Logitech's LifeSize Agenda
Page 1 of 1
What's behind Logitech's big $405 million acquisition of HD video conferencing vendor LifeSize? According to execs from both companies it's all about bringing video to all ends of the market.
During Logitech's analyst day event today in New York, Gerald Quindlen CEO of Logitech said that his goal is for video capabilities to be as pervasive as audio is today. Both Quindlen and Craig Malloy CEO of LifeSize also used the analyst day event as an opportunity take aim at their new joint competitor, Cisco (NASDAQ: CSCO) which they also credited with helping to expand the market.
"With a large player like Cisco getting into the market and not just with Tandberg but their marketing and positioning that they've been doing for years, doing all the advance marketing work and building awareness has really helped to validate the market," Malloy said.
According to Malloy, there only three main players in the HD video conferencing space: LifeSize, Tandberg and Polycom. In Malloy's view, LifeSize together with Logitech's financial and sales channel resources will now be in a better position to take share from competitors.
Cisco fits in at the ultra-high end of the market with its Telepresence systems, according to Malloy.
"Telepresense is a marketing term that Cisco coined, for a video communications studio," Malloy said. "The basic tenants of the Cisco Telepresense product experience are exactly our vision for the market, life size people and an immersive experience that replicates true human interaction."
Malloy said that the new Logitech combination with LifeSize will go beyond the high end of the market served by Cisco to extend the benefits of video conferencing to the broader enterprise market.
"The largest opportunity here is really why we came to together with Logitech to attack the mass market opportunity," Malloy said. "It allows a high-definition video product to be present in every office, every conference room and anywhere where people have a desire to connect with other people."
While LifeSize and Cisco are competitors, Malloy noted that the two vendors have collaborated in adhoc partnerships. In one case, Malloy noted there was a sales opportunity where an enterprise wanted a big Cisco Telepresence room for their main operations and then small units for local sales teams. As Cisco didn't have smaller units at the time, LifeSize collaborated on a solution for the joint customer.
As good as going public?
Logitech CEO Quindlen noted that the LifeSize brand would continue under Logitech. In his view LifeSize has established itself as well known brand in the HD video conferencing space for enterprises, while Logitech is known for its consumer devices.
Malloy was asked during the analyst event why he sold out to Logitech as opposed to going public. In his view, being acquired by Logitech is the same as doing an IPO.
"We view this as us our going public," Malloy said. "Why do people go public? They go public to get liquidity for their shareholders, we've done that. We've got additional capital for expansion. As a public company, there is an expectation of continuing to drive value in the business; we certainly don't see this as a terminal valuation event."