Videoconferencing: Unified we stand

Until recently assessing both the strength and value of the videoconferencing sector used to be more straightforward. The robustness of the market has been judged by vcon end-point sales, by units and price; with both unit values and volumes rising for the past few years, the picture has been fairly rosy.

Values are up because vcon units are becoming more highly-specified to cope with HD and telepresence, while volumes are up because organisations see the environmental, cost and productivity benefits that come with increased conferencing use.

Wainhouse Research, whose annual figures are the sector’s gospel, says worldwide sales of video endpoints and infrastructure products (such as videoconferencing bridges) rose from $1.66bn in 2007 to $2.1bn in 2008. That figure is expected to hit $2.7bn this year and continue growing at a CAGR of over 20 per cent through 2013, by which time the market will be worth $5.3bn.

But the sector is changing rapidly and commentators such as Wainhouse are positioning videoconferencing and audioconferencing as part of a much larger ‘unified communications’ market. The repositioning is ongoing, with Wainhouse’s annual European summit changing its name to collaborative communications in 2008 and this April’s Berlin event to the Wainhouse Research Collaboration Futures Summit.

The wider market

The name change is down to the idea that videoconferencing – typically a group of people in one room talking to a group of people in another, remote, meeting room – is becoming just part of a wider collaboration market that includes good old telephony (the PBX market), instant messaging (IM), web conferencing, virtual workspaces and audio bridges. The overall unified communications (UC) market, says Wainhouse, was worth $15bn worldwide in 2007 and will be worth $16bn by 2013. But the biggest single constituent of today’s market, PBX systems, will fall in value by 30 per cent over the same period, with the big gains coming in areas such as IM (200 per cent up), web conferencing (172 per cent up), virtual workspaces (194 per cent up) and video endpoints/infrastructure (323 per cent up).

There are also going to be different players in the ‘new’ UC market, as Wainhouse Research’s Unified Communications Product Forecast pointed out: ‘Whereas the collaboration and conferencing market has heretofore been a small market dominated by a handful of players, the entrance of software vendors like Microsoft, Adobe, Oracle and IBM; telephony vendors including Avaya, Cisco, Nortel, Siemens and Alcatel-Lucent; carriers including Verizon Business, AT&T, BT and Orange; and mobile-device manufacturers like RIM, Nokia and Apple, suggests that unified communications is emerging as a focal point for the future revenues of some of the largest corporations in the world.’

However, that does not mean the days of specialist videoconferencing (and telepresence) equipment providers such as Polycom, Tandberg, Aethra, Lifesize and Sony are necessarily numbered.

Wainhouse Research managing partner Andrew Davis told the Berlin summit that ‘unified communications will provide the infrastructure that makes videoconferencing easy to deploy, easy to support and easy to use. It will finally drive video to the desktop. Today, you have to go to the conference room to use a video system. In the future you will do it from your desk using a bridge.’

‘It’s likely,’ he added, ‘that much video usage will follow the pattern already seen in audioconferencing. A few years ago, people used to troop into a specially equipped room to take part in an audioconference call. Now, they dial into an audioconferencing link from their desk or mobiles.

In theory, that should drive a big increase in sales for ‘personal’ videoconferencing systems, an area that most manufacturers have targeted without much past success. But Davis is the first to admit that all the predictions being made could come spectactularly unstuck.

Predict the unpredictable

In his summit keynote Davis made the point that two kinds of change are likely to affect the market. On the one hand, continuous small improvements enhance existing markets. On the other hand, unexpected step changes can take place that can create totally new markets.

Videoconferencing technology has mostly been located in the IT-like continuous change line. To prove his point, Davis managed to include in his presentation a clipping from The Financial Times which stated that ‘the videoconferencing market believes its time has come and it is ready to go to the mass market’. The only problem was that back then, in 1995, personal videoconferencing involved installing a mass of new boards and software in a PC, rather than just enabling the camera built into a laptop.

Globalisation, Davis argued, is already a driver of collaborative communications, with ‘stateless multinationals’ setting up dual headquarters globally and dispersing their teams. That could mean the use of videoconferencing extending from departmental communications to cross-functional meetings and, eventually, inter-company meetings. And ‘discontinuities’ could lead ‘to people not wanting to travel, becoming big users of audio/video and web-conferencing services.’

Generational change

The way in which user managers will want to work in future is also one of the great unknowns.

‘Most of us are used to working in isolation’, said Davis, ‘but we will see more emphasis being put on teamwork and collaborating in teams. People who have grown up with the internet, Skype, instant messaging and social networks will expect the tools they have in the home to be available at work.’

And although it is hard for today’s managers to understand, future teams may work better in a virtual environment. In support of that, Davis cited IBM’s use of virtual technology – IBM Sametime with Fortec – which allows participants to attend virtual meetings in a ‘room’ with monitors, displays and interactive boards.

‘Some of the users,’ he said, ‘believe that meetings in virtual space are more productive than those taking place in a real space.’ That may be taking things too far, as Davis did when he jokingly told the summit that his favoured avatar would be an 18-year-old Swedish blonde ‘and I may have another one for business’, but the unified message is clear – a better IT and comms infrastructure and a generation of users who are happy with using video tools can only be good for the videoconferencing business.

SMART MOBILES

Technologies such as telepresence are improving decision-making and cutting costs but mobile conferencing, which is in its infancy, could have as great an impact.

Expanding on MCS (mobile collaboration solutions) at the Wainhouse summit, Compunetix VP Jerry Pompa told delegates that wireless (mobile phone) revenues in the US last year hit $100bn, of which just one per cent was collaboration data. By 2011, he argues, mobile revenues would hit $180bn, of which $60bn would be data and collaborative usage.

Smart phones, he argued, would change both business and social mobile conferencing. Apple’s iPhone has four available applications (iotum, Ifbyphone, BeamYour Screen and Hey Otto).

But others are making plans. Nokia is integrating Skype and video into its new phones; Cisco has a WebEx client for the iPhone, RIM and Windows Mobile; and Microsoft has set up a smart phone partnership with LG.