A leading provider of video and audio conferencing equipment and related network infrastructure, Polycom, Inc. (PLCM) recently partnered with a reputed social business solution provider, Jive Software to combine its popular HD video communication service with the latter’s other business solutions in order to provide value-added service to the Jive customers.
Presently, large organizations are increasingly implementing different social interactive services like Facebook, Twitter and Youtube to enhance customer relation as well as for retaining customers. Such services will enable these organizations to get closer to the customers, which in turn will help them to know their taste, preferences, likes and dislikes. Recently, such services are gaining significant momentum and those companies involved in providing support to these medium and large-sized organizations are referred as social business solution provider.
The recent partnership with Polycom will enable Jive, which provides such services, to offer diverse HD video services to its clients. The service to be provided by Polycom includes video chats, group video calls, record video meetings or messages for archiving, training, and ongoing collaboration. Moreover, Polycom’s HD video service will be supported by user-friendly RealPresence Platform. Hence, we believe that these interactive services will have a better impact on end customers, thus driving business growth.
Polycom is well positioned financially to pursue its future ventures. The company is developing video conferencing application for smartphones and tablets. With the growing popularity of smartphones and tablets, Polycom will have huge growth opportunity going forward.
However, we remain concerned regarding the fiercely competitive nature of the video conferencing industryand the future business infrastructure spending by enterprises in the European regions. Cisco (CSCO) has emerged as the main rival of Polycom, after it purchased Tandberg TV of Norway.
We, thus, maintain our long-term Neutral recommendation for Polycom, Inc. Currently, Polycom, Inc.has a Zacks #3 Rank, implying a short-term Hold rating.
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