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November 13, 2009

Logitech-LifeSize Deal Shows Industry 'Value': The Conference Group

By Amy Tierney, TMCnet Web Editor

Industry experts said the recent action by Logitech International’s to acquire LifeSize Communications shows the value businesses are placing on the video conferencing services sector.
“You have a hardware company now getting into the service industry,” Greg Plum (News - Alert), director of channel development for The Conference Group, told TMCnet in an interview. “That tells me that providers of hardware companies are seeing value offering [these] services. This is a positive for the industry.”
Logitech (News - Alert), a Switzerland-based provider of PC video communications, announced yesterday it would buy LifeSize (News - Alert) Communications, a provider of high definition video communication solutions, for $405 million. As TMCnet reported this week, the acquisition is intended to help Logitech expand its PC video business beyond the desktop with HD video conferencing. It would also give Logitech access to LifeSize's 9,000 video conferencing customers.
The acquisition, Plum said, would give Logitech “more firepower against the competition.” Some of the big-name competitors in the space include Polycom and TANDBERG, a Norway-based company. Yet Cisco announced last month it intends to buy TANDBERG for about $3 billion to strengthen the company’s position in collaboration market and expand its presence as a player in the video conferencing sector.
Anytime companies are consolidating, some challenges are sure to arise.
“Consolidation is a sign of the times,” Plum said. “One of the one negative effects of consolidation is customer fallout. When you have a large company stepping in and buying a smaller company, the customer that has enjoyed the white glove service of the company tends to suffer. That is going to be the challenge for Logitech - to maintain that high level of customer service that their legacy customers have grown to expect.”
Despite that, conferencing companies are looking for the silver lining of the announcement to benefit their businesses. For instance, the proposed Logitech-LifeSize deal could, in fact, have an outlying impact on The Conference Group (News - Alert), Plum said.
While The Conference Group offers video conferencing via a desktop solution, LifeSize offers more of an HD video tool – two different services and models. But the merger “makes us consider adding that type of service to our portfolio,” said Plum, who added that “video conferencing is certainly a technology that will meet today’s customers’ needs.”

Amy Tierney is a Web editor for TMCnet, covering business communications Her areas of focus include conferencing, SIP, Fax over IP, unified communications and telepresence. Amy also writes about education and healthcare technology, overseeing production of e-Newsletters on those topics as well as communications solutions and UC. To read more of Amy's articles, please visit her columnist page.

Edited by Amy Tierney

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