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Polycom Inc. (PLCM - Analyst Report) – the market leader in open standard based unified communications (“UC”) affirmed that it has entered into a strategic agreement with AT&T Inc. (T - Analyst Report), to offer cloud-based video conferencing services to different organizations. According to the company, the collaboration will mobilize and virtualize video meetings, thereby easing the video communication process for the businesses.

As part of the new initiative, AT&T will install the Polycom RealPrecense platform into AT&T Telepresence Solution Video Infrastructure, thus enabling the telecom giant to offer on-demand virtual meeting room capabilities for its business customers. The flexible and easy to use video conferencing service will increase customer choice under the interoperability platform and will be delivered through AT&T Business Exchange.

Polycom’s RealPresence is a state-of-the-art unified communications technology that integrates video conferencing and instant messaging while enabling data transfer from one communications platform to a different platform. Recently, Polycom collaborated with the research division of IBM (IBM - Analyst Report) to explore and develop new cloud-based video technologies that will run on its RealPresence platform.

To date, organizations used to buy the call control gear, which when joined with mobile endpoints connected video meetings for them. But now, AT&T wants to build its own call control infrastructure, so that customers can simply use it by paying a monthly fee. This approach will help the customers to reduce their capital expenditure on equipment, thus enabling them to get the services at a lower cost.

The service from AT&T enables multipoint video connectivity within the same company and will additionally provide high definition video services. The tie up will not only allow the AT&T Telepresence Solution customer’s access to Polycom’s RealPrecense video platform in 40 countries but will also open a new revenue stream for AT&T.  

Cloud-based video conferencing service is on the rise as organizations around the world look to accelerate their video enabled communication. AT&T’s expanded business customer base provides a significant opportunity for Polycom to expand its RealPrecense platform. Previously, AT&T had an exclusive tie up with Cisco Systems Inc. (CSCO - Analyst Report) for its Telepresence Solution.

We believe that this strategic partnership with AT&T will boost performance for Polycom and strengthens its position in the immersive Telepresence market, where it has been battling with Cisco for the top position.

We maintain our long-term Neutral recommendation on Polycom Inc. Currently, it holds a short-term Zacks Rank #3 (Hold).

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