Cisco and Vidyo have made aggressive moves toward cloud-delivered services. Zoom has always been there. What are your thoughts on premises-based vs. cloud-delivered video services?
I would never frame it as an either/or situation -- more horse for courses. The trend toward use of cloud is clear, but we still sell a good amount of on-prem gear (more than we originally modeled). The other thing we hear a lot is that people want hybrid solutions -- some elements on prem and some in the cloud. And then there are some regions (e.g., China) and industries (e.g., government) that want the security and control of having the stuff on prem. Nothing actually ever goes away in the tech world, and I think we will continue to see customers keep on-prem systems for the foreseeable future.
We confirmed last year that we don't intend to offer VaaS ourselves, which means we can effectively partner in a non-competitive way with VaaS providers such as Zoom and others. We see it as a new opportunity to grow the sales of Polycom video endpoints. As cloud providers move further up to serve larger enterprises, the demand for enterprise-grade room solutions grows with them. And that is something we are very very good at and happy to provide. It's kind of like the phone play but now for video. Of course it is harder, as video is not really standardized to the extent voice is, but the opportunity is great. We are starting to see momentum and the value we can provide in the room around audio quality and video experience makes us a very attractive partner. I should note that we have some customers like BT, SoftBank, and Pragmatic that are using our video technology to provide their own video services, which is another growth opportunity for us.
Last year we also announced that we would leverage the infrastructure talent and technology to create a video interop service with Microsoft, called RealConnect for Office 365. (Though I confess I like our internal code name, Aqua, so much better; that's how I typically refer to it.) With Aqua, we can help customers who want to make the move to Office 365 but want to leverage their existing video endpoints -- be they from us, Cisco, or someone else. Again, a great growth opportunity as it is giving us access to Cisco accounts, which are essentially greenfield for us.
The technology industry and Silicon Valley get criticized for the shortage of women in leadership roles. What's the best way to go about remedying that situation?
I don't think there is a silver bullet here. At Polycom, 40% of our executive team is female. I was fortunate to "grow up" at a time when the industry was more geek and less bro. I wish I knew what the remedy is! I guess the good news is that the topic is getting a lot of play in the Valley and you are starting to see companies change some of their hiring practices (requiring diverse slates, resumes without names, etc.) which is a positive step. It will take conscious effort on the parts of both women and men to make sure we are looking for talent in an open-minded way.
For several years Polycom has worked closely with Microsoft and Skype for Business with regards to both telephony and video. However, there's considerably more options for certified devices and services today than in years past. Have the benefits of this partnership played out?
Microsoft was one of the drivers of Siris acquiring Polycom, and the relationship between Microsoft and Polycom remains quite close. We do this not because we're nice guys but because it is mutually beneficial from a business standpoint. We are the only partner, for example, to offer the full range of products (phones, video systems, interoperability services, etc.) for Skype for Business, Office 365, and now Teams.
Coming as I do from the PC industry, I've spent a lot of my career working with Microsoft. So I am not so naïve that I'm expecting an exclusive relationship -- and we wouldn't want that sort of "monogamy" either! As we build out our ecosystem, I see Microsoft and BroadSoft as key "anchor tenants" and, as said, we are actively forging new relationships. Tech partnerships, if they are to be more than a press release, are about business results and driving value for customers together. The minute you're not delivering value, there's no point to the partnership.
The good news is that customers are seeing the value Polycom brings to the Microsoft ecosystem, as evidenced by our market share in phones (>70%) and the strong reception we are seeing to our native Office 365 integration with Polycom Group Series -- and we'll have it for Teams as well. We are the only vendor to have that native integration with video endpoints. As we ramp up our MSR and RealConnect services and prepare for Teams, we will have a good story for our customers and a great business opportunity for Polycom. Can't ask for more than that.
Your spouse is the CEO of the National Kidney Foundation. Does your proximity to his work impact you as a business executive?
My husband, Kevin Longino, is a recipient of a kidney transplant himself as he has the same hereditary condition that killed his grandfather in the 1950s (pre-dialysis, pre-transplant days). Consequently, the work he does -- raising awareness of kidney health (most people don't know they have a problem until it's too late), eliminating preventable kidney disease, working to increase the supply of donor organs through living donor transplant programs, and improving the lives of dialysis patients through clinical research -- is very real to me. We got lucky. Nearly every week he's got a story about someone who died waiting for a transplant. It's heartbreaking, and a reminder to be thankful for every day and to give back however you can. By the way, have you signed your donor card??
As a matter of fact, I have. Thanks Mary, and may you and Polycom have a wonderful second year and beyond.
Dave Michels is a contributing editor and analyst at TalkingPointz.
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