News Release

Polycom and Cisco Systems Announce Strategic Agreement for Joint Development of IP Telephony Solutions

Industry Leaders Sign Agreement for Joint Development, Licensing and Sales To Deliver Enhanced IP Telephones to Enterprise Customers
Oct 18, 1999

SAN JOSE, Calif. -- October 18, 1999 -- Polycom., Inc. (NASDAQ: PLCM), the global leader in multimedia communication solutions, and Cisco Systems, Inc. today announced a strategic agreement for joint development, licensing and sales of Internet protocol (IP) telephony solutions. Designed to deliver enhanced IP telephones to enterprise customers, this agreement combines Polycom's leadership in audioconferencing technologies and Cisco's industry-leading expertise in IP networking and IP telephony.

Under the terms of this five-year agreement, Cisco will incorporate Polycom's patented Acoustic Clarity Technology (ACT), the world's leading full-duplex, hands-free audioconferencing technology, into the next generation of Cisco's IP telephony handsets. With the addition of Polycom's ACT, Cisco IP telephony handsets will also include the "Clarity by PolycomT" ingredient brand mark. Polycom's best-in-class ACT audioconferencing technology has made Polycom conference phones the corporate standard in meeting rooms around the world.

As part of the agreement, Polycom and Cisco will collaborate to develop the next-generation of Polycom's award-winning SoundStation. conference phone, which will integrate best-in-class Cisco IP telephony technology. This new SoundStation phone will be jointly marketed and sold by both Polycom and Cisco through direct sales and each company's respective channels. Further, Cisco and Polycom will cooperate in the integration of Cisco's AVVID (Architecture for Voice Video and Integrated Data) Open Telephony interface for incorporation into future Polycom IP telephones and other media rich endpoint products.

"Enterprise adoption of IP telephony is taking off, allowing customers to thrive in Internet-based business models while achieving a lower total cost of ownership for the overall network," said Mario Mazzola, senior vice president of Cisco's Enterprise Line of Business. "In striving to provide the end-user with the best voice over IP experience possible, we are further enhancing the voice quality and ease of use features of our IP telephones by incorporating superior hands-free performance capabilities developed by Polycom. Collaborating with first-in-class companies such as Polycom, we will continue to extend the Cisco AVVID open architecture for voice, video and integrated data."

"Continuing to deliver on our IP strategy, we're pleased to work with Cisco to develop best-in-class voice over IP products and look forward to the market opportunities that this joint development agreement will provide us and, ultimately, our customers," said Bob Hagerty, president and CEO of Polycom. "As the market leaders in media-rich communications, we are always looking for opportunities to extend the benefits of high-quality voice and video communications to even more users."

IP telephony is becoming increasingly important as enterprise customers begin to realize the benefits and recent advances of the technology. The worldwide IP telephony market is projected to grow to 2.7 billion minutes of use by the end of 1999, compared with 310 million minutes of use in 1998, according to a study released last month by International Data Corp. (IDC). IDC further predicts widespread use of IP telephony in the business market by 2001.

About Polycom

Polycom is the only company in the world that develops, manufactures and markets a full range of high-quality audio, data and video conferencing products to enable multimedia collaboration. Polycom's innovative, award-winning products provide customers with high performance and ease of use at an affordable price to create a media-rich experience on any network. For additional information, call 1-800-POLYCOM or 1-408-526-9000 or visit the Polycom web site at

Cisco Systems

Cisco Systems, Inc. (NASDAQ:CSCO) is theworldwide leader in networking for the Internet.

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Cisco, Cisco Systems and the Cisco Systems logo are registered trademarks of Cisco Systems, Inc. in the U.S. and certain other countries. IBM is a trademark of International Business Machines Corporation in the United States and other countries. All other trademarks mentioned in this document are the property of their respective owners.

Polycom, the Polycom logo design and SoundStation are registered trademarks and Acoustic Clarity Technology are trademarks of Polycom, Inc. in the U.S. and various countries. S1999 Polycom, Inc. All rights reserved. All other trademarks are property of their respective owners.