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Polycom seeks edge over rivals with new videoconferencing product

Oct 8 (Reuters) - Polycom , which competes withCisco in videoconferencing, hopes to move ahead of thepack with its new cloud-based product in a market it says willbe worth $12 billion by 2015.

Videoconferencing is on the brink of widespread adoption astechnology moves from expensive and complex boardroom productsto technology that allows video communication on desktops,smartphones and tablets, and vendors are scrambling for theirpiece of the pie.

"Video is becoming more and more mission-critical, but ithas not been taken up massively because of interoperabilityissues and inconsistent user experiences," said SudhakarRamakrishna, president of Products and Services at Polycom.

Polycom said on Monday that its RealPresence CloudAXIS Suiteaddresses those problems because it will let customers addanyone on Skype, Facebook , Google Talk and otherbusiness video applications to their video conferences from abrowser via a hyperlink.

The product will be available to service providers and largebusinesses by the end of the first quarter, but Polycom will berunning limited trial runs in the current quarter, the companysaid.

Polycom has been at pains to fend off larger rival Cisco,which dominates the videoconferencing market with itsTelepresence virtual conference rooms, and competitors thatoffer free technology such as Microsoft's Skype, Googleand Apple's face time.

The success of the cloud-based product is vital to Polycom,which still generates most of its revenue from hardware-basedsystems as it shifts to a software-based model while rivalsmuscle in on its turf.

That transition is expected to impact earnings over the next12 to 18 months, analysts have said.

At the same time, rivals such as privately held companiesBlue Jeans Networks, Vidyo and Avaya as well as businesssoftware maker Citrix are making inroads with their owntechnologies.

However, Forrester Research analyst Philipp Karcher saidPolycom's product was impressive even if it was not the gamechanger Polycom claimed it is.

"It is an evolution," Karcher said, adding that there was alot of interest in browser-based video conferencing but thatCisco "is also moving very aggressively into the web browserparadigm with WebEx and WebEx."

Polycom's announcement may also be a preemptive move to makeitself more independent of Microsoft, which is a key user ofPolycom products in its Lync corporate video, email andmessaging product.

It is still unclear how Microsoft will incorporate Skype,but Polycom has acknowledged in its annual report the risk thatits products could be replaced by Skype.

Mizuho Securities analyst Joanna Makris has said anintegration of Skype into Lync would mean "game over" forPolycom.

Polycom's Ramakrishna said the product announcement did notchange the company's relationship with Microsoft, which was "akey strategic partner."

(Reporting By Nicola Leske; Editing By Ryan Woo)

((Nicola.Leske@thomsonreuters.com)(+1 646 223 6134)(ReutersMessaging: nicola.leske.thomsonreuters.com@reuters.net))

Keywords: POLYCOM VIDEOCONFERENCING/