Teleconference specialist and Motley Fool Rule Breakers pick Polycom (Nasdaq: PLCM) is in play after lengthy buyout talks with private equity firm Apex Partners came to light last week. At the time, I could see a bidding war erupting over this hot ticket, bringing in potential buyers like IBM (NYSE: IBM) or Hewlett-Packard (NYSE: HPQ).
But Polycom just tipped its hand a bit, and I don't see anybody buying Polycom anymore outside of a private equity takeover.
So what happened that made me change my mind? Well, Polycom just expanded its partnerships with both Microsoft (Nasdaq: MSFT) and HP wherein Polycom becomes central to both companies' plans to sell unified communications solutions. That's the concept of baking video, voice, and data communications into a single, centrally managed package, in case you were wondering. In other words, unified communications is an attempt to shrink the distances of the business world and increase collaboration (at first -- consumer-level services will probably lag by many years).
I knew that Polycom had healthy partnerships around the tech industry before, of course -- that's true of nearly everybody that matters, after all. But the fact that this company takes pains to expand its business commitments in multiple directions at once while also being considered a buyout target sings echoes of TIBCO Software (Nasdaq: TIBX) to me. TIBCO, if you don't know it yet, is an enterprise software outfit that would look great in the clutches of someone like Microsoft, IBM, or Oracle (Nasdaq: ORCL) -- if the company didn't count its independence as one of its greatest business advantages.
TIBCO is the glue that ties many data centers together, providing a structured information flow that programs from nearly any vendor can hook into. CEO Vivek Ranadive calls his company the Switzerland of enterprise computing. And Polycom's double move, amplified by its timing, shows me that the company wants to be exactly that in the burgeoning teleconference industry.
So let Cisco (Nasdaq: CSCO) buy Tandberg for a vertically integrated networking-and-video solution while Polycom stays fiercely independent and partnering with everybody else. Visual communications is a small industry today, but poised for 17.6% annual growth over the next three years, according to Gartner. And Polycom gets a healthy slice of that growth.
