News Column

Austin tech firm Lifesize expands reach, offerings

May 21, 2014

By Lori Hawkins, Austin American-Statesman

May 21--

Lifesize, a pioneer in developing high-end videoconferencing systems, is shifting its focus to a lower-cost software service.

The company on Wednesday will launch Lifesize Cloud, which allows workers using smartphones, tablets, laptops and meeting rooms to communicate by video without traditional on-premise video equipment.

Lifesize CEO Craig Malloy said the shift to a cloud-based service was driven by free or low-cost consumer applications, such as Skype, FaceTime and Google Hangouts.

"These apps are embedded in all our devices, and the usage of them is exploding," Malloy said. "Users and businesses now expect to have the same simple experience at the office, connected across laptops and mobile devices. That's what we're delivering."

Lifesize was founded in 2003 by Craig Malloy and Michael Kenoyer, both veterans of the videoconferencing industry. The company raised $81 million from investors including Austin Ventures and Redpoint and introduced the industry's first high-definition videoconferencing system.

In 2009, Lifesize was acquired by Swiss company Logitech International SA for $405 million in cash. The company remained headquartered in Austin, where today it has 250 workers at its headquarters at Barton Skyway and MoPac Boulevard.

Lifesize had revenue of $119.8 million in the most recent fiscal year, which ended March 31, 2014. That marked a 12.5 percent decrease from the previous fiscal year, when the company reported $137 million in revenue. The company is profitable and is hiring in areas including product development.

Malloy left Lifesize two years after it was acquired by Logitech to become CEO of Austin-based software maker Bloomfire. He said Logitech recruited him back in February to help lead Lifesize through the technology transition.

"I was really excited about the big changes taking place, and I saw that I really had the chance to reinvent the videoconferencing industry again," he said.

Lifesize competes with startups offering free services as well as big players. Cisco Systems, which recently introduced a new service enabling users of different devices and services to connect for online meetings.

Malloy said Lifesize Cloud's cost savings will appeal to both small and large business users. The service starts at $25 a month for $25 users, or $7,500 a year. For companies with 1,000 employees, the cost is less than $10 a month per user.

"With the old system, a customer would have to buy hundreds of thousands of dollars of boxes and infrastructure and they'd have to put in their own data center and run it themselves with a team of people," Malloy said. "That's the way it has been done for the last 20 years."

Lifesize's new model, which requires little upfront investment, will accelerate demand, he said. "One of our limiting factors was the cost and complexity. Only a certain number of companies wanted to take that on. Now you just take our conference room device and plug it in. The speed and lower cost are going to expand the market and allow us to grow faster."


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Source: Austin American-Statesman (TX)

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