Frost & Sullivan Applauds Pexip for Disrupting the Video Conferencing Industry

2016 Global Video Conferencing
Technology Innovation Award
2016

BEST PRACTICES RESEARCH
© Frost & Sullivan 2016 2 “We Accelerate Growth”
Contents
Industry Challenges..............................................................................................3
Technology Attributes and Future Business Value .....................................................3
Conclusion...........................................................................................................7
Significance of Technology Innovation ..........................................................................8
Understanding Technology Innovation ..........................................................................8
Key Benchmarking Criteria ....................................................................................9
Best Practice Award Analysis for Pexip ..........................................................................9
Decision Support Scorecard ...................................................................................9
Technology Attributes .........................................................................................10
Future Business Value.........................................................................................10
Decision Support Matrix ......................................................................................11
Research Methodology ........................................................................................12
About Frost & Sullivan ..............................................................................................14

Background and Company Performance
Industry Challenges
Video conferencing adoption is undergoing rapid transition. Frost & Sullivan independent
analysis confirms that the market has approached an inflection point driven by high
quality and low-costs - combined with an escalating need for rich collaboration. Utilized in
the past primarily as a high-end application deployed in conference rooms, the benefits of
video conferencing are now available to everyone, resulting in a rapid democratization of
the technology. The ongoing shift from hardware to software and the impact of cloud and
consumerization is not only overturning traditional business models, but is also opening up
exciting new growth opportunities for providers in this market.
Technology advancements, improved cost-benefit ratio, availability of video over mobile
devices, and a greater flexibility in deployment models have all resulted in viral adoption
triggering not just B2B, but also B2C use cases, leading to pervasive video for everyone.
According to a recent Frost & Sullivan research, the global market for business visual (web
and video) collaboration stands at $5.8 billion in 2015 - and is forecast to grow to $9.5
billion by 2020.
The shift to video in huddle rooms, open work spaces, and over desktop and mobile
devices (along with greater cloud momentum) is expected to accelerate within the
forecast period. Video conferencing technologies must meet changing user needs driven by
the Bring-Your-Own-Device (BYOD) trend; yet many current offerings come up short.
Today’s customers are ready for the new world of video collaboration that supports
distributed workforce over their choice of devices and networks. Many customers and
partners in the past have been frustrated with the limitations of dedicated closed solutions
from technology providers. The new deployment model requires scalable and affordable
video conferencing, backed by software-based and virtualized solutions that offer flexible
licensing and deep multi-vendor integration.
With its Infinity collaboration and communications platform, Frost & Sullivan applauds how
Pexip is properly addressing the emerging needs of the market. Using Infinity, organizations
can now offer video, audio, and web-based collaboration to every employee via existing IT
or cloud infrastructures — greatly improving organizational efficiency, while saving costs.
Technology Attributes and Future Business Value
Criterion 1: Visionary Innovation
Since its inception, Pexip has worked at a rapid pace to innovate. The Pexip team is
constantly looking to change the status quo in the industry by bringing technology that
can easily scale in a cost-effective way, which is becoming increasingly important to
organizations having to deal with a rapidly growing mobile workforce.

Pexip Infinity is a software-based transcoding engine, MCU, and gateway in one. This
solution is a scalable meeting platform that connects virtually with any communications
tool, such as Microsoft Lync and Skype for Business, and traditional video- and audio
conferencing together for seamless meetings. Constant innovation is part of the company
DNA. Pexip has made 11 major releases to Infinity in the last 2 years and has 7 patents
granted. As an innovator in scalable, distributed, and affordable collaboration, Pexip
recently added Dynamic Hybrid Cloud, which is a clear industry differentiator. This
capability allows an on-premises installation of Pexip Infinity to burst to an IaaS
(Infrastructure as a Service) cloud when on-premise capacity is about to be exceeded. As
a result, customers no longer need to worry about running out of resources. Infinity’s
dynamic hybrid cloud functionality supports expansion from an on-premise deployment to
a private or public cloud IaaS service whenever a company requires it. When capacity
demand normalizes, the cloud instance can be shut down, keeping costs to a minimum.
The on-premises deployment provides basic capacity for everyday usage, and the cloud-
based extension provides extra capacity for special needs. Typical use cases include, for
example, scheduled all-hands meetings that run once every month or quarter, where day-
to-day platform conferencing capacity does not meet the needs of the organization.
Criterion 2: Customer Acquisition
Pexip’s commercial success is illustrated by its customers, and technology and partner
ecosystem. Since its inception three years ago, Pexip has grown at a rapid pace.
• Pexip surpassed 100,000 licenses in February 2016. Its largest customer now has
more than 83,000 VMRs provisioned. Its largest single deployment has 136 Pexip
conferencing nodes.
• Pexip has 425 direct customers that have purchased on-premises solutions via its
partners. That number does not include customers that have purchased Pexip
through VCaaS providers (such as Whitlock, York Telecom, BCS Global and others).
Pexip more than doubled the number of direct customers in 2015.
• With many more customers being reached through its 30+ CSP partnerships, Pexip
has seen strong revenue growth. In 2015, it more than doubled its accrued
business, with 159% increase in annual returning revenue and 128% in new
bookings. It is on target in 2016 to grow at over 100% over 2015 revenue.
While these adoption and customer acquisition stats are quite impressive, more important
are the usage stats over the Pexip solution. Pexip customers are now using the Pexip
Infinity platform at a rate of 100 million minutes annually, a doubling from just 6 months
ago. Its largest customer today, a US based global leader in business and technology
services, consumes about 5.3 million minutes of video per month on average. Pexip
renews annual licenses with a 20% capacity increase - and sees that trending up. As a

result of strong adoption, Pexip customers are making video collaboration and content
sharing an integral of their workflows.
Criterion 3: Interoperability and Application Diversity
Pexip Infinity can integrate multiple applications and can be embraced in multiple
environments. The overall goal is to enhance workflows, productivity and collaboration by
decreasing the time required for workers to find and connect with appropriate contacts.
Most UC vendors and service providers have focused primarily on their own solutions,
rather than on deep integration with third-party platforms and inter-company support. The
resulting solutions may be characterized as short-sighted and/or complex and expensive
when multi-vendor and inter-company communications is involved. In contrast, Pexip has
demonstrated a futuristic vision and has executed to truly extend the value of investments
for its customers.
In November 2015, Pexip announced Fusion, a technology that enhances user experience
when Microsoft Skype for Business or Lync users meet with standards based
videoconferencing users. Pexip Fusion ensures that every individual participant benefits
from the client experience no matter what their platform of choice is. It consists of
multiple elements that define and control how standards-based videoconferencing, as well
as other video-enabled clients, work when they connect with Microsoft’s AV-MCU –
commonly referred to as Skype meetings – using Pexip Infinity as a gateway or meeting
platform. It offers bi-directional multi-stream video support between Microsoft’s AV-MCU
and Pexip Infinity, ability to merge AV-MCU hosted conferences with Pexip Infinity VMR
and establishment of multi-resolution H.264 simulcast video streams from Pexip Infinity to
the AV-MCU. For enterprises that have invested in both legacy video conferencing and
Skype for Business or Lync, Pexip Fusion means better adoption rates, better return on
investment, and more intuitive usage.
Overall, it’s clear to Frost & Sullivan that Pexip is going above and beyond other video
conferencing developers. The company can address a broad range of devices and user
environments to address the challenge associated with communication silos that exist
today.
Criterion 4: Industry Impact – High Price/Performance Value
Pexip does not ask customers to compromise on functionality for affordability and
flexibility. Pexip’s price performance value can be matched by few in the industry
(including both incumbents and startups).
Pexip offers a disruptive licensing model whereby organizations can increase or decrease
conferencing capacity to their changing needs. The flexible licensing model allows them to
buy what they need and grow when they are ready. Another compelling feature is that
Pexip can work alongside existing infrastructure already in place allowing customers to

keep their existing video investments while growing on Pexip’s affordable and scalable
platform.
Pexip’s licensing, including enterprise level agreements, offers:
· Pay as you go - subscription pricing
· Pay as you grow - minimal initial investment
· Buy what you need - capacity as needed
Pexip is selling user licenses for a list price that starts at $25 per user per month for a 50
user license down to as low as $5 per user per month for enterprise agreements. The cost
of hardware and virtualization is about $5 per port per month. Depending on assumptions
around concurrency in a large enterprise level scenario, the hardware and virtualization
cost per user can be as low as $0.50 per user per month.
Customers can start with a low license count and increase their licensing at any pace (by
month), and don't need to invest in the servers until they need them (delaying the
purchase of some servers by 6-12 months will automatically increase performance and
bring down costs). Overall, Frost & Sullivan firmly believes that the Pexip value is very
compelling. For service providers, it offers revenue share models and pay per usage based
models that allow them to grow at any pace, while staying profitable. As a result, Pexip-
enabled cloud services as well as servers are not only more affordable, they are also more
robust than leading alternatives and can open up the latent demand for ubiquitous video.
Criterion 5: Human Capital
Pexip’s team is made up of passionate developers that have in the past helped build
industry leading products and services. Nearly everyone on its team has worked in the
visual communications industry for a number of years and therefore understands the user
pain points. With innovation in its core culture, the Pexip team is looking to disrupt the
video conferencing market on a single core premise - everyone in an organization should
have access to visual collaboration, just like they have an email address and a telephone
number.
The company has undergone several changes recently. It has presence in 15 countries in
5 continents, and customers in more than 50 countries around the world. It has grown
from 40 employees to 80 in just a matter of few months, with offices in major locations
such as Oslo, London, New York, Beijing, and Sydney. Pexip recently established a
dedicated Customer Success Team with the objective to ensure a high level of client
satisfaction.
Åsmund O. Fodstad, took over as CEO bringing in a strategic vision. In addition, in
January Pexip hired Amy Kim of Google, Inc. to serve as President for its Americas
business. These changes show that Pexip is attracting greater talent in a very competitive

market. Its strong human capital has enabled Pexip to have a strong focus on
engineering, as well as sales. As a result, Pexip is on a strong R&D and sales growth track.
Frost & Sullivan expects that the company's aggressive road map for the rest of 2016 will
lead to further strengthening of its solution and customer acquisition.
Conclusion
The next generation of video conferencing solutions is designed to break down the
challenges of costs, complexity, and interoperability that impede effective collaboration.
Pexip’s solution is founded upon an advanced, flexible, and differentiated platform that
enables organizations to scale quickly, effectively and affordably connecting users to
create agile businesses. Pexip has become a successful disruptor and challenger to the
collaboration incumbents.
Frost & Sullivan is proud to recognize Pexip with the 2016 Global Technology Innovation
Award.

Significance of Technology Innovation
Ultimately, growth in any organization depends upon finding new ways to excite the
market, and upon maintaining a long-term commitment to innovation. At its core,
technology innovation or any other type of innovation can only be sustained with
leadership in three key areas: understanding demand, nurturing the brand, and
differentiating from the competition.
Understanding Technology Innovation
Technology innovation begins with a spark of creativity that is systematically pursued,
developed, and commercialized. This spark can result from a successful partnership, a
productive in-house innovation group, or the mind of a single individual. Regardless of the
source, the success of any new technology is ultimately determined by its innovativeness
and its impact on the business as a whole.

Key Benchmarking Criteria
For the Global Technology Innovation Award, Frost & Sullivan analysts independently
evaluated two key factors—Technology Attributes and Future Business Value—according to
the criteria identified below.
Technology Attributes
Criterion 1: Industry Impact
Criterion 2: Product Impact
Criterion 3: Scalability
Criterion 5: Application Diversity
Future Business Value
Criterion 1: Financial Performance
Criterion 3: Technology Licensing
Criterion 4: Brand Loyalty
Best Practice Award Analysis for Pexip
Decision Support Scorecard
To support its evaluation of best practices across multiple business performance
categories, Frost & Sullivan employs a customized Decision Support Scorecard. This tool
allows our research and consulting teams to objectively analyze performance, according to
the key benchmarking criteria listed in the previous section, and to assign ratings on that
basis. The tool follows a 10-point scale that allows for nuances in performance evaluation;
ratings guidelines are illustrated below.
RATINGS GUIDELINES
The Decision Support Scorecard is organized by Technology Attributes and Future
Business Value (i.e., the overarching categories for all 10 benchmarking criteria; the
definitions for each criteria are provided beneath the scorecard). The research team
confirms the veracity of this weighted scorecard through sensitivity analysis, which
confirms that small changes to the ratings for a specific criterion do not lead to a
significant change in the overall relative rankings of the companies.

The results of this analysis are shown below. To remain unbiased and to protect the
interests of all organizations reviewed, we have chosen to refer to the other key players
as Competitor 2 and Competitor 3.
Measurement of 1–10 (1 = poor; 10 = excellent)
Technology Innovation
Technology
Attributes
Future
Business Value
Average
Rating
Pexip 9.1 9.0 9.1
Competitor 2 8.8 8.6 8.7
Competitor 3 7.8 7.2 7.5
Criterion 1: Industry Impact
Requirement: Technology enables the pursuit of groundbreaking new ideas, contributing
to the betterment of the entire industry
Criterion 2: Product Impact
Requirement: Specific technology helps enhance features and functionality of the entire
product line for the company
Criterion 3: Scalability
Requirement: Technology is scalable, enabling new generations of products over time,
with increasing levels of quality and functionality
Requirement: Specific new technology represents true innovation based on a deep
understanding of future needs and applications
Criterion 5: Application Diversity
Requirement: New technology serves multiple products, multiple applications, and
multiple user environments
Future Business Value
Criterion 1: Financial Performance
Requirement: High potential for strong financial performance in terms of revenues,
operating margins and other relevant financial metrics
Requirement: Specific technology enables acquisition of new customers, even as it
enhances value to current customers

Criterion 3: Technology Licensing
Requirement: New technology displays great potential to be licensed across many sectors
and applications, thereby driving incremental revenue streams
Criterion 4: Brand Loyalty
Requirement: New technology enhances the company’s brand, creating and/or nurturing
brand loyalty
Requirement: Customer impact is enhanced through the leverage of specific technology,
translating into positive impact on employee morale and retention
Decision Support Matrix
Once all companies have been evaluated according to the Decision Support Scorecard,
analysts can then position the candidates on the matrix shown below, enabling them to
visualize which companies are truly breakthrough and which ones are not yet operating at
best-in-class levels.
DECISION SUPPORT MATRIX FOR TECHNOLOGY INNOVATION AWARD
High
Low
Low High
FutureBusinessValue
Pexip
Competitor 2
Competitor 3

The Intersection between 360-Degree Research and Best
Practices Awards
Research Methodology
Frost & Sullivan’s 360-degree research
methodology represents the analytical rigor of
our research process. It offers a 360-degree-
view of industry challenges, trends, and issues
by integrating all 7 of Frost & Sullivan's
research methodologies. Too often, companies
make important growth decisions based on a
narrow understanding of their environment,
leading to errors of both omission and
commission. Successful growth strategies are
founded on a thorough understanding of
market, technical, economic, financial,
customer, best practices, and demographic
analyses. The integration of these research
disciplines into the 360-degree research
methodology provides an evaluation platform
for benchmarking industry players and for
identifying those performing at best-in-class
levels.
360-DEGREE RESEARCH: SEEING ORDER IN
THE CHAOS

Best Practices Recognition: 10 Steps to Researching,
Identifying, and Recognizing Best Practices
Frost & Sullivan Awards follow a 10-step process to evaluate Award candidates and assess
their fit with select best practice criteria. The reputation and integrity of the Awards are
based on close adherence to this process.
STEP OBJECTIVE KEY ACTIVITIES OUTPUT
1
Monitor,
target, and
screen
Identify Award recipient
candidates from around the
globe
• Conduct in-depth industry
research
• Identify emerging sectors
• Scan multiple geographies
Pipeline of candidates who
potentially meet all best-
practice criteria
2
Perform
360-degree
research
Perform comprehensive,
360-degree research on all
candidates in the pipeline
• Interview thought leaders
and industry practitioners
• Assess candidates’ fit with
best-practice criteria
• Rank all candidates
Matrix positioning all
candidates’ performance
relative to one another
3
Invite
thought
leadership in
best
practices
Perform in-depth
examination of all candidates
• Confirm best-practice criteria
• Examine eligibility of all
candidates
• Identify any information gaps
Detailed profiles of all
ranked candidates
4
Initiate
research
director
review
Conduct an unbiased
evaluation of all candidate
profiles
• Brainstorm ranking options
• Invite multiple perspectives
on candidates’ performance
• Update candidate profiles
Final prioritization of all
eligible candidates and
companion best-practice
positioning paper
5
Assemble
panel of
industry
experts
Present findings to an expert
panel of industry thought
leaders
• Share findings
• Strengthen cases for
candidate eligibility
• Prioritize candidates
Refined list of prioritized
Award candidates
6
Conduct
global
industry
review
Build consensus on Award
candidates’ eligibility
• Hold global team meeting to
review all candidates
• Pressure-test fit with criteria
• Confirm inclusion of all
eligible candidates
Final list of eligible Award
candidates, representing
success stories worldwide
7
Perform
quality check
Develop official Award
consideration materials
• Perform final performance
benchmarking activities
• Write nominations
• Perform quality review
High-quality, accurate, and
creative presentation of
nominees’ successes
8
Reconnect
with panel of
industry
experts
Finalize the selection of the
best-practice Award recipient
• Review analysis with panel
• Build consensus
• Select winner
Decision on which company
performs best against all
best-practice criteria
9
Communicate
recognition
Inform Award recipient of
Award recognition
• Present Award to the CEO
• Inspire the organization for
continued success
• Celebrate the recipient’s
performance
Announcement of Award
and plan for how recipient
can use the Award to
enhance the brand
10
Take
strategic
action
Upon licensing, company
may share Award news with
stakeholders and customers
• Coordinate media outreach
• Design a marketing plan
• Assess Award’s role in future
strategic planning
Widespread awareness of
recipient’s Award status
among investors, media
personnel, and employees

About Frost & Sullivan
Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth
and achieve best in class positions in growth, innovation and leadership. The company's
Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined
research and best practice models to drive the generation, evaluation and implementation
of powerful growth strategies. Frost & Sullivan leverages almost 50 years of experience in
partnering with Global 1000 companies, emerging businesses and the investment
community from 31 offices on six continents. To join our Growth Partnership, please visit
http://www.frost.com.

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