Vidyo Rising

It is clear we are in the midst of a major video transition. Video communications are breaking free from both traditional room systems and its group meeting paradigm into far more pervasive forms of communications. Video communications are becoming embedded in everything from our Internet “Hangouts” to our living room game consoles (Wii U). Who’s profiting from this disruptive transition? Vidyo.

“2012 was a pivotal year for Vidyo,” said Ofer Shapiro, Vidyo’s co-founder and CEO. “We have not only delivered tremendous business growth and market traction, but also initiated a measurable market shift that has completely transformed the video conferencing industry.”

Vidyo announced portions of its 2012 results including an increase in billings of 68 percent. It is a private company, but shared results from selected sectors including a 77 percent increase in its healthcare vertical and 54 percent increase in its enterprise sector. The company has driven down the cost of video partially by advancing the industry toward a software-based model.

The company distributes its products through three major “channels,” and its partners are growing too. Vidyo reports that its 25 top partners grew 435 percent over two years (Q111 - Q412). The traditional channel of AV Integrators, System Integrators and IT resellers (TeleVARs) are selling into a growing base of business accounts. Its second channel includes service providers that offer video services; this channel grew 24 partners including national carriers. The third channel consists of Solution Providers and OEM partners that embed Vidyo technology into separately branded offerings - this group includes Nintendo and several healthcare-related vendors.

A big part of the Vidyo story is its pricing model. Not only is its $950/port pricing substantially lower than alternative hardware-based products, but its licenses can be dynamically reallocated to different servers as needed. Larger organizations can “follow the sun” with their licenses. Combining the attributes of initial low cost, dynamic allocation, and software-based offers significant savings to end-users.

While Vidyo grew 68 percent in billings last year, Cisco and Polycom saw declines of 17 percent and 1 percent according to a study by Raymond James.The numbers are representative of the industry shifting toward software-based solutions. Polycom evidently agrees as it has announced plans to mimic Vidyo’s approach with its own software-based solutions that also utilize H.264 SVC.

Vidyo is a late stage growth company with over 2,000 business customers, 50 service providers, and 300 resellers globally. Not to mention some 65 million Google+ users that experience Vidyo solutions in Google Hangouts. Vidyo also reports seven OEM partners and over 50 partners embedding its technology into new solutions. Vidyo has 250 employees and is headquartered in New Jersey.