Vidyo's virtualized videoconferencing a potential game changer


Videoconferencing startup Vidyo, which has raised some $97 million in VC to date and is causing sector leaders Cisco (Nasdaq: CSCO) and Polycom (Nasdaq: PLCM) heartburn as it nips at their heels, has announced it's developed technology that allows it to offer videoconferencing using virtual servers, allowing its customers to scale without any capex.

Vidyo CEO Ofer Shapiro told FierceEnterpriseCommunications the new offering has been demoed on VMWare and Amazon servers, and that the quality has been "very good" with latency rates of 250 ms or less, comparable to hardware-based systems.

"This completely changes the videoconferencing landscape," he said. "Companies can now do in minutes, what it used to take months to achieve," in building out a telepresence initiative. "This technology is a breakthrough in the way that it changes the cost structure of the space. It's literally a democratization of videoconferencing technology." Shapiro said the demonstration delivered an HD video conference on more than 100 concurrent lines; virtualization in the video conferencing market has been limited to call control previously. The product is expected to roll out in 2012, he said.

Shapiro said the technology would allow service providers to offer unlimited videoconferencing multipoint scalability on demand to accelerate the adoption of high quality, universal video conferencing on any endpoint. "We think service providers will be excited to hear this message," he said. "There's no capex for them to expand into new markets, and the opex is also lower for them."

Shapiro said Vidyo has achieved strong traction with service providers, and that the company is seeing lower competitive losses as it's become more well known. Vidyo is white-labeled by a number of providers in broad applications, including Google+, and in agreements with Hitachi and Ricoh, among many others. "More companies are realizing that this is the architecture to choose," he said. "The opex and capex costs are significantly lower than our competitors and the quality is very good.

"At this point," he said, "the rocket science is over... now it all linear work."

ZK Research analyst Zeus Kerravala said Vidyo is the first company to demonstrate the impact of virtualized video conferencing in terms of scalability and economics on the most expensive part of the network infrastructure. "There is no longer a reason for video conferencing to be a hardware investment," Kerravala said. "Customers need to select a software-based architecture today that can address tomorrow's future growth needs."

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