Lifesize Splits from Logitech, Reinvents Itself for SaaS Market

Lifesize, an Austin-based provider of video and web collaboration technology, has broken away from parent company Logitech (LOGI) as it works to make a new name for itself in the software as a service (SaaS) market.

Lifesize announced its plans to split from Logitech last month, after receiving $17.5 million in venture capital from a trio of Silicon Valley investment firms, including Red Hill Ventures, Sutter Hill Ventures and Meritech Capital Partners. Logitech will continue to invest in Lifesize, however.

Company CEO and founder Craig Malloy said he hopes Lifesize can carve out a place for itself in the cloud-based collaboration market, especially in terms of providing channel partners and customers with a unified communications offering that integrates the company’s systems with the rest of its enterprise portfolio.

But to achieve this, Malloy said Lifesize needed to break away from Logitech’s ownership.

So how does a company rooted in the decidedly “old world” practice of selling on-premise collaboration technology hope to compete with born in the cloud startups? Start from the ground up, according to Malloy.

After founding Lifesize in 2003 as a purveyor of HD conference systems for the enterprise community, Malloy sold the business to Logitech in December 2009 for $405 million in cash. For a time, Lifesize profited from the acquisition, despite Malloy’s exit from the company in late 2011. However, Malloy foresaw the growth of subscription-based collaboration services and worried that his former company wasn’t equipped to play in the new space.

“You could see that the video communication business was ripe for disruption, that there was going to be this huge product transition over the next couple of years,” he said, in an interview with The VAR Guy. “And Lifesize was not well prepared to take advantage of that.”

Malloy rejoined Lifesize in 2013 with the goal of helping the company to compete with rivals such as Blue Jeans Network and Polycom. But to do so, Lifesize needed to do a complete revamp of its product portfolio if it wished to be competitive in the newly emerging SaaS delivery market.

“We were facing a little bit of an existential crisis,” he added. “We could see that this [change] was going to happen, and we had a decision to make whether to completely reinvent ourselves and become a leader in this new space… or we could choose to try to ride it out in a declining market.”

Under Malloy’s guidance, Lifesize reduced its headcount and turned away from its old solution portfolio as it sought to rebrand itself as a provider of cloud-based collaboration solutions. The company also restructured its C-suite with a “smaller, leaner executive staff,” according to Malloy.

Lifesize released Lifesize Cloud, its first SaaS-focused product, in 2014, and has since gained 2,000 monthly subscribers. Going forward, the newly independent company will use its latest batch of funding to increase demand generation and strengthen its brand, while working to capture new partners and customers.

“This is an exiting step for Lifesize and is the result of the tremendous work we have done to create a unique offering in the video conferencing and collaboration space,” said Malloy. “Standing as an independent company will allow us to invest more meaningfully in our product roadmap and be more responsive to the market and our customers, which puts Lifesize on a path for impressive growth and success.”