Here’s a thing. Private equity firms raise funds from institutions and wealthy individuals and then invest that money in buying and selling businesses. Their track record on previous funds drives its ability to raise money for future funds.
Most of us working in the channel know Polycom, the firm that started as a breakaway from PictureTel to develop a next generation of video conferencing solutions, got good at it and along the way bought out their former employers in 2001 and developed a range of IP based telephones that hit the mark for quality and functionality just as the market for hosted telephony took off.
Polycom’s performance attracted attention. Twice Mitel tried to take Polycom down the aisle and twice they were jilted before PE firm Siris Capital Group tied the knot in September 2016. Little over a year later Siris announced they had agreed to a deal to sell to headset vendor Plantronics at the end of March this year – the transaction is still pending.
Industry observers are saying that by selling Polycom now, Siris Capital Group gets a decent short-term return without having to worry about the impact of Cisco with the BroadSoft base, what Microsoft is doing with Lenovo, and whether Logitech is moving up-market. Siris did what all good private equity firms do, and that’s take the money and not look back.
So, here’s another thing. Today, telephones are no longer telephones and headset are no longer headsets. Huh? Well, this is because both are now referred to as being ‘end-points’ and, as we all know, endpoints are what goes on the end of all those unified communications, collaboration and hosted telephony applications that are displacing legacy technology at a furious rate of knots.
So, it sounds like Plantronics made a smart move then?
Well, probably. Plantronics has a lot of voice and video end-point options now for the channel and their users so you could conclude Polycom’s portfolio complements Plantronics perfectly and vice versa – and the deal could jump-start the company into that UC market.
But nothing ever happens in isolation these days.
The month prior to the Plantronics move on Polycom, Cisco purchased the most successful hosted telephony platform, Broadsoft, bringing with it with an as yet unspoken prospect of Cisco influencing the end-point market with their own extensive range of voice and video devices.
How will the market react?
Clearly, it is early days with the dust still airborne on both these enterprise-class deals. What we do know however is that the channel has proved time and time again to be both a resilient and resourceful supply sector.
It would be rare to find a reseller of IP phones that have a single vendor arrangement; two or three suppliers would be nearer the norm although with the recent takeover of snom by VTech that supplier pool is getting smaller.
However, no-one knows the threat to Polycom IP phones better than Polycom so we would anticipate the new owners to be readying their channel offerings to get a retaliation in first in the form of not only channel friendly phone pricing but also an increased prevalence of end-point bundling offers more inclusive of their entire new end-point portfolio.