Video Competitors: Avaya's Radvision Buy 'Disruptive' For Channel

Avaya's planned $230 million acquisition of Radvision won't be the market-disrupting game changer that Cisco's $3.3 billion pickup of Tandberg two years ago was, but it'll definitely put Avaya in closer competition with the titans of the videoconferencing space -- and at odds with some of its existing video technology partners.

The acquisition, unveiled Thursday after several months of speculation, gives Avaya native videoconferencing technology, from components to endpoints to mobile applications, as part of its overall unified communications and contact center portfolios. It gives Avaya a definite leg-up in the hot enterprise videoconferencing market where Cisco and Polycom dominate, and which Infonetics Research pegs at being a cumulative $22 billion spend by enterprise customers between 2012 and 2016.

Avaya plans to integrate Radvision's video infrastructure endpoints with Aura, its virtualized UC platform, although thanks to Radvision's open standards-based technology, Avaya's platform and Radvision's products will be interoperable on day one, said Nick Francis, Avaya's vice president of sales and marketing, video collaboration.

No question the Radvision buy changes Avaya's existing video relationships, Francis acknowledged. Avaya's major partnerships are with both Polycom, as a strategic vendor ally and for joint product development and marketing of video, voice and collaboration products, and LifeSize Communications, as an OEM partner for videoconferencing products and a limited reseller.

"We had a partnership with Polycom that didn't play itself out in the manner it was expected to," Francis told CRN. "We have the partnership with LifeSize, but what we were forcing our customers to do is piecemeal a total solution together. We had different parts of video but we didn't have the total solution, and as you can see from the marketplace, the need for that solution is growing at a very high rate."

Next: The Future Of The LifeSize Partnership

Industry observers expect the LifeSize partnership to dissolve. Francis said Avaya will continue to support the LifeSize agreement for the moment, though he anticipates Avaya's emphasis moving toward its future in-house Radvision portfolio.

"We made an acquisition of what we consider the most competitive product available," Francis said. "We will continue to support our [LifeSize and Polycom] agreements. But we acknowledge that we will take [Radvision], enhance it with our own conferencing and applications and Aura, SIP and Session Manager support. We will be focused on what we purchased."

Reached by CRN, a LifeSize representative said Avaya and LifeSize's shared partners and customers will continue to be supported.

"Our resale relationship provides customers with our innovations in mobile solutions, virtualized infrastructure and cloud videoconferencing along with our best-in-class, [Avaya] DevConnect-certified HD endpoints," the LifeSize spokesperson said. "We can assure our shared partners and customers they will continue to have access to LifeSize's industry-leading solutions."

Polycom went on the offensive Friday, saying Avaya's move will actually help its own videoconferencing sales.

"The acquisition will cause disruption in Avaya's channels and dissolve the existing Avaya and LifeSize OEM relationship," said Polycom in a statement e-mailed to CRN. "The Avaya and Radvision solution integration will likely take multiple quarters and immediately opens the opportunity for Polycom to gain share and sell even more RealPresence Video through Avaya channels."

Radvision's portfolio is smaller than Polycom's and can't support the "diverse needs of enterprise and service provider customers," Polycom argued.

"Avaya is buying a struggling company in Radvision, with minimal market share, annual revenues of less than $100 million, and revenue declining 18 percent in Q4 2011 versus Q4 2010," Polycom said.

Polycom, which is a technology partner in Avaya's DevConnect program, expects to continue providing products that integrate with Avaya's various platforms, including Aura and IP Office, the company said.

Other competitors see Avaya's move as validation for their focus on videoconferencing. Avaya, which by most analyst estimates narrowly leads the global market share for unified communications, did not have anything close to the end-to-end videoconferencing product portfolio it will obtain thanks to the Radvision buy.

Ofer Shapiro, CEO of fast-rising videoconferencing upstart Vidyo, said Avaya's move validates just how important videooconferencing is for every networking and communication company's go-to-market strategy.

"The video conferencing industry is witnessing rapid growth and will be dramatically different in two years as this functionally is added to every form of communication and workflow," said Shapiro, a former senior vice president of business development at Radvision, to CRN.

Representatives for Cisco, which according to Infonetics controls 52.5 percent of the global enterprise videoconferencing market, declined a statement, saying Cisco doesn't comment on other companies' acquisitions.