberg could be on ice.

When Cisco and Tandberg agreed to their video marriage two weeks ago, the dowry was set at $3 billion. And the deal was contingent upon the approval of the owners of 90% of Tandberg’s stock.

According to Reuters (via GigaOm), Swedish brokerage SEB Enskilda has told Cisco that it represents 21 shareholders who own 24% of Tandberg’s stock, and those shareholders want more money.  “We think the price is too low,” Amund Lunde told Reuters. Lunde is CEO of life insurance firm Oslo Pensjonsforsikring, which owns 1% of Tandberg, It’s not clear what it would take to win over these holdouts, but clearly Cisco will have to dig deeper to get a controlling interest in the company.

Apparently investors have been telling the Norwegian press that something stinks about the Tandberg deal. According to the Financial Times (via Norwegian language site Dagen IT) Rasmussen Group CEO Rune Selmar said Cisco’s promise of three-year bonus agreements to “key” Tandberg employees “probably explains part of management’s positive attitude to the acquisition.”

Ouch. That sounds awfully close to an ugly accusation.

Wainhouse Research Collaboration Futures Summit ‘09: Videoconferencing

We’ve heard it from vendors for awhile now — video is the wave of the future. So it came as no surprise when I stepped onto the exhibit floor at the Wainhouse Research Collaboration Futures Summit ‘09 that the only demonstrations were HD videoconferencing products. In this video, I take you through each demo from four vendors: Radvision, LifeSize, Vidyo and Tandberg.

As you can hear me say in the video, the buzzword of the day was “scalable video coding.”  The comparison of the scalable video vs. the video with 3% packet loss was pretty interesting — I know my video quality itself wasn’t the best (ironic), but trust me when I say that the scalable video looked significantly clearer. There was not a bit of pixelation on the screen, whereas the 3% packet loss looked like satellite dish TV when there’s a major hurricane — very pixelated. 

A few products were hardware-based, and others were software-based. Software-based products seem to be the best for desktop videoconferencing, as clunky hardware would clutter up one’s desk, and a simple webcam attached to a desktop will do the trick. Software is also generally cheaper, as a license and simplified hardware is easier to purchase than a full hardware system.

But for room-based videoconferencing, hardware seemed to provide better clarity. As the LifeSize rep pointed out, a hardware videoconferencing solution isn’t going to draw on your system’s processing power and make everything run slowly, depending on your system. Hardware has an inherently different (though not necessarily better) troubleshooting method as well, if anything should go wrong.

Videoconferencing wasn’t the only topic discussed at the Wainhouse Research Collaboration Summit. In my next blog entry, I’ll give a brief summary of the topics discussed during the sessions.

Swine flu: yet another justification for telepresence investment

John E. Burke, principal analyst over at Nemertes Research has an interesting take on the swine flu hysteria.  It’s just another reason why companies should invest in telepresence technologies from Cisco, Tandberg, Polycom, HP et al.

Burke noted in an email from Nemertes that the flu outbreak in Mexico has prompted executives from Japanese companies like Sony and Sharp to cancel trips to their Mexican production facilities. He said telepresence would be a viable way for these executives to keep their face-to-face meetings with Mexican staff.

Vendors have so far focused their business cases for telepresence on the reduction of travel expenses, green initiatives and increased productivity. But clearly telepresence can also factor into business continuity and disaster recovery planning.

Extending that a bit further, desktop video should also get some attention thanks to swine flu. If a pandemic does indeed strike, many people would appreciate the option of working from home while the virus runs its course over the course of weeks or months.

The Polycom VVX 1500 business media phone at VoiceCon

I shot this video at VoiceCon Orlando last week. Tim Yankey, director of product marketing for Polycom, is doing a demo of the VWX 1500, which the vendor describes as a “business media phone.” At a list price of $1099, this phone is meant to sit on the desks of high level executives. It has high quality video and touchscreen capabilities. And Polycom is touting the openness of the platform, encouraging third-party software developers to build light-weight business apps to run on the phone. Polycom doesn’t claim this phone will replace the PC on the desk. Instead it claims the phone will be a compliment to the PC. The phone is certainly slick, but I wonder if it’s worth the money. Couldn’t you get a lot of the same functionality from a softphone? I guess a CEO might want something like this on his or her desk, but broad deployment of such an expensive phone might be hard to justify.

Please forgive the sideways angle at the beginning of this video. I’ve been using my iPhone too much. I’m used to a camera that’s integrated into an accelerometer.

Telepresence will kill airline profits

I don’t know how this escaped my attention last month but Gartner predicted that video telepresence will take away $3.5 billion in revenue from the airline industry by 2012. That’s got to make executives at Delta and US Air wince.

As part of its top 10 predictions for 2009, Gartner predicted that telepresence would replace 2.1 million airline seats per year by 2012. In making this prediction, Gartner declined to estimate how much telepresence is costing airlines today.

Given how ruinous telepresence promises to be for the airline industry, I’m left wondering if the Deltas and US Airs of the world are investing in telepresence themselves. Will executives at airlines try to save money by holding high level meetings via telepresence, or will they stubbornly refuse to adopt this technology and continue to fly to on-site meetings in some symbolic effort to support the business.

Another interesting prediction from Gartner: By the end of 2013, 40% of enterprise knowledge workers will have abandoned or removed their desk phones.  This certainly applies to me. I’d be happy to throw my desk phone in the trash if my employer agreed to subsidize part of the service plan for my iPhone.  As it is, I work from home twice a week, and on those days my iPhone is my only means of telephony.

Hat Tip to John Willis