Re-post article by Jeffrey Burt from eweek.com
Three venture capital firms have invested $17.5 million into Lifesize, though Logitech will retain a 37.5 percent share in the company.
Logitech, which bought video conferencing vendor Lifesize Communications in 2009 at a time when companies were looking to the technology as a way of saving money, is spinning out the business, though it will keep a hand in it.
Logitech officials in late December announced that Lifesize was being spun out and had raised $17.5 million from several new investors—Redpoint Ventures, Sutter Hill Ventures and Meritech Capital Partners. Logitech will retain a 37.5 percent share in the company, which will run as a private entity. It will now be known as Lifesize Inc.
There were few details about Lifesize’s future plans coming from officials of either Lifesize or Logitech, though Lifesize CEO Craig Malloy said the company has “big plans moving forward” that officials will share in the coming weeks.
“We’re committed to delivering the most dynamic cloud-based video collaboration and meeting platform to the market, and to accelerating our exceptional growth into 2016 and beyond,” Malloy wrote in a brief post on the company blog, adding that spinning out the company “is the culmination of many months of hard work.”
In a statement, Logitech officials said the move will enable Logitech to continue its efforts to become a simpler and more nimble company and to focus more on its retail business. In addition, it will allow Lifesize to grow faster as a cloud-based provider of video conferencing services, and that the company will benefit from the experience in the video conferencing space of the three new investors.
The relationship between Logitech and Lifesize over the years has been an uncomfortable one at times. When Logitech bought the company in 2009, the deal came as the world was dealing with the crushing recession and companies were looking for ways to increase employee productivity while driving down costs, both of which video conferencing can address.
However, Lifesize was in a market that included such established vendors as Cisco Systems and Polycom, and in 2013 Logitech officials said they were considering selling the business, which at the time was seeing sales drop as competition increased and the video conferencing space continued its transition away from room-based equipment to cloud- and software-based offerings.
A year later, Malloy—who founded Lifesize in 2003 but had left in 2012 to pursue other opportunities—returned to the company and has since overseen an aggressive push into the cloud. In May 2014, three months after Malloy returned to the company, Lifesize launched Lifesize Cloud, a software-as-a-service (SaaS) offering the CEO said will deliver business-class video collaboration to organizations that is scalable, easy to use and affordable. Since then, the company has expanded on its vision to enable users to participate in conferences from wherever they are and on any device they choose, including notebooks, smartphones and tablets.
“For the very first time, we are enabling any company of any size to completely and cost-efficiently supply their entire staff with video conferencing,” Malloy told eWEEK at the time.
Lifesize’s embrace of the cloud addresses the growing demand from businesses trying to manage such trends as increasing workforce mobility, bring-your-own-device (BYOD) and social software. Lifesize is not alone in the effort: Cisco, Polycom, Avaya and other established players also are broadening their cloud portfolios, and a growing number of smaller vendors—such as Vidyo and Blue Jeans Network—also are gaining traction with cloud-only offerings.
Last month, analysts with IHS Infonetics said businesses are continuing to embrace video communications technologies and that the trend continues to be away from in-house infrastructure to cloud-delivery models. They said they expect revenue of cloud video conferencing services to hit $281 million in 2015, a 25 percent jump over the previous year.
Logitech also sells its own video conferencing equipment, though officials last year noted that the company’s products complement Lifesize’s cloud efforts.