Juniper will develop products where its networking gear will work with Polycom’s video conference systems. Juniper is less of a one-stop service compared to Cisco, but it has also been a formidable competitor that has been able to grow revenues up through 2008. The company is a tiny fraction of Cisco by a factor of more than 30, and its revenues in 2009 are supposed to be under 2008 and it is only expected to have growth in 2010 that roughly rivals the 2008 revenues.
The Juniper-Polycom alliance answers our own questions about what Polycom was going to do to address this important market. Polycom owned a large share of the higher-end conference room audio phones for much of the decade, but the new decade is going to be more about video conferencing rather than just audio-conferencing. Many analysts and market participants consider video conferencing one of the larger growth arenas in corporate and enterprise IT spending dollars. The big barrier has been cost and bandwidth, which still seem to get cheaper and cheaper depending upon geographies. For corporations, governments, and enterprises to be able to lower their costs and time restrictions of air travel, it is hard to argue against the futur3e of this segment.
The only argument today is if these companies have waited too long to get this alliance off the ground. The reactions here are mixed and may not be tied just to this news, Polycom is down over 1%, Cisco is down less than 0.25% and Juniper is up 0.8% in mid-day trading.
JON C. OGG
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