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Pexip and Videxio Unveil Merger Plans

The Wainhouse Research Blog

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on Unified Communications & Collaboration


Pexip and Videxio Unveil Merger Plans

By: -
9 Oct 2018

Pexip and Videxio - two providers of hosted video conferencing capabilities - this week have announced for a merger expected to be completed by January 2019.

The deal brings both opportunities and challenges for the combined operations of a new company that will blend Pexip's approach to providing hosted video conferencing capabilities as enterprise infrastructure with Videxio's business model of selling hosted video conferencing solutions as a service.

Since its founding in 2012, Pexip has cultivated an image that casts the company as the "Switzerland" of hosted video conferencing by offering solutions that enable interoperability between an array of video conferencing solutions and services.

The Pexip Infinity platform - sold exclusively via the reseller channel - offers enterprises the ability to host full-featured video meetings that feature industry-leading interoperability between disparate video conferencing platforms as encountered both within an organization and when including external participants. The Pexip solution, for instance, makes it simpler for users of Google Hangouts and Microsoft Skype for Business / Teams platforms to connect into a meeting with other attendees using web browsers and/or more traditional SIP-based group video conferencing devices.

Pexip also provides its infrastructure solutions to service providers, including Videxio, that employ Pexip as the technology foundation for turnkey hosted services that are packaged as end-to-end video meeting solutions for business users.

The planned Videxio deal creates a delicate balancing act for a Pexip that aspires to maintain its position as an independent video conferencing platform provider. Now, as a seller of its own video conferencing services when combined with Videxio, Pexip could be seen as a direct competitor to the video conferencing service providers that are using the company's platform.

Pexip, however, is positioning the addition of Videxio (which also does not sell direct to users) as a development that expands the scope of infrastructure that its partners can leverage in developing their own differentiated hosted service. Videxio, for instance, can offer regional service providers access to the global points of presence needed to support video meetings in international markets. Such infrastructure enables Pexip partners to forego the costs of developing a global presence and instead emphasize product development that helps them to address the specific needs of their customers, said Pexip CEO Odd Sverre Ostlie.

"We will be on the only provider in the market that provides service providers with flexibility and the ability to differentiate," said Ostlie, who will serve as CEO of the combined company.

Upon first hearing news of the Pexip / Videxio mash-up, I was skeptical of Pexip's prospects for sustaining its role as an "honest broker" in the middle of the video conferencing integration ecosystem.

After hearing company management lay out the rationale for a deal in a conference call with analysts, however, I now believe that there's a better-than-even chance for Pexip to retain its role as video's Switzerland. Most convincing was the revelation that Pexip and Videxio already both supply features and technologies to a relatively large, overlapping set of service provider partners.

Certainly, the deal opens the opportunity for the combined company to benefit from economies of scale. Both Pexip and Videxio say they are currently profitable and have seen revenues double in each of the last three years. The merged company will have about 160 employees.

The merged company will operate under the Pexip name. Videxio CEO Tom-Erik Lara will take on the role of "chief commercial officer" for the newly combined organization. The company has yet to determine whether it will continue selling its hosted service under the Videxio brand name.