On this episode of the Futurum Tech Webcast – Interview Series I am joined by Dave Shull, President and CEO of Poly, a global outfitter of professional-grade audio and video technology. We had an exciting conversation about the growth the company has experienced in the last year and where Dave thinks the market is going as we return to working in person.
Pro-Grade Tech: The Next Major Tech Growth Spurt
In our conversation we discussed the following:
- How the company is poised for growth as demand for pro-grade tech increases
- How the demand for pro-grade tech is impacting the market
- Insight into how companies are making ‘work from anywhere’ possible
- How to maintain privacy and security when working with pro-grade tech at home
- An exploration into what sets Poly apart from competitors including Poly’s partner and ecosystem strategy
- Poly’s process of innovation for new consumer-friendly products that serve work, telehealth, school and social functions
Watch my interview with Dave here:
Or listen to my interview with Dave on your favorite streaming platform here:
Disclaimer: The Futurum Tech Webcast is for information and entertainment purposes only. Over the course of this podcast, we may talk about companies that are publicly traded and we may even reference that fact and their equity share price, but please do not take anything that we say as a recommendation about what you should do with your investment dollars. We are not investment advisors and we do not ask that you treat us as such.
Daniel Newman: Welcome everybody to the Futurum Tech Podcast and Futurum Tech TV. I’m your host, Daniel Newman, principal analyst, and founding partner at Futurum Research. Excited about this Futurum Tech Podcast Interview Series, where today I will have Dave Shull, CEO of Poly join me to talk about collaboration, hybrid work, pro grade technologies and why they are going to matter in a post pandemic world. Maybe even hit them up on the name change that the company most recently went through. So, without further ado, I’m going to bring Dave Shull into the show.
Dave Shull: Hey, Daniel. Great to be here. Appreciate it.
Daniel Newman: Dave, super excited to have you join me here. Been a while since I had you on a briefing. One of these days, we are going to do a live meeting. But given that you’re the CEO of a company that makes some of the world’s leading equipment for video conferencing, it would be ironical. I know that’s not a word, I just like saying ironical, for me to not do an interview like this using video conferencing in a video technology.
Dave Shull: No green screen. Nothing, right?
Daniel Newman: No, it’s good. I like your background. It’s a good background. It’s not as good as the NYSC, where I saw you on CNBC last, I think it was last week. But it’s a pretty nice background for these video interviews. And I got this step and repeat behind me so I can gratuitously promote Futurum Research in case anyone doesn’t know. I worked for Futurum Research. Quick question, before we get started. What camera are you on right now?
Dave Shull: I’m on one of our new P21s. It’s the all-in-one screen that has lining bars, and has a charging station up front for my iPhones. It’s perfect. It keeps you charged all day and hopefully makes you look as good as I can. I mean there’s limits to that. But our technology does what it can. So, it’s great.
Daniel Newman: You look great. The light is great. I’ve got lights all over my face and it might be just the time of day, but your lighter, you’re brighter, you look happy, you’re glowing. So, that P21 is doing its thing. We’ve had some time to engage over the course of the year. You’re pretty new to the company. A lot has changed. Growth is looking really good. I know some of those charts I looked at after your last earnings, very, very encouraging. Before I dive into my harder section of the questioning, how’s it going? Kind of any just quick sort of first impressions and during your first year at Poly.
Dave Shull: Yeah. So, been on the job about nine months, and it’s all been during COVID. I think we had our first hybrid board meeting here a couple of weeks ago and was able to meet all my bosses in person, which was amazing, was wonderful. This is a fascinating time to be in our industry, as you know, and there’s so much changing, changing so quickly. There’s so much demands. And so the chats with customers have been through the roof in terms of, okay, what do we do post COVID and how do we deal with hybrid meetings? And, Dave, I think every single meeting I want to have is going to be a video one and at least one person is going to be remote.
And so how do I deal with that? What kind of Poly gear and Poly solutions are out there to kind of help me sort it out. It’s definitely an exciting time to come into the industry. I would say even, I knew some of that, of course, since I interviewed in the middle of COVID. But it’s far exceeded my expectations in terms of just the massive demand shift that we’re seeing here as part of the return to work really. I think it’s changing the way we all plan to work going forward.
Daniel Newman: Yeah. There were a lot of businesses that were adversely affected. Then there were businesses that were absolutely catapulted by the pandemic. And you guys had a little bit of both. Part of your business was pulled back because of the live L, a lot of the call centers and stuff weren’t functioning in normal capacity. So, your headset business, but like your high-end pro video stuff and your video for their home-based has exploded. And like I said, those charts look great.
By the way, you also made a ticker change. I mean, maybe not really something that needs a lot of dive here, but finally after me looking up dollar sign Poly a hundred times at the end of quarters, when I’m trying to find it on Twitter. You guys actually finally are Poly when you were Ticker, because it was PLT for the longest time for Plantronics. And I thought it was always confusing. I thought that was a great move.
Dave Shull: So, May 18th, we celebrated our 60th birthday as a company. And that’s pretty amazing. From a heritage point of view to say, we literally put the first headset on the moon. That’s really, really impressive. And so I’m proud of that heritage. I’m amazed, actually astonished that two pilots got together back in 1961 and decided that they wanted a better way to talk to each other in the air and a better way to talk to the FAA. That’s phenomenal heritage. I’m a pilot myself. I love flying. So, it’s like, wow. To understand that kind of innovation going back to the 1960s is amazing. But we did the merger then with Polycom. Another company that has decades of proud innovation heritage. But to be clear, we’re operating under a new strategy, new leadership, new team approach.
And so I want to make sure we’re Poly. And I think we have a great brand and we need to embrace it fully and say, listen, we’re going to win. We’re going to win as one team going forward. And I think really the magic is having a completely integrated solution. And so we want to make sure that we’re operating under an integrated name as well. And so it was absolutely time to change the Ticker symbol on the NYSC. And it was a lot of fun to be in New York there and to be able to do that in person.
Daniel Newman: Yeah, absolutely. What a big day. So, let’s talk a little bit on the product side, the demand for pro grade tech, as I see it, is definitely increasing. How do you feel the company is positioned to benefit from this?
Dave Shull: It’s an interesting stat, that I asked the team to check three times, which is a 100% of the Fortune 500 use us, use some of our gear. That’s really an amazing testament, I think, to the quality of the tools that we’re providing. I keep saying we’re providing tools, not toys. This is pro grade tech. And so we’re selling into the CIO’s and the CHROs of the Fortune 500 or the Global 2000 in many cases. They’re pretty demanding customers. And they want to make sure that when their bosses, the CEOs or the board members are in the room, it works seamlessly. The quality is there. There’s no jitter. The intelligence of the camera, it’s not just about the quality of the glass or the sensors, but it’s really the intelligence of the camera to make sure that it can follow you, that it can adjust the lighting, that it can deal with all of the issues that come up in video calls.
And I think that’s what makes it enterprise quality gear. That’s number one. Number two is even in a world where we’re working at home some of the time, or we’re working in the office some of the time, you got to be able to manage that. The CIO, most CIOs that I know are wonderful people, but they like to have a little bit of control over what’s going on with the security, the reliability, the network capabilities of all the gear that they’re deploying to their employees. And so they want to, my CIO can understand the lighting issues that I have here. You can see no more jitter issues that I have through this Poly lens product that we have. And so I think saying, listen, we’re not a toy. We’re not a webcam for consumers. We’re really meant for the enterprise. We’re really meant to kind of bring the best of the boardroom capability wherever you work, whether it’s at home or in the office. I think that’s the mantra and really the mission of Poly. And so far, it’s doing very, very well and the customers are loving it.
Daniel Newman: I want to build on that Dave, because you said something that we are in a impasse, this is a big inflection point. I say, this is October of the pandemic. We are going to come out of it. And there are some mixed feelings. There’s companies that are like everyone back in the office, a lot of legacy, old school banking, finance, oil and gas, not many tech, but a little bit of tech, a few tech companies that fit this mold. There are companies that are like, you can work from home forever, work wherever you want. We realize we’re extremely effective at this. And then there’s everything in between. But work has sort of, I think we can agree largely is outgrowing the office as we know it. We are finding talent. Companies are changing their policies to be able to identify, hire. We’ve realized, like you said, using Teams or Zoom, or whichever platform, and you guys are agnostic to that.
You support all of the platforms. But a lot of work, especially knowledge work can be done remote. And so as this shift continues to happen, what does that mean for Poly? Because you’ve kind of alluded to it, but if 30% of the workforce, 40% of the workforce now is working from home regularly, they’re still doing video meetings. In fact, they’re doing more. Are they going to be adopting ProTech? Are office is going to need more ProTech? Because historically they were the buyers. They were buying the big video systems and everyone else just used whatever was built into their laptop. But I got to imagine you’re seeing that trend change.
Dave Shull: So, we have roughly 60 offices worldwide in 35 different countries. And so we’ve gone through this analysis ourselves and said, okay, of all the employees, how many of them need to be in the office a 100% of the time? And there’s definitely 10 to 15% of the employees need to be in the office a 100% of the time because they’re engineers testing gear and making sure that the quality is high and everything else. And then there’s a portion that needs to be, that can be out of the office virtually a 100% of the time, salespeople. They need to be out talking to the customers. We estimate, as you said, between 30 to 40% of the employees probably need to and want to be in the office three days a week. And so what that means is virtually every meeting, we’ll have a video participant in virtually every meeting we’ll have someone who’s remote.
And so that raises a couple of interesting challenges, not just for us as a company, but for, I think all of the Global 2000 companies out there, which is there’s 50 million conference rooms around the world, roughly. Only 10% of them are enabled for video. And that’s a remarkable stat. There’s 40 million, 45 million conference rooms out there that need to be video enabled. And that’s a massive opportunity. And the ones that are video enabled, a lot of them aren’t really suitable yet for Teams or Zoom. And so we see huge demand over the next couple of years, being able to change those out. That’s number one. Two is, is all that equality in the room. Right now we’re all in the same plane. We’re all looking at this remotely. And so we’re all equal in terms of being able to say, hey, I got a point I want to make in a meeting.
And a lot of our customers are saying, how do I fix the quality between the people who are in the room and the people who aren’t in the room. And so that’s really the vision statement now for Poly is that equality. And to do that, it’s a combination, of course, the gear that you have, and it’s also the AI/ML to make sure everyone’s engaged and we’re watching the sentiment and the participation. But then it’s also software, to encourage people to say, hey, everyone needs to pipe up and make sure that all the voices are heard. And that equality issue is a massive driver. And I think, again, another massive opportunity for Poly going forward.
Daniel Newman: Yeah, absolutely. You touched on a lot of different things. But of course you aren’t the only company out there that makes “pro-grade”. So, this is that moment where I’m going to have to throw, a lot has passed. And I hope you just hit it out of the park because that’s what you got to do. But what makes you different? Okay, more pro equipment. How does Poly win? What makes the company unique? What makes the company different than your competitors?
Dave Shull: So, coming in as new CEO, that’s one of the first questions I asked as well. Because there’s five different strategies that we could have pursued. We could have become a consumer company. We could have pursued some of our competition that tends to copy gear very quickly, and they sell mice and keyboards and other stuff like that. That’s a very viable strategy and it’s a very viable company. We can pursue some of our top end competition that have been around for decades and also sell networking gear and try to really pursue just the enterprise on a hardware basis. Or we can say we’re going to do sort of a complete combination of software and hardware and create a solution on there. And so we looked at all those options. And when I look at the strengths of Poly, it’s really the customer base, 100% of the Fortune 500 are using us.
It’s the fact that there’s actually a massive opportunity with each of those accounts. If I look at the dollars that we have with those accounts, it’s not that big. And yet the reputation that we have with the CIO of those big corporations is phenomenal. And so I think we have a real chance to triple or quadruple our revenue with those accounts if we get closer to them and understand their needs in a better basis. We sell most of this. We certainly have direct relationship with a lot of the Fortune 500s or Global 2000. But we sell most of it in partnership with very, very sophisticated enterprise partners around the world. And finally, we have a services team of 600 people around the world who understand Teams, and Zoom, and high-end video conferencing issues in a very, very complicated, high security, high reliability way. Those are very unique skills that we have as a company [crosstalk] and are really hard for our lower end competition to replicate.
Daniel Newman: Sorry. You excited me there. But first of all, I just want to say of the five strategies. I really, as an analyst, I have to say, I think you’re on the right path. Of course at nine months it’s probably too soon to say you nailed it, but I’m saying you’re nailing it. And it’s a work in progress as they like to call it. I’m very glad that you quickly decided not to go the consumer route. I think that would have been an extremely difficult path for the company. Of course, you’ll get some trickle into that market. Always have, but you’ve kind of identified and you said something, but 500 of the Fortune 500. Big enterprises are using Poly. It just says you would have probably really missed a huge opportunity to have sort of shifted your focus away from just how much they need what you’re doing.
With that in mind, I’d love to kind of think about another part of your strategy that I’ve been bullish on. And I’ve been very public in my sentiment about that and that’s partnering ecosystem. Poly used to be a video platform. Used to use Poly. Poly was the, I still remember the star phones and the ones that went on top of the TVs, view stations. It just slipped my mind, the VSX and the view stations-
Dave Shull: I’m impressed. I’m impressed.
Daniel Newman: Those were in my early days in video. But I still remember those things. And I remember Poly was its own ecosystem, as Zoom rows, as Teams went from 11 million to 150 million or some odd users. As all these different, you got everything from GoToMeeting, you’ve got Eight by Eight. And you guys have really done a great job partnering with everyone. You’ve been in extremely focused on building ecosystem and saying, we don’t care which platform you’re using. We want to be your hardware and management. So, I want to add that software there through Lens. You want to manage that hardware. We want to be your partner, but we’re not trying to eradicate any of those other platforms. That’s been great. Talk about that strategy, how you’re going that route. How do you deepen those partnerships? And one of the things I’ve asked for, Dave, is how do you guys get those partners to become bigger advocates and sell through partners? Or are they, and is that something that’s already happening?
Dave Shull: Immediately prior to Poly, I was at TiVo. And TiVo competed with Roku. Roku is an amazing platform, just an absolutely phenomenal platform. So, I have 15 years of experience in media and media tech and watching what those guys have built is really, truly inspiring. And it’s a very, very simple piece of hardware that has a simple to use operating system that sits on millions of TVs around the world. And you can put any sort of entertainment system that you want in there. That’s the power and that’s the magic of it. And that they’ve been able to monetize that. And so I’m kind of looking at Poly in a very simplistic way, of course, as the Roku for enterprise collaboration and enterprise communications. And I think to do that, we have to stay neutral. Teams, Zoom, absolutely amazing partners, RingCentral. And so we partner very, very closely with those companies at an engineering level, at a sales level, at a marketing level.
And they are far away the biggest drivers of our revenue. But I also know talking to the end customers that they’re going to make a decision. The end customer CIO is going to make a decision on Teams versus Zoom versus Google versus RingCentral or whatever else. Even once the company standardizes on Zoom, hypothetically. They still need to be able to make Teams calls or Google calls. And so I think our ability to enable that in partnership with Zoom in this case is valuable to Zoom. It’s valuable to the end customer. And of course it’s valuable to us. And so I think there’s a real long-term role for us to play there as sort of a neutral platform, as an interconnect service, recognizing that our big partners, Teams and Zoom are where our bread is buttered. And so we want to say very, very close to them. But I think we actually allow them to even pick up more business because we allow them to extend their business on a neutral basis, which is phenomenal.
Daniel Newman: Yeah. I’m an absolute supporter for bringing that pro-grade or pro-sumer grade equipment into the home. As an analyst, I have the benefit that I get a lot of equipment sent to me. I’ve got different cameras, I’ve got different Zoom phone tools. I’ve got dedicated desktop devices. The only reason I say this is because I think sometimes people are like, oh, it’s good enough running it on my PC. Trust me, there’s a whole better experience. And if you’re going to go down that remote work path, this is a pretty small investment from your company to really improve the quality of your day-to-day experience on meetings all day. So, I’m really glad to see companies advocating for that.
There’s been a lot of, everything from the mental impact of being locked in Zoom call or Team’s calls 12 hours a day, better technology makes the experience better.
It’s kind of like sitting in a room with the wrong size TV and having to squint at the monitor, just being able to get on the right piece of equipment can really change the whole experience. I want to wrap up and I want to come full circle. When you were talking about strategy, you mentioned all the five different options. And then I kind of shout at you saying, hey, I’m really glad you didn’t go hardcore consumer. But there is this sort of in-between space. High-end consumer. I use the word pro-sumer. But there are a lot of industries education, for instance. Schools don’t have the money to buy high-end video systems for every student’s desktop. Tele-health is exploding, but these systems aren’t rich everywhere.
We sort of mistaken with healthcare. But they need better technology. They need better quality. If you’re going to be a doctor, seeing a patient, a better video can mean a better outcome. If you’re a student, better video can mean a better learning experience. All of these things matter, even just, your employees, like I said, day to day, those cocktail hours at the end of the day over video. A little better video, a little better sound. By the way that’s a great example of why your technology is so important. We all know what good video and bad sound are. It’s just a bad experience. How do you guys kind of innovate into that space? Is that something you’re looking at? And is that an opportunity, Dave, that you see is big for Poly?
Dave Shull: Yeah. I like your description of them as sort of pro-sumer. I don’t think we want to be a consumer sort of company. But we definitely want to make sure that we’re handling the pro-sumer demand and especially in a work from home environment. It’s not just the law firms buying or the medical systems buying, it’s the doctors and the lawyers buying it. So, they want to make sure that they can buy on Amazon or e-tail. And so the vast majority of our revenue comes in conjunction with these very sophisticated partners that are critical to us.
But we’re also seeing sort of an increase both from ourselves directly, but also our customers to sell on Amazon, walmart.com, et cetera, et cetera. And so I think some of the new products that we’ve launched, I’m not sure I can get this to the camera or not like this Poly Sync, let me get in front of camera here.
Poly Sync 40, but also the Studio P series, the P5 and the P15, which is a great high-end video and audio gear for the home. I think that’s really going to appeal. It’s not meant to be the cheapest solution out there, but it’s meant to be something that, again, the CIO can be very happy for you to have in your home, because it can be managed remotely. They can help you fix the problems remotely. The video quality is there, the reliability is there, the network impact is there. And so I think that’s really where we’re going as a company. Tying that together was sort of the biggest boardrooms as we go back into the office is really the mission for the company.
Daniel Newman: That’s a great point. And by the way, over here on my Scissor, I’ve got this microphone and this thing was several hundred dollars. And in the end though, I’ve got a USB mic that I went and bought for … And it’s just a perfect example though, in the end, like it was easier in the home setup for most of these platforms to use a pro-sumer technology and actually get a pro level experience. And I think you guys are really doing a good job. Dave Shull, CEO of Poly. I want to thank you so much for spending some time here with us here at the Futurum Tech Podcast and have Futurum Tech TV. And I want to wish you a lot of luck and a lot of success in all the endeavors of the company over the next few years. We will be tracking closely and providing regular comments to the market about what’s going on at Poly.
Dave Shull: I really appreciate it. It’s my pleasure. Thank you so much.
Daniel Newman: So, everyone out there that’s tuning in. I want to say, thanks for spending some time with us. Dave Shull, great guest, great vision, great story. Very excited, like I said, to watch what happens to Poly in the next few quarters and over the next few years and seeing what this hybrid work experience looks like in the future. Hit that subscribe button, join us for all of our episode. Hit us up on social if you want to comment or engage with us. We tend to answer pretty quickly in this highly connected world. But for this episode, for this show, Futurum Tech Podcast, time to say goodbye. We’ll see you later. Thank you for joining us on this week’s Futurum Tech Podcast, the Interview Series. Please be sure to subscribe to us on iTunes and stay with us each and every week as we bring more interviews and more shows from our weekly Futurum Tech Podcast.