Pioneering Video Conferencing: Polycom CEO Bob Hagerty (Part 8)

SM: What happened after 9/11? I remember, I bought the Polycom stock and it did very well for me.

BH: We were ramping very, very fast through 1999 and 2000. Cumulative average growth rates in the 30’s and 40’s. After 9/11 it exploded even more for us, but for really horrible reasons. Then the financial services and other industries collapsed. All of the business we received was for conference rooms which did not have people in them. The equipment was not used.

Companies changed their workflow, but then they started laying everyone off and they did not have the people. We went up a rollercoaster and then went back down. Unlike other industries, the collaboration industry flattened. We went from high growth rates to extraordinary growth rates then flat. There was 3 quarters of extraordinary growth followed by three quarters of flat growth.

Then SARs happened, and our international market skyrocketed. After that, the Asia currency crisis caused the market to flatten. On top of all of that, there was the tech bust. We were doing well, but it was also a difficult time. We had to stabilize the company which was a different set of marching orders, strategies, and missions because when you are growing fast and then go dead flat there tends to be an over spin. We had to slow down spending and develop on a different cycle. Now we have come full circle. We went through these stable periods, 2003, 2004, 2005. In 2006 it started to tick up again, and 2007 is going even better.

This is for many reasons. First, globalization is a key. Companies are realizing what they have on their hands. They went whole hog into deploying all of these people in remote locations, but now they do not feel like they are a part of the company. Our solutions are seen as one of the tools that will help build the trust level, the work teams, and allow smoother operations.

The second is green. If you go to Europe, and it has now started in the US too, people are very aware of the cost of moving people around. People who are flying or just moving around the city, they are moving a lot of carbon. It is frustrating to fly 8, 9 hours to have a one hour meeting, but it is also very environmentally damaging. The green movement would have you think about all of the carbon being used for a one hour meeting.

The technology is also significantly better today. If you sell people video conferencing, they have a negative image of the way it worked in the past. It was not full duplex, the pictures would break up, and we used ISDN so you would sit there and call while all of the lines bonded. It was complex and hard. Most importantly, the user experience sucked.

This segment is part 8 in the series : Pioneering Video Conferencing: Polycom CEO Bob Hagerty
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