LifeSize Undercutting Cisco TelePresence?

Is it possible to compete below Cisco’s radar in the unified communications market? Before you answer, check out the buzz over at LifeSize Communications — which specializes in HD video conferencing technology. LifeSize appears to be carving out a healthy niche for itself as a true TelePresence alternative to Cisco Systems. Here’s how.

TelePresence, in case you haven’t heard, is one of The VAR Guy’s hot technologies for 2008. It goes way beyond traditional videoconferencing. During a TelePresence demo hosted by Cisco, The VAR Guy felt as if participants in New York and London were sitting at the same table in the same room. Now, Cisco is testing TelePresence pods (virtual conference rooms and office spaces) for various vertical markets.

While Cisco educates the market about TelePresence, LifeSize is quietly carving out a slice of the industry for itself. The VAR Guy first wrote about LifeSize in this June 2007 blog post. Since that time, LifeSize has generated record revenue for its 4Q and fiscal 2007, with annual sales revenue nearly tripling, according to a company statement.

Giant Ambitions

Still, big competition looms around every corner. In recent months, Hewlett-Packard has made its own TelePresence push. And Cisco can now demonstrate TelePresence’s power in more than 100 of its office locations.

Cisco would likely argue that its TelePresence technology — which includes custom furniture to complete the virtual experience — is far more comprehensive than LifeSize’s offerings. In stark contrast, LifeSize’s focus typically involves less costly HD videoconferencing systems.

Does Cisco have better technology? That debate may not matter. Similar to how D-Link and Netgear successfully compete with Cisco in the SMB space, LifeSize has emerged as a cost-effective TelePresence option for many businesses.

Looking ahead, LifeSize is striving to optimize the company’s worldwide distribution footprint and generate triple digit growth for the company, according to a LifeSize press release.

Partner Push

With those goals in mind, the company last fall hired Dan Sibille, the former channel chief at Extreme Networks. Sibille is working closely with Adam Taylor, executive VP of worldwide sales and service, to expand LifeSize’s partner reach. The VAR Guy hopes to speak with Sibille within the next two weeks or so about LifeSize’s channel strategy.

Despite all the positive LifeSize buzz, keep the company’s momentum in perspective: As a privately held organization, LifeSize doesn’t report specific financial results nor does it disclose net income. So the company’s true profit picture remains a secret known only by selected company insiders and its early investors.

Also, short-term success certainly doesn’t guarantee long-term glory. Anybody else remember how Cisco ultimately destroyed billion-dollar rivals like Bay Networks and Cabletron? So far, however, the picture at LifeSize appears promising.