'Perfect Storm' Drives Demand for Video, Web Conferencing Services: Report

January 27, 2010



'Perfect Storm' Drives Demand for Video, Web Conferencing Services: Report


By Amy Tierney, TMCnet Web Editor



Once regarded as a costly and often “privileged” tool for businesses, the visual collaboration market has made headway to become a larger part of organizations’ unified communications mix.


And thanks to technological advances, the recent economic downturn and greater environmental concerns, these elements have formed a “perfect storm” to push demand for visual collaboration – including video and Web conferencing - to the forefront, according to a recent report from Frost & Sullivan (News - Alert).


A new report from Frost & Sullivan, called “World Visual Collaboration Managed Services Markets, found that the market earned $82.7 million in 2008. And by 2015, it is projected to grow to $938.3 million, increasing at a compound annual growth rate of 162.4 percent.


"A driver that is most likely [going] to contribute to the growth of the visual collaboration market is the reduction of travel required by a company," Frost & Sullivan Research Analyst Iwona Petruczynik said. "This can create significant cuts in business costs and help improve productivity levels; employees can conduct their businesses without the need to meet face-to-face with their clients or partners. New models offered by service providers that do not require up-front capital expenditure by customers are also adding to the widespread adoption of visual collaboration services globally."


Beyond travel, employees are also concerned about their businesses’ environmental impact. With an eye on “going green,” more companies are embracing eco-friendly solutions that don’t require a large investment.


What else is driving the adoption of visual collaboration? Dispersed workers. Those employees who are spread across different locations need to stay in touch with each other and their clients. For example, the recent swine flu pandemic proved that using online collaboration tools helped keep businesses functioning, Frost & Sullivan said.


Greg Plum (News - Alert), director of business development for The Conference Group, a provider of audio, video and Web conferencing services, said Frost & Sullivan is on target with its research. The notion that video and Web conferencing tools are only going to grow is something The Conference Group (News - Alert) has been steadily emphasizing to its customers.


“This certainly adds validity to online collaboration of all genres,” Plum told TMCnet.


“With the decreasing cost of bandwidth and the ubiquity of endpoints, which are simply Internet browsers and webcams for many desktop videoconferencing services, the masses can now enjoy true video conferencing with no capital expense and nominal ongoing costs,” he said. “Many services are offered as a flat-rate for unlimited use, enabling the enterprise to easily control expenses.”


Previously, visual collaboration was considered high-end and too costly to deploy. Many businesses often held the misconception that such services were difficult to use and were only reserved for upper-level executives.


While there is growing interest in visual collaboration managed services, some business leaders in less developed countries still prefer to hold in-person meetings to conduct business, Frost & Sullivan said. The visual collaboration market will experience some pricing pressure over the next few years in more mature markets, but predominantly in emerging markets, Frost & Sullivan said. What’s more, increasing automation will result in decreased demand for managed services. But to the drop, vendors must expand their offers and include new or upgraded features.


"Rising interest in high-definition and immersive visual collaboration is leading to increased competition among value-added resellers and equipment vendors, fueling pricing pressure which, in turn, will contribute to falling prices," Petruczynik said. "Service providers will need to improve their product portfolios to create a one-stop-shop for managed services."

And officials from the Conference Group said their product, the ReadyShow Video service, give customers what they need with a simple solution.


The company’s ReadyShow Video service offers customers the ability to conduct a multi-point video conference right from their desktops or laptops with a browser and a webcam. For as little as $100 per month, customers can receive unlimited video conferencing and use the embedded VoIP feature for the audio portion of the conference, Plum said.


Amy Tierney is a Web editor for TMCnet, covering business communications Her areas of focus include conferencing, SIP, Fax over IP, unified communications and telepresence. Amy also writes about education and healthcare technology, overseeing production of e-Newsletters on those topics as well as communications solutions and UC. To read more of Amy's articles, please visit her columnist page.




Edited by Amy Tierney