As Cisco Grows the Videoconferencing Market, Polycom will Benefit

August 27, 2010

There was an interesting article posted on Forbes about how Polycom will beat Cisco in the videoconferencing space. The article talks about how Cisco, now that it has acquired TANDBERG, is a “monolith in the industry,” suggesting that somehow Polycom is put at a significant disadvantage.

For all of those who have been working in the videoconferencing space for many years, there is one thing we all know too well: videoconferencing has always been a niche market. Cisco’s acquisition of TANDBERG actually has the potential to change the market significantly, moving videoconferencing from the niche market it is into a mainstream mode of communications. Video will be as ubiquitous as the telephone was before it.

What does that really mean for Polycom? Opportunity. Polycom will no longer be fighting with TANDBERG over a small niche market that sees only modest growth each year. Rather, it will be selling videoconferencing equipment into a very large market that Cisco will help to create. Even if Polycom’s overall market share shrank in terms of percentage, its gross revenues could rocket over the next few years as Cisco essentially paves the way to widespread use of videoconferencing.

These are very interesting times for the videoconferencing industry and there will be very few losers over the next few years.