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How Microsoft helps Polycom and vice versa

Analyst notes "tight" integration of Polycom telepresence and Unified Communications

Video conference vendor Polycom introduced Monday new technology for setting up telepresence conference sessions while also touting how its technology integrates with Microsoft's Unified Communications platform.

Polycom has been making video conference systems for years and has recently introduced more advanced "immersive telepresence" systems with high-definition video and screens large enough to make participants at a distant location appear life-size and seemingly in the same room as those participating locally.

In introducing its new Immersive Telepresence OTX HD 300 series, Polycom made a point of highlighting its "deep native integration with unified communications systems" (lower case, meaning all brands), but we spent a lot of time talking about Microsoft's Unified Communications (UC), the brand name.

Polycom's Laura Shay, director of product marketing, took me through a scenario where someone could set up a telepresence meeting with various participants in distant locations, but use UC features combining voice, video, e-mail and instant messaging to schedule the meeting, invite participants, reserve telepresence rooms, create an agenda and confirm the meeting with everyone.

It starts with a plug-in to Microsoft Outlook that creates a button with the Polycom logo within the program, Shay began. The meeting organizer goes through all the steps of selecting the time and date for the meeting, the participants and which Polycom telepresence rooms need to be reserved. "And I click on the little Polycom button and it auto-populates all the meeting details right there in my invite. Everything goes in," she said.

At the appointed hour on the day of the meeting, "I walk into that room and the Outlook Calendar is showing on the screen and I click here to join. I don't have to know anything. I don't have to know an IP address, I don't have to dial anything. I just join now," Shay said.

Tight integration with Microsoft just might give Polycom an edge in the telepresence market with its close competitor, Cisco, which pretty much created the telepresence market with the introduction of TelePresence in 2006. At the end of last year, Cisco acknowledged a reveneue run rate for TelePresence of $200 million.

Cisco's system has been heavily marketed with TV ads featuring the actress Ellen Page and product placement supporting roles in TV series from "24" to "30 Rock," in which characters spout Cisco marketing slogans -- "a self-defending network" and "the human network" -- as their lines.

While Cisco began focused on high-end studio installations, Polycom started in low-end systems and is moving upward. Its OTX HD 300 series offers HD-quality video using half the bandwidth of earlier systems.

Polycom's closest rival had been a company called Tandberg until Tandberg was acquired for $3.3 billion in April by -- wait for it -- Cisco Systems.

"Microsoft and Cisco are kind of becoming arch competitors," says Andrew Davis, a partner at Wainhouse Research. "Now that there is an intimate relationship between Cisco and Tandberg, it's not unusual to think that there might be an intimate relationship between Microsoft and Polycom." He hastened to add that he was not predicting a Microsoft acquisition of Polycom.

But Roopam Jain, principal analyst at Frost & Sullivan, says Microsoft and Cisco need to get along as well. "UC solutions [generically] must integrate with all communication applications like room-based videoconference and telepresence."

While Microsoft may desire tighter integration with Polycom equipment than Cisco equipment, it knows it needs to be interoperable with Cisco and other video and telepresence systems, Jain said. It still must support them "so users can leverage their existing investments and maximize their communication experience."

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