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Polycom to deal with Hewlett Packard

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Polycom will buy Hewlett-Packard’s (HPQ) cutting-edge videoconference business in an US $89 million deal. Polycom agreed to purchase Palo Alto-based HP’s Visual Collaboration business, including the Halo products that were jointly development by HP and DreamWorks Animation in 2005. The deal is a win-win deal for both customers. HP is focusing its business on software and products and services delivered through Internet-based, or “cloud,” computing, videoconferencing, more of a telecommunications business. Polycom will be able to deploy the new array of videoconferencing systems to hawk every kind of unified communication, including Web-, video- and audio-based systems. With this deal Polycom can become even stronger player in a market with a range of products such as prosaic tripod-shaped audio conferencing phone to the top-of-the-line video products from HP. The products are conceptualized on the Halo technology, a high-end videoconferencing system. Polycom will give tough competition to Cisco (CSCO) and Logitech. There is a lot of opportunity in this market for Polycom as it ties up with Microsoft. Revenue in the fast-expanding videoconferencing and telepresence market totaled US $2.2 billion in 2010, up 18 percent from the year before, Infonetics Research, a market analysis firm, reported earlier this year. Revenues should more than double to US $5 billion by 2015, Infonetics estimated. Polycom plans to integrate the HP offerings into its own line of products. Hewlett-Packard also agreed to exclusively sell Polycom’s products to HP customers. It is also seen that Polycom will integrate HP’s video conferencing systems into its own line of products. Plus, Polycom will create video apps for WebOS, a mobile operating system that HP owns through its purchase of Palm, a pioneer in hand-held devices.

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