Why Juniper's Polycom Partnership Is Destined to Fail

Juniper Networks said today that it would team up with videoconferencing gear maker Polycom to form an alliance to deliver videoconferencing products that would ensure a quality experience. The products and services associated with this alliance will come out the middle of this year.

This is clearly a partnership made to ensure that Cisco‘s  move into the enterprise video conferencing space doesn’t go unchallenged. Gear from this alliance will be designed for providers offering videoconferencing services. Also as part of the partnership, Juniper routers will detect a Polycom video link and allocate the optimal bandwidth for it in real time.

When Cisco said it would buy Tandberg, a Polycom rival, for $3 billion last year, we explained why it had reason to move deeper into the middle market for video conferencing. However, I’m not sure that Juniper and Polycom are an ideal match, mostly because tying the product to the networking gear is a strategy that ultimately follows along with Cisco’s aims. As a smaller rival to Cisco, Juniper can’t win by playing by the same rules as the larger company — it needs to break them.

Cisco is tying its networking expertise to servers, video conferencing gear, consumer equipment and whatever else it thinks it can get away with, because it can guarantee a better quality of service, but also because that gives Cisco the means to keep its margins up. Cisco, may call its servers open, but they are not commoditized the way other servers are because Cisco has integrated this networking component.

By adding in the network layer, Cisco hopes to keep its servers from becoming the commodity that Dell’s, HP’s and IBM’s are. The same goes with things like the Flip camera that Cisco acquired when it bought Pure Digital. Sure it wants to boost bandwidth consumption so it can sell more telco gear, but it also wants to build a high-margin ecosystem around the home tied to its gear, in the manner that Apple has. But creating this end-to-end ecosystem tying the network and the device together isn’t the only way to ensure quality (although it may be the easiest).

Taking this back to the Juniper-Polycom deal, it’s not enough for these guys to shout, “Me too!” and hope that they can win playing Cisco’s game. A far more disruptive decision would be to open up the standards and ecosystem for teleconferencing and make Cisco-Tandberg gear look costly and less relevant. Polycom already delivers a standards-based telepresence products that will work with other non-proprietary gear (Cisco’s Telepresence is proprietary). Of course, by opening up too much Polycom and Juniper are facing an innovator’s dilemma that will almost certainly commoditize their hardware sales. They may be damned if they do, damned if they don’t.

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