Wainhouse Summit 2013 report: VC peaks out
Peter Lloyd, March 15, 2013
Video conferencing hardware sales are down, but Wainhouse’s annual collaboration summit looked forward to a world of mobile apps and video streaming. Peter Lloyd was there.
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When Logitech declared, just as ISE started, that it was writing off $211m from its balance sheet to cover “the impairment of goodwill in our video conferencing segment” it didn’t send a healthy signal to the market.
Over the past few years Logitech had spent $440m buying LifeSize, SightSpeed, Paradial, and Mirial, and it admitted that “the majority of the impairment charge relates to the LifeSize acquisition.”
On the show floor LifeSize was busily launching new product, but the Logitech statement reflected what everyone already suspected – that sales of conventional video conferencing endpoints for use in room systems had started to fall back.
For some years the endpoint market had resisted the commoditisation that’s all too familiar in the displays business – prices falling faster than volumes are rising, with a consequent downward trend in both market values and margins.
The launch of HD and telepresence products had kept the VC market relatively immune to price erosion and volumes have been steady.
But although video conferencing room usage is rising there’s no pent-up demand from users wanting to buy new room systems, desktop conferencing systems have never really fulfilled their potential and the market for mobile conferencing, UC and cloud-based conference services is still in its infancy.
Delegates attending the annual European Wainhouse Research Summit, which ran the day before ISE opened, had already been told the bad news, if they hadn’t known it already.
Worldwide sales decline
Wainhouse Research (WR) partner and senior analyst Andrew Davis told delegates that worldwide video conferencing endpoint revenues had peaked at just over $2bn in 2011.
Full 2012 figures were not yet available, but the WR data for the first nine months of 2012 compared with the same period of 2011 showed worldwide end point revenues down to $1.4bn from $1.5bn the previous year and infrastructure sales revenues down slightly to some $450m.
Looking at the graph of EMEA VC endpoint sales, there were sharp falls in the first two quarters of 2011, followed by something of a recovery in Q3, but anecdotal evidence from other market sources suggests that any recovery may not have been sustained.
Davis’ presentation showed EMEA endpoint sales by the ‘big five’ – Avaya, Cisco, LifeSize, Polycom and Sony – down 10 per cent during the comparable periods (the first nine months) of 2012 compared with 2011. Infrastructure sales (mainly bridges-MCUs) by the big five in EMEA were down even further – around 19 per cent.
The European market has been harder hit than other parts of the globe. Leaving the big five out of it, worldwide endpoint sales fell by five per cent in the period against a 12 per cent drop in EMEA, and worldwide infrastructure sales dropped by less than two per cent, against 18 per cent in EMEA.
With the video conferencing focus moving away from installed ‘room’ systems and conventional infrastructure – except as locations to which mobile calls will be routed – it’s hard to see how the current trend is going to be reversed, so the sector really does need the new technologies that are now emerging to take up some of the slack.
Visions of a mobile future
Wainhouse’s Summit, which has now changed its title to UC+C (Unified Communications and Collaboration) started to explore some of the options that surround conventional conferencing rather than focusing on conventional hardware.
In 2012 the big theme had been collaboration. This year the emphases were on a broad spread of technologies and applications – including mobile, collaboration, the use of video in the organisation and unified communications.
The event kicked off with a presentation that started to work out the implications of using web conferencing, mobiles and collaboration in the workplace. WR senior analyst Andy Nilssen explored what he called Team Process 2.0, the use of web conferencing and collaborative tools in a changing world which he described as “evolving from meeting at a distance to working from anywhere”.
The decision-making process he envisages is a circuit that involves three elements – ‘asynchronous collaboration’ using team workspaces and document repositories; ‘synchronous collaboration’ using realtime audio, video and web conferencing; and an ‘initiate communication’ phase that links the two via presence and availability management.
Nilssen believes that adding a camera and audio to data conferencing changes the workflow for teams of workers, engineers and managers, and he pointed to metrics showing that increasing numbers of users are migrating away from data-only conferences, adding webcams to their desktop devices.
Using next-gen mobile devices and apps, he forecast, will shorten ‘team process’ cycle times, making the entire team more productive and enabling the ‘work from anywhere’ revolution so attractive to corporates who want to reduce their real estate bills.
The segmentation of waking hours into work and life time could change, said Nilssen. Instead of large blocks of time being dedicated to one or the other, ‘lifeslicing’ could result in a very different structure in which we use ‘pockets of time’ to do team working.
Whether or not we all want to personally subscribe to the kind of lifeslicing that Nilssen described is another question entirely, but another WR presentation by senior analyst Alan Greenberg, suggested that we are already a long way down this road.
In a presentation entitled @ the Device and @ the App, Greenberg pointed out that mobile devices are already being extensively used for much more than making calls or sending emails, and that mobile users are already embracing the use of collaboration using their mobiles.
An IDG survey into mobile usage carried out in August 2012 found that more than 30 per cent of users were already using their devices to view video content, and a WR survey carried out last year showed that 28 per cent of users are already using their mobiles for web conferencing (up from 15 per cent in 2011) with 21 per cent using them for video conferencing (up from 10 per cent in 2011).
Significant numbers of users (30 per cent for web conferencing and 27 per cent for video conferencing) say they are “very likely” to use the technology.
The results of another WR survey were even more positive, with a 2:1 “yes” versus “no” answer to the question: “Has having access to mobile collaboration changed the way you work?”
Wainhouse’s respondents cited travel, reach and accessibility as the main driver for adoption of BYOD or BYOA (Bring Your Own App) working, with productivity the next on the list.
The implications are only just being figured out. As one enterprise IT respondent to the research put it: “BYO allows more collaboration and sharing, a higher comfort level for users, and if they have their own device or app they are more likely to reach their goals.”
One educational IT respondent said simply: “This takes us out of the hardware business.”
A new life for video
The combination of BYOD/BYOA-friendly IT infrastructures, cloud-based servers and ever-faster Internet access is also slated to re-enable our old friend the corporate video, albeit in a new guise.
Business webcasting is being re-thought, said WR senior analyst Steve Vonder Haar, who said that much current webcasting and streaming is, in essence, so boring that it “has yet to fully deliver on its potential”.
The market for streaming platforms is set to more than double from 2012 to 2016 (from $546m worldwide to $1.1bn) as new platforms enable transcoding so content can be delivered to any device, allow video editing and provide network owners with content management tools.
The new forms of corporate video, said Vonder Haar, are likely to include training and motivational communication with staff at remote locations, on demand access to expert opinion and archives of employee-produced
This is more than just a theoretical vision of the future according to a presentation called Democratising Video across The Enterprise delivered by Eric Vidal and Ryan Osborne of InterCall, whose activities include providing content management and delivery systems for large corporate, such as Accenture.
Where internally-generated video is being enabled, they said, usage is up 15 per cent year on year as staff get used to the idea of ‘Your Corporate Tube’.
Within Accenture, for example, introducing a video platform saw a nine-fold increase in the number of employee-generated videos being created – and today’s tools make it possible to track viewer behaviour, analyse what does (and doesn’t work) and choose the right delivery method for specific audience segments.
Entertainly, they pointed out that engineers like PowerPoint, while marketing people want to see full-motion video.
However, all this will fail without consistent AV elements such as content and relevance. “Rather than watch a 45-minute webcast people want a (relevant) two-minute segment,” said Intercall.