What Does Lifesize’s Bankruptcy Mean for the Industry?

Industry Experts spoke to UC Today about Lifesize entering Chapter 11 bankruptcy, its acquisition by Enghouse, and what the news might portend for the next few years

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What Next for Lifesize After its Bankruptcy
CollaborationNews Analysis

Published: June 5, 2023

Kieran Devlin

Perhaps one of the most surprising and disheartening news stories of 2023 was Lifesize filing for voluntary Chapter 11 bankruptcy.

To prevent short-term disruption for its customers, Lifesize finalised $5 million in financing from its existing lender to ensure liquidity during bankruptcy. It has also filed “First Day” motions with its bankruptcy. This additional financing enabled Lifesize to pay its employees and continue its day-to-day operations.

As a consequence of the bankruptcy, a deal was made with Enghouse Systems, who is now lined up to acquire a host of Lifesize’s assets and brands, including Lifesize, Kaptivo, ProScheduler, Serenova, and Telstrat.

Industry experts UC Today spoke to last week identified a strategic trend that Enghouse maintains with its acquisition of Lifesize.

“I think it’s interesting that Enghouse has become this collection point for legacy video vendors that have had really innovative technology,” commented Irwin Lazar, President at Metrigy. “They acquired the assets of Vidyo a number of years ago. They’ve used that to build into their contact centre portfolio for things like telehealth and customer engagement by using Vidyo.”

Lazar highlighted that Lifesize’s longevity as one of the early video conferencing vendors became a double-edged sword — that while being one of the early innovators, the industry boom facilitated by COVID-19 passed them by.

“They kind of missed the revolution that we saw around the pandemic,” Lazar added. “They lost out to Zoom, which had a much easier-to-obtain, easier-to-use, more software-centric view of applications. Lifesize, which was more traditionally focused on hardware and high-quality experiences. Lifesize was the first on the market with a 4K video solution a few years ago.”

“I mentioned to one of my colleagues that Lifesize had been acquired, and their first response was, ‘I didn’t know that they were still around.'”

Dominic Black, Head of Research at Cavell Group, suggested to UC Today that Lifesize’s bankruptcy could be portentous for the next few years: “It’s maybe not a comment on Lifesize, but in general, I think we’re probably at the start of a number of businesses similar to Lifesize going through this process.”

“The comms space, in general, is, to some extent, oversaturated,” Black expanded. “There’s a number of them who won’t be surviving this over the next few years. We’re seeing continued acquisitions and consolidation, especially in the MSP and channel space in North America and Europe.”

Black also said that this is now playing up into the vendor space. “In the end, there are few viable options out there, and there are going to be a few interesting assets coming up on the market over the next few years that interesting companies will acquire and get some very good assets and capabilities through it,” Black concluded.

From an Enghouse perspective, Lazar is curious about how the business integrates Lifesize’s assets, especially its contact centre.

“Lifesize bought Serenova a number of years ago, so now they are bringing the Serenova customer base over,” Lazar said. “(Enghouse) will also bring what’s left of the Lifesize customer base over. I don’t think this is going to be a massive growth engine for Enghouse. The question that we’ll also talk about with Avaya (which has itself recently emerged from Chapter 11) is what do they do now, where do they go, and can they harmonise their portfolio?”

“We haven’t seen Enghouse as aggressive in the contact centre space over the last few years as companies like Five9 and TalkDesk. Hopefully, they can take these assets, integrate them and be able to deliver a set of products and features that can help them more effectively compete in the contact centre and video space.”

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