HP to Acquire Poly
HP plans to acquire device maker Poly for $3.3B. The acquisition of the enterprise headset, video and conference calling device business will complement HP’s February 2021 purchase of HyperX and its gaming gear. The deal should close this year.
HP announced the plan to acquire Poly (NYSE: POLY) for $3.3 billion this week. Poly formed as a mashup of Plantronics and Polycom in 2018 to consolidate the two company’s Unified Communications and Collaboration (UCC) devices and services. With the growing movement toward hybrid work, further consolidation was inevitable to scale solutions in the already $2.75B (Frost and Sullivan) global market.
“The rise of the hybrid office creates a once-in-a-generation opportunity to redefine the way work gets done,” said Enrique Lores, President and CEO of HP. “Combining HP and Poly creates a leading portfolio of hybrid work solutions across large and growing markets. Poly’s strong technology, complementary go-to-market, and talented team will help to drive long-term profitable growth as we continue building a stronger HP.”
This acquisition places HP as a solid competitor to Cisco and Logitech in the UCC device space. With the combination of Poly and HyperX in HP’s portfolio, the company will be able to offer a wide range of conferencing devices to businesses and consumers. HP’s engineering teams will likely seek synergy between their product lines while balancing the strong brands.
With the pandemic, the market for collaboration devices greatly expanded, with many home offices, bedrooms, and kitchens becoming conference rooms. The poor quality of built-in cameras on laptops, and the inability to adjust their position, drove demand for auxiliary devices during the pandemic. Consumer brands struggled to meet demand amid global supply chain shortages.
Video and more sophisticated audio technology aren’t only here to stay, but their markets will likely grow as use cases expand.
In the press release, HP stated they expect to achieve $500 million of revenue synergies by FY25 and accelerate Poly’s revenue growth to an approximately 15% CAGR over the first three years after closing. In addition, the company sees many sales synergies among the product lines.
With the Poly acquisition, HP will be able to aggressively bundle Poly equipment with individual and enterprise laptop purchases, making a single vendor solution more attractive. In addition, HP’s robust IT performance management software, when combined with device management, means that the hardware will be as easy to manage as it is to buy.
HP has recognized the need to support collaboration technology in its hardware for years. Examples include special collaboration keys for answering calls, managing cameras, and other features. This deal will likely see additional integrations. It would not be surprising to see consumer partners like Bang & Olufsen give way to Poly-branded sound and video components on HP laptops and monitors.
While HP does not offer its own video conferencing solutions, its hardware and management-centric position will make it an open partner across solutions. In the announcement, Eric Yuan, Founder and CEO of Zoom, said, “Highest quality audio and video has become an essential component of work across every industry, whether in an office, at home, or on the go. Bringing the Poly and HP offerings together will unlock new opportunities to partner with Zoom and turn any space into a hub for dynamic video collaboration.”
CIOs and IT departments will like this combination. Poly brought together trusted brands in Polycom and Plantronics. With HP, they now fall under a fully enterprise IT brand with the sales and service capabilities to deliver support across the spectrum of environments where people will be working. HP’s strong consumer presence means they support users in their homes. In addition, their small business offerings place them into many third spaces reemerging from pandemic lockdowns.
The Poly acquisition also helps position HP for the nascent metaverse where video and audio technology will act as a doorway into new experiences.
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Images courtesy of Poly.
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