05 Nov Poly: The Comeback “Mojo” Is Building
Poly has an undeniable track record of innovation and leadership, including both major components of Poly (Plantronics + Polycom). Given the recent merger, I looked forward to the analyst briefing last week to meet the key leaders, and learn about their current plans. As a unified communications and collaboration (UC&C) industry veteran and former CEO, I am sharing my findings and perspective of what I heard this past Monday.
Before the meeting, I reviewed the financial (P&L) and market share (units) data for Polycom (pre-Poly merger) over the past 20 or so years. Reference Figure 1 below for a histogram summary of my findings.
A summary of the histogram above is as follows:
- 199x-2010: Visionary outlook, continuous revenue growth, steady profit, game-changing innovation, complementary acquisitions, market-share leader (units) and focused
- 2010-2018: Stagnating revenue, inflated operating expenses, constant change of senior management (i.e., three CEO’s + many senior management changes), replaced one of the longest standing logos in the UC&C industries history and lack of focus
- 2018-present: New leader, new vision, calibrating to market realities, thoughtful change, people-centric leadership, smart company investments, re-invigorating innovation engine, new name, new logo, and most importantly, focused
The root cause assessment of number 2 above is debatable and beyond the scope of my article today, but the historical numbers and results speak for themselves. I have summarized the history to calibrate us to the current state and show what the potential of the company is. That’s enough history, let’s focus on going forward.
Market and Poly situation analysis
The industry analyst meeting started with a series of presentations from numerous executives. All of it was informative and very good. My focus will be on a subset, specifically the strategy and products launched. Figure 2 below is a chart that Poly used during the meeting. It is an illustration showing the past versus present state of the UC&C (universal communications and collaboration) market. The UC&C markets technology evolution and inter-locked, resulting business model economics have starkly changed. Focusing on the left side (Fig 2). In prior times a customer purchased somewhat expensive endpoint codecs for each conference room. The expense of these CODECs made widespread use somewhat prohibitive, especially for Small Office-Home Office usage. After installation of these CODECs, a customer was generally financially locked to the vendor due to capital expense invested.
Technically, getting connected for a video call could be tricky due to network complexities, quality-of-service, and security protocols for a company’s network. Generally, things worked okay for intra-company video calls but calling a different company was often frustrating, requiring skilled IT support to complete. There was just a lot of complexity in the infrastructure, creating friction for the ease-of-use. This experience sounds like things were horrible; the truth is the technology was a great productivity tool compared to not having it at all. The economic equation, when compared to air travel, showed both meaningful cost savings for corporations as well as additional participants involved who otherwise may not have been able to attend if travel was required. The market overall experienced steady growth and innovation. Incremental progress was made to address the barriers to broader adoption.
Today, we are moving to the right side of the chart (Fig 2). The cost and frustration of prior generation equipment are now dramatically reduced by moving much of the functions needed to establish a video call to a server located in a cloud datacenter. It is clearly (technically & economically) the future of video and voice conferencing. The resulting outcome is now there are two basic categories of technology providers in the Unified Communications-as-a-Service (UCaaS) business model:
- Category A: UCaaS software providers (ex. Zoom, Teams, Webex, etc.)
- Category B is the voice/video/data equipment that is needed to capture people and digitally feed to the UCaaS providers servers (ex. Poly)
To maintain simplicity, suffice it to say, there are skills required to make quality UCaaS software work well and equally special skills required to make high quality, high fidelity, and reliable audio/video capturing endpoints for end-users. Poly’s focus is now on the latter (Category B) which it has undisputed deep capabilities to do. When you combine a tier-1 UCaaS provider and tier-1 endpoint provider, the user experience takes a step-function improvement in the quality of experience. It’s better for the end-users and the administrators. What’s not to like?
Now within the new world order for the UC&C market, let’s focus on Poly’s unique position in this market. Referencing Figure 3 below, Poly has a comprehensive portfolio of handsets, desktop, conferencing, and video calling endpoint products. All of Poly’s products are covered by global service and support. For installations large enough to benefit from administration management tools, this capability is also available. Poly’s in-depth engineering capabilities make it capable of supporting all UCaaS providers with a universal set of common class endpoint products. Finally, Poly is uniquely positioned with a comprehensive product lineup, global distribution, administration management of all equipment, mature global service and support. The really good news for large enterprise customers is nothing about supporting their requirements is new to Poly.
Zoomtopia, a tradeshow event by Zoom Communications, took place the following day. Poly took the opportunity to give us a sneak peek at the following day’s announcements. The early preview unveiled two additional video endpoints to create a true plug-n-play video conferencing experience for Zoom Rooms. Poly announced two new purpose-built all-in-one video bars, the Poly Studio X30 and Poly Studio X50. The key benefit of the Poly Studio X-Series is they do not require an external PC or Mac to deliver the Zoom Rooms experience.
The plug-n-play installation means both Poly Studio X models can sit, stand, or be mounted wherever desired, with downward-facing connection ports making installation easy and quick. To make it even easier to install and use, Poly also announced the new Poly TC8 touch controller that offers a native Zoom Rooms interface, high-performance, and a single power-over-ethernet cable, so there is no need to stretch cables or cords across tables to connect to the video bar.
Highlighting Poly’s deep engineering capabilities is the new Poly MeetingAI capabilities for audio and video experiences built on machine learning and artificial intelligence. Key features include advanced noise suppression improving the clarity of human voices while simultaneously blocking the typing, pen clicking, or candy unwrapping that often occurs during meetings. My favorite new feature is the new video production rules, automatically allowing remote employees to see participant’s faces and the context of what is happening without requiring human involvement to touch a remote or reconfigure a setting. The AI equivalent of a camera operator optimally framing participants in the call.
Finally, Poly announced that the G7500 video operating system would also support the Zoom Rooms experience natively with a software upgrade.
General availability of the above product lines is summarized as follows, primarily for North America and European marketplaces initially:
- Studio: Available Now
- Studio X30 + TC8: Available December 2019
- Studio X50 + TC8: Available December 2019
- G7500: Available Now – software update available in Dec 2019
The G7500 does not officially carry the “Studio” brand name right now due to the timing of announcements. I added it to the positioning chart for clarity–I would expect a branding modification to G7500 sometime in the future to include the Studio family name.
As I reflected on the current state of the market and learning about Poly’s strategic direction, I created Table 1 below summarizing my thoughts and feedback.
The Poly leadership team showed genuine energy and conviction for their new plans around strategy, marketing, products, go-to-market and service/support. The UCaaS endpoint market opportunity is larger than any time in the unified communications market’s history. Poly’s opportunity to be an undisputed leader is within its reach. Referencing back to the start in Figure 1, I believe after the Analyst Day meeting that the Poly “mojo” is making its comeback.