SINGAPORE, March 20, 2012 /PRNewswire-Asia/ -- Avaya Inc. today announced it has signed an agreement to acquire Radvision Ltd., a leading provider of videoconferencing and telepresence technologies over IP and wireless networks. It will become the 2nd case in the video conferencing industry in 2012, followed by the recent acquisition of VCON by ClearOne.
So where does this acquisition leave both companies? Jessie Yu, Senior Industry Analyst, ICT Practice, Asia Pacific, Frost & Sullivan said, "On the positive side, both companies have lots to cheer about, especially in Asia Pacific region. One bright spot was the endpoints business (through the acquisition of Aethra Group) that witnessed overwhelming growth of over 50% in Asia Pacific in 2011, especially in growth economies of China, South East Asia and India. Asia Pacific composed of over 30 percent of the overall company revenues."
With the acquisition, Avaya has bolstered its portfolio to include video as part of its story. As it perhaps prepares for an impending IPO, this would be a better sell to investors who will be comforted by a complete product portfolio. Rohit Partha, Industry Analyst, ICT Practice, Asia Pacific, Frost & Sullivan said, "Video is also on the ascendency. Frost & Sullivan predicts that the video conferencing and visual collaboration market is expected to grow at a Compound Annual Growth Rate (CAGR) of nearly 20% in Asia-Pacific from 2011 to 2018. Growth is expected to be driven by an increasingly mobile workforce and the growing number of affordable video solutions. All of this augurs well for Avaya which has sought a deeper presence in video."
The deal also puts Avaya more evenly matched in the unified communications space with its big competitor Cisco in terms of product portfolio. It also provides a chance to rejuvenate its data networking portfolio which has not done any wonders. In Asia Pacific, video solutions from Radvision would be a supplementary product line in the overall Avaya business in the short term. "In the short run, Avaya is not yet expected to compete aggressively with Cisco and Polycom in the video conferencing market, from both product line and market penetration perspective. The most addressable market for Avaya to promote Radvision's video conferencing solutions is expected to be small-scale and instant video calls among Small-to Medium Business (SMBs)." Yu concluded.
Quick Summary: Implications for the industry
Video conferencing market entered a further consolidation stage, and video is buzzing the ICT industry again with the prevalence among and furthers approves the trend of converged network through data, voice and video.
Avaya's strategic partnership with Polycom that includes Polycom delivering an integrated UC solution for Avaya environments would probably fizzle out. It would also be interesting to see how Avaya's collaboration with LifeSize will pan out.
In Asia-Pacific, success of the acquisition would be largely contingent on the capability and efforts of Avaya channel partners.
About Frost & Sullivan
Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 40 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com.
MEDIA CONTACT:
Donna Jeremiah
Corporate Communications
E: djeremiah @frost.com
P: + 612 8247 8927
Jessie Loh
Corporate Communications
E: jessie.loh@frost.com
P:+65 6890 0942
Carrie Low
Corporate Communications
E: carrie.low@frost.com
P: +603.6204.5910
