Microsoft Joins Polycom's Open Visual Communications Consortium

Polycom (NASDAQ: PLCM) scored a major vote of confidence this week when tech giant Microsoft (NASDAQ: MSFT) joined the Open Visual Communications Consortium (OVCC), a group of companies spearheaded by Polycom tasked with developing industry standards-based platforms for high-quality video collaboration.

Microsoft, which joins as a board member, adds to a growing list of companies in the OVCC that includes heavy hitters AT&T (NYSE: T) and Verizon (NASDAQ: VZ). The most recent members are Tata Communications, ACT Conferencing and Kathea—bringing the total membership to 23 companies.

Members are committed to closing connectivity and service gaps that have prevented video communications between companies by specifying use of standards, best practices and connectivity agreements, with the aim of providing seamless connectivity between a huge array of networks and devices — no small task.

The first services from OVCC, which launched just six months ago, are scheduled to hit the market later this year.

According to the Worldwide Enterprise Videoconferencing and Telepresence report released in March by IT research firm IDC, the videoconferencing market showed strong growth, touching $807.9 million in the fourth quarter of 2011—a nearly 20 percent increase from the same quarter in 2010. Year-over-year revenue grew by more than a quarter.

Despite robust market growth overall, Polycom’s Q1 revenue growth rose just 7 percent year-over-year, and the company, which acquired HP’s visual communications biz last year, noted it fell short of expectations. Is this a sign the industry is slowing down or could it be just a bump in the road?

While VARs specializing in the telecom space shouldn’t feel the need to panic just yet, in an increasingly crowded unified communications (UC) space — Cisco Systems/Tandberg, Logitech/LifeSize and Vu Telepresence, just to name a few — Polycom’s underwhelming growth should be something to watch.