UPDATE 2-Polycom names CEO as Cisco threat looms

By S. John Tilak BANGALORE, May 10 (Reuters) - Polycom Inc named a new chief executive as the video conferencing company braces for competition from Cisco Systems Inc, which acquired rival Tandberg last month. The company named Executive Vice President Andrew Miller, who joined Polycom from Tandberg in 2009, as president and chief executive, effective Monday. Miller succeeds Robert Hagerty, who will step down as CEO and resign from the board. Shares of Polycom rose 6 percent to $30.99 Monday on Nasdaq. The appointment of Miller, who was CEO of Tandberg from 2002 to 2006 and has also worked with Cisco, comes as media reports suggest that Polycom could be exploring a sale of itself. Analysts consider Cisco to be a formidable threat to Polycom, with some estimating that it could lose share to the networking behemoth over the long run. Polycom's strategy to counter Cisco has been through partnerships with technology companies. "We have an excellent opportunity to meet and exceed Cisco in the marketplace," Miller said in an interview with Reuters. "The reason is simple: With partners such as Microsoft , Hewlett-Packard Co, IBM and others, we offer the customer a better alternative." On the technology front, the company was at an early stage in its partnerships with Microsoft, HP, IBM, Juniper Networks , BroadSoft Inc, Avaya Inc and Siemens Enterprise Communications, Miller said. "You'll see in the coming quarters a much deeper technology integration with each of them." Polycom, which is expected to post revenue of $1.17 billion in 2010 according to Wall Street estimates, can become a multi-billion dollar organization, Miller said. Since Cisco's bid for Tandberg in October, Polycom has been seen as a potential acquisition target. The company was working with Morgan Stanley to study strategic options, including a possible sale, Bloomberg reported last month. Polycom had been in talks with private equity firms Apax Partners and Gores Group, sources have told Reuters. Miller, who declined to comment if companies have approached Polycom about a possible takeover, said Polycom had a future as a standalone company. Polycom grew from a company with $37 million in revenue to $1.1 billion in revenue over Hagerty's tenure. During the 13 years, Polycom shares rose 11-fold. Videoconferencing, once a niche technology, is more widely used than ever. Hagerty will serve as an adviser to Miller and the board. David DeWalt, Polycom's lead independent director, will assume the role of chairman. The board plans to appoint Miller to the board following this year's annual stockholders meeting. (Reporting by S. John Tilak; Editing by Anne Pallivathuckal) Keywords: POLYCOM/ Keywords: POLYCOM/ (john.tilak@thomsonreuters.com; +1 646 223 8780; outside U.S. +91 80 4135 5800 +1 646 897 1898; Reuters Messaging: john.tilak.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.

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