Monday, October 05, 2009

Why Microsoft should buy LifeSize and Shoretel

Cisco just announced their intent to aquire Tandberg last week. This cemented the number one and two players in enterprise video conferencing systems effectively. Cisco's Telepresence is still insanely expensive for even the most aggressive SMB's and I would argue even many Enterprise customers. Tandberg has an excellent solution and meets the mid tier space well but isn't know for being super in the design and user interface arena. The remaining vendors with any traction are Polycom and LifeSize.

So where does this this leave Microsoft in the OCS and Unified Communications area for larger scale video teleconferencing and telepresence solutions? Microsoft has a good solution for single laptop integration and a moderately acceptable solution with the RoundTable product. But I must admit, having that RoundTable device spinning around and having it stick up in the middle of the conference room table is incredibly annoying and distracting, two things you don't want in a meeting.

I think Microsoft is missing a critical piece in the larger scale voice and video market space and I think they could easily scale up their Unified Communications platform with some strategic purchases. I think Microsoft should buy Shoretel for their voice capabilities and LifeSize for their video conferencing and telepresence solutions. It would instantly make them a much bigger player in both markets and cement Shoretel's ability to sell into larger enterprise shops while allowing LifeSize to capitalize their growth at a much faster rate.

To gain a foothold in the voice market that leverages their OCS platform a purchase of Shoretel would allow them to meet the needs of companies that require handset deployments (call centers, corporate and sales offices, help lines, etc.) but still support many of the OCS features they require while allowing more standards integrations. Plus, given the platform that the Shoretel solution is built on their is a high probability of doing a lot more integration work.

To gain a foothold in the video conferencing space picking up LifeSize (vs Polycom) would be a huge win. LifeSize has a better product portfolio (no question on that one), has a good partnership with Shoretel and does not have the valuation baggage that Polycom has currently. Even though Polycom is a Microsoft partner and is now building the RoundTable devices for Microsoft (which I think long term Microsoft should drop) LifeSize is a better match and more likely an easier acquisition given their size. They could also easily integrate the solution with their existing OCS solution and come up with something truly scalable and able to be packaged and sold for every sized company they sell too, that alone would be a huge differentiators.

Are their potential pitfalls in this? Sure, it could spoil Microsoft's ecosystem of voice partners - but given that Nortel is no longer a factor and Mitel/Intertel don't have enough value to justify a purchase they aren't a factor either. Altigen is much too small and can't even properly support QoS so Microsoft does not have to worry about them, they will continue to work with Microsoft no matter what they do. Avaya, Siemens and Toshiba and at the low end Panasonic are the other vendors who are left for the most part. All of them have to play nice with Microsoft as Cisco is crushing them in the voice space and they do not have a Unified Communications solution that anyone is really willing to buy.

Then again, Microsoft has always been a build it in software sort of company, I just think trying to address the video conferencing market without a good hardware solution is folly and given their options I think Shoretel and LifeSize are their best shots at catching up.
- Ed


macbroadcast said...

My personal opinion , lets start something ;)


Go to Meeting said...

Browser based tools and pay as you go billing. What more could any entrepreneur in the software development industry need?

Personally, I don't like using any tool that I am compelled to download. I think there should be options. I like browser based products because I can use them from anywhere, on any device.

If I start working on an application on one device, I can go somewhere and continue working when I have a free hour. Entrepreneurs want the ability to send and work with documents, or build applications from wherever they are and software like this allows them to do that.