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Highfive Launches and Seeks the Road Not Taken

Highfive came out of stealth mode earlier this month with one of the slickest room video conferencing systems we've seen in a long time. The product photo above gives you some sense of its industrial design, but the real story is how the company has integrated product + price + positioning + GoToMarket in a way unlike others who have been in this market.

Before getting into the interesting subtleties, here are some basics on Highfive:

1) The product is a complete videoconferencing system that needs only power, network, and an HDMI connection to a monitor. It sits easily on top of a flat panel display. It comes in a very "Apple-like" professional packaging. The HD camera is fixed focal length, but wide angle (120 degrees)--ideal for small conference rooms. The unit has four embedded microphones and an audio DSP that provide exceptional audio quality that you would usually associate with table-top microphones only. Screen sharing is supported as well (wireless).

2) There is NO hand-held remote. You set up and launch calls via your mobile phone (wireless proximity detection) and/or the Web. Remote participants can join a meeting by clicking on a URL. Participants can join a video meeting with the Highfive device, a mobile phone, or a personal computer. A simple swipe can move the meeting between devices.

3) The device requires a service plan; the company offers two. The theory here is that Product + Service = Competitive Advantage. The free service provides unlimited video calls and multipoint (active speaker display) with up to 10 participants in a meeting. The basic paradigm is your now-popular Virtual Meeting Room (VMR) approach. The $10/month PRO plan adds unlimited phone minutes, custom branding, single sign-on, a lobby or waiting room, and a few more touches.

4) The unit sells for $799 and will be sold DIRECT. The company's target is the ~25 million-50 million conference rooms that are not currently video-enabled. To support this target, Highfive has a web-based console which allows administrators to manage devices remotely.

5) There is no interoperability with any industry standard video systems or with Lync. However the system does integrate with Outlook and Google calendar.

In the past 18-24 months, we have been inundated with announcements about video conferencing as a service, aka "cloud video conferencing." Hardware vendors (Cisco, Polycom, Lifesize, Avaya, ZTE) have all dipped their toes into the VCaaS waters along with independent service specialists (Blue Jeans, Fuze, Glowpoint, Zoom, and scores of others), but Highfive is doing so in a way that shatters the tradition, because:

1) Highfive will sell direct. Time at last that someone recognized that few traditional video conferencing specialist channel partners are interested in reselling a $795 hardware product and a $20/month service. Trying to move low-cost hardware and even lower cost monthly services through a reseller channel (or even worse, through a two-tiered distribution network) is indeed like pushing on a rope. It's easy in the beginning to think that a thick enough rope will work. In cases like Highfive, the Internet becomes an excellent vehicle for disintermediation.

Highfive will need to execute on a cohesive strategy for sales and support that makes direct selling feasible. Success with this go-to-market strategy will rest on whether Highfive has thought through the relationships between the 3 P's--product, positioning, and price--with depth and precision. Few in the video conferencing industry have succeeded in this regard (or even attempted such a strategy) in the past. But the times are a-changing. Amazon's Mayday button and Nest's thermostat website are examples that show it can be done.

2) Highfive is selling both hardware and services, a spin on Apple's hardware + software strategy. This duality gives the company the ability to make everything work smoothly and over time to add features and functions easily. None of the vendors mentioned above, with the possible exception of Lifesize, have deliberately co-joined a hardware platform to a service delivery, optimizing each for the other.

3) Highfive is thumbing its nose at the installed base of approximately 1.5M industry-standard room video conferencing systems. There is no interoperability story here for Highfive. This omission has proven to be a fatal error for every vendor in the past because users stayed away in droves, claiming they wanted their small room systems to communicate with desktop systems, conference room devices, and even telepresence suites. Skype suffered from an interop story as well, back in the beginning, but managed to reach over 100M users before the Microsoft takeover. Highfive may be hoping for the same level of "failure."

Pull all three of these factors together and you have a picture of a new vendor in the video conferencing industry following "the road not taken."