Polycom (Nasdaq: PLCM ) has turned the tables on the teleconferencing market. Or is Hewlett-Packard's (NYSE: HPQ ) CEO just playing to his strengths?
The minuscule teleconferencing specialist has agreed to buy HP's Visual Collaboration division for $89 million. This deal was supposed to go the other way around, as cash-rich HP seeks plug-in acquisitions, but that wasn't in the cards.
Instead, HP is shedding a hardware unit. That makes plenty of sense, given fresh-faced CEO Leo Apotheker's software-heavy background. Why not trim down a few low-margin hardware units and refocus on what the boss knows best?
The deal makes Polycom the go-to solution for HP customers with an interest in teleconferencing, and includes a two-way commitment to provide Polycom applications for HP's WebOS platform. Before you scoff at that idea, remember that HP has extended that software from a pure-play mobile platform onto stationary gear such as printers. Teleconferencing systems would just be another step in that journey away from HP-Palm's now insignificant stake in the smartphone industry.
The agreement also precludes any kind of relationship -- acquisitive or otherwise -- between Polycom and chief rival Cisco Systems (Nasdaq: CSCO ) . If there is a more heated rivalry in Silicon Valley than that of Cisco and HP in the era of Cisco-branded server systems, I haven't been told. Spherical green pigs will party with angry, red birds before those two sit down to sing "Kumbaya" again.
Teleconferencing is suddenly hot again, after Microsoft (Nasdaq: MSFT ) spent $8.5 billion to acquire video-and-voice communicator Skype. Another Icelandic ash cloud stretching across Europe also heightens the videochat industry's profile while it lasts. So it's not surprising to see Polycom strike a deal -- though the way it all worked out might raise a few eyebrows.
Be ready to put two and two together the next time Polycom makes a seemingly unpredictable move. Just add Polycom and a few key rivals to your Foolish watchlist, and you won't miss a thing: