Pennies on the dollar is certainly a disruptive technological concept.
For mere pennies, Vidyo provides video conferencing that’s as good and perhaps even much better than what the competition charges for by the dollar.
Its patented VidyoRouter architecture enables intelligent Adaptive Video Layering technology, optimizing video content through H.264 Scalable Video Coding (SVC)-based compression technology. Essentially, the technology enables a cost effective solution for highly sophisticated video conferencing with unprecedented error resiliency and low latency.
The company’s sales pitch is it offers a 10 fold price advantage over its competition, but the math actually works out much better, admitted Ofer Shapiro, CEO of Vidyo. For what the competition charges $6 per minute, Vidyo can deliver for 3 to 5 cents. And it does across multiple routers to multiple locations, enabling perfect video, blip free anywhere there’s Internet.
“Our biggest hurdle is our product sounds too good to be true,” Shapiro said. “When we approach the lower level people in organizations, they are almost afraid because they think the low price will also reflect the video quality. When we show the product to the CEO and they actually see it’s much better than the more expensive competition, their immediate response is, ‘Why aren’t we doing this?’ And then the lower tiers kind of snap into place. It’s amazing.”
Smooth words from a CEO, but he’s not the only one touting the system’s benefits. A report from Baird Research and Technology last November stated, “Vidyo prices its solutions significantly below Cisco and Polycom while providing the same or better quality video experience.” The report also noted that Cisco and Polycom were forced to drop their prices three to four times in order to compete with Vidyo, “the only vendor of size with H.264 SVC product that is generally available.” Likewise, PacificCrest listed Vidyo as one of its 2012 Top Enterprise IT Disruptors.
In fact, Vidyo’s platform has forced the competition to sales pitch technology ahead of release, Shapiro said. These companies use archaic MCU-based architecture developed 15 years ago. In response to market pressure, Polycom touted SVC technology in a press release in Spring of 2010, but haven’t yet released the product 18 months later, Shapiro said.
“We’ve got both Cisco and Polycom to announce products they don’t even have,” Shapiro said. “They’re releasing design wins for future systems. That’s when they get nervous. As Gandhi said, ‘First they ignore you, then they laugh at you, then they fight you, then you win.’ We’re reaching the point where the competition is leaping ahead of actual reality.”
Though Shapiro declined to state specific customer numbers, the Baird report states that it serves over 1,500 enterprise customers and 25 service provider relationships. The company has strong relationships in the healthcare, education, and manufacturing sector, with ramping traction in government and financial services. Vidyo serves SMBs and Fortune 500 companies, but has a strong uptake from companies in the mid-market with 100 to 2,500 employees, who seek high quality video without the million dollar price tag.
Vidyo’s cost effective approach to quality leverages a 20 percent annual growth rate. In a multi-billion dollar market, the sky is the limit.
“This is a huge market,” said Young-Sae Song, Vice-president of Worldwide Marketing for Vidyo. “We are confident we are putting all the pieces in place to be a very successful company. We have a very sound operational foundation for this company, and we’re confident we can scale this business and take advantage of this rich opportunity.”
The company has received venture investments from Menlo Ventures, Rho Ventures, Sevin Rosen Funds, Star Ventures and Four Rivers Group.