Unify Blog

Recently, a LinkedIn contact shared this IDC forecast for the videoconferencing industry, predicting growth deceleration due to economic slowdown across the globe, especially in the European market. Strange isn’t it, because in the last round of recession, analysts were talking about how videoconferencing industry gained as companies cut down travel costs? Are people not using as much video? On the contrary, video calling/conferencing usage is increasing sharply, though equipment sales data show otherwise.

Greater Choice, Lower Costs

So, what has changed now? The IDC report vaguely mentions, “Some new service offerings are starting to come to the market around video… Customers are saying we have got some options here that we need to consider, which is building into a longer sales cycle around video.”

There are definitely other options now for the user. And, these are not from the Big Two that control the videoconferencing equipment market. Enterprises just aren’t that interested in buying equipment worth tens of thousands of dollars that only 2% of their employees would eventually use.

Disruptive Forces

In fact, the market is getting increasingly polarized between two types of players – incumbents that have invested deeply in proprietary videoconferencing technology; and newer, disruptive vendors such as Siemens Enterprise Communications’ offering cost-effective software-based desktop video conferencing, and over-the-top services such as Google, Skype, ooVoo and Qik. Some of these OTT services, though offering best-effort QoS, are free or cost very little.

In July, Google announced the integration of Google Hangouts with voice and video with Gmail. Gmail users need to download a plugin (takes about 30 seconds to install) that allows you to do video chats with up to 9 people. The video quality, though not telepresence grade, is great and jitter-free. Now, I know this is still a consumer application and Google has yet to figure out a way to integrate this with Google Apps. However, we are already seeing an extension of the enterprise consumerization phenomenon to applications in Facebook and Twitter. Video might well follow suit.

Skype held a lot of promise before Microsoft acquired the company. I was invited to participate in the Skype video demo just before it launched the service. We had a three-way conference with two of us dialing over the public Internet, and I barely detected a couple of lags in the 60-minute session. Skype was planning to charge about 7 Euros a month for it at that time. Microsoft will be integrating Skype with Lync, but we will wait and see how cost-competitive and how better (or otherwise) the service is.

If the video market decelerates as projected, it may not be because of the economy but because users are making smarter choices.

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2 comments on “What’s Wrong with the Video Market?
  1. Marc Herman says:

    Great observation here Subha. There is always a story worthwhile following behind the market numbers.

  2. Subha Rama says:

    Thank you Marc!