With Polycom, Siris Capital Builds Impressive UC Holdings

Many where caught off guard when they learned Siris Capital outbid Mitel for Polycom but there are some good reasons for Siris to have made this move. After the Mitel acquisition was announced, I detailed the good and bad about the deal.

Here were the two comments which I placed in the bad category:

Bad: Polycom most logically should have ended up merging with Plantronics IMO – the companies are geographically close to one another and the synergies between headsets and other endpoints seemed like a perfect fit. I’ve thought this for many years. Peter Radizeski even credits part of Polycom’s challenges in selling phones to the growth of headsets from companies like Plantronics. Another benefit would have been the separation from a UC platform provider like Mitel. Wes however points out that Polycom is more than endpoints – much of their new technology has far broader applications.
Bad: This is a follow up from the item above but worth focusing on. The Polycom sales team was able to sell a phone/endpoint-first approach to UC. Meaning that if a company decided to buy phones from an open provider like Polycom, they could more easily switch PBX vendors. This is now a tougher pitch to make.

Apparently Siris agrees as evidenced by a quote covered in my colleague Paula Bernier’s earlier article:

The industry is transitioning to a hybrid on-premise[s] and cloud-based unified communications environment,” noted Dan Moloney, Siris executive partner. “We believe that as an independent private company,

Polycom would be best positioned to continue its heritage as a best-in-class communications solutions provider to more than 400,000 companies and institutions, channel partners, and the evolving unified communications ecosystem.

In addition, the synergies between Polycom and other Siris portfolio companies are worth delving into. In late 2015 Siris picked up collaboration and cloud UC player PGI for a billion dollars. One quarter later, they picked up Xura which itself is made up of Comverse and Acision – companies which are very strong in the communications service provider markets – voicemail and SMS respectively.

I covered Comverse in August of 2013 and February of 2014 – in general both meetings centered on the company helping carriers transform with the times or evolve. I’ve met frequently with Acision as well in the past – covering their SMS technology and evolution into a next-gen solution to help carriers compete with OTT. In addition, here is a video with CMO JF Sullivan on their WebRTC strategy going back to 2014.

Siris then has a strong portfolio of companies in the UC space for enterprise as well as service provider. In the case of PGI – much of the solution is cloud-based already while Xura is helping with the transition.

siris-capital-polycom.png

So we have enterprise and carrier innovation coming from the top down and the bottom up. Eventually, many of these solutions will overlap. Certainly they are heading in similar directions and may benefit from the same parent umbrella. It is unclear how closely these companies will work together but it’s worth contemplating how they could be of greater value as a single entity to a larger buyer who wants to have a dominant position in these spaces.

In a way, GENBAND has similar assets but they also have Kandy which is similar to Twilio (they think Kandy is even better). Nexmo would have rounded out the Siris portfolio but Vonage picked them up recently instead. I imagine Twilio may be too expensive at the moment to contemplate acquiring.

Siris has put together a great arsenal of patents, companies and solutions. We can’t wait to see what their next moves are.

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