Increasingly, businesses of all sizes are embracing video as part of their corporate communications framework, and not just in the executive boardroom. Gone are the days of large-scale, proprietary hardware that required its own dedicated line and room—IP and the cloud have made it possible to extend videoconferencing to more types of workers within the enterprise, often bundled with business VoIP and/or unified communications offerings.
As a result, the market for video is in a state of flux, as exec-friendly telepresence begins to decline and cloud-based options drive an otherwise stagnating videoconferencing segment.
The research firm IDC (News - Alert) showed mixed results in the second quarter of 2014, with overall videoconferencing equipment revenue increasing 1.8 percent quarter over quarter to $482 million, but decreasing a full 9 percent year over year. Most interestingly, number of units sold was up however: 7.2 percent quarter over quarter and 5.5 percent year over year.
This suggests an overall move to lower-cost, software-centric products and competitive cloud-based video service options—options which can be easily bundled with a VoIP strategy. In fact, according to another study from Infonetics (News - Alert) Research, a full 88 percent of survey respondents said that they plan to add videoconferencing to their UC architecture by February 2015, underscoring the continued growth of video within enterprise UC deployments.
But Infonetics sees the same spending decline that IDC highlighted. “Demand for video capabilities is at an all-time high, but businesses’ willingness to spend isn’t, causing a shift from high-end telepresence suites and multipurpose room systems to lower-cost software and videophones for personal videoconferencing,” says Matthias Machowinski, directing analyst for enterprise networks and video at Infonetics. “This, along with lower-selling prices due to competition, is hampering a more robust recovery in the videoconferencing market.”
Of course, room-based options still exist, and telepresence continues to get a lot of buzz. These HD, hyper-realistic systems aim to break down the barrier of the screen, and as such often involve wall-sized panel displays that show those on the other end in life-sized proportions—with the aim of making it seem as though they’re in the same room with you. Strategically placed HD speakers help with the effect too, so that the speaker’s voice will seem to come from their video avatar. Also, there’s very little overhead in terms of the “control panel” for initiating and managing the call either—so the idea is to make it as natural as possible to communicate.
That said, telepresence is of course a higher-end installation that tends to be expensive, and it often exists outside of the UC/VoIP infrastructure upon which the rest of the business’ communications may run. And, various telepresence systems aren’t typically interoperable with each other, meaning that there’s no guarantee that a telepresence call will be possible with one’s partners and suppliers, if their own telepresence systems run on a different vendor. Taking all of these factors together, telepresence is increasingly relegated to niche status.
“The downside to placing such an emphasis on distraction-free calling is interoperability. Telepresence (News - Alert) systems that have led the pack—like Cisco and Polycom—have long struggled with letting their own telepresence users play nice with other brands' telepresence users,” explained GetVoIP’s Charles Samuel, in a blog. In contrast, videoconferencing upstarts have begun to take aim at this as mobile dependency and mobile technological advancements have ballooned over the past few years. You may not get a distraction-free environment with videoconferencing services, but you have a better shot at interoperability.”
The effects of these barriers are being seen: In Q2, the IDC report showed that telepresence equipment revenue was up slightly (0.6 percent) quarter over quarter, but down in double digits for the year (losing 17.3 percent). Similarly, immersive telepresence units were up 2.3 percent quarter over quarter, but down 12.9 percent year over year.
IDC noted that more and more, next-gen, IP-based videoconferencing will be leading the market forward.
"The mixed video equipment results are also indicative of the ongoing transition from a primarily hardware-based reporting model to one impacted by the interest in and growth of video subscription services,” said Rich Costello, senior analyst for Enterprise Communications (News - Alert) Infrastructure at IDC. “On the bright side for the video equipment vendors, most or all of these vendors now offer, or are ramping-up to offer, cloud-based video alternatives to customers – in addition to their own lower cost, premises-based systems."
Lifesize, for instance, which built its business on telepresence, now has a cloud-based offering to help diversify its portfolio. More and more options should continue to flood the market, analysts say—which could be a boon for VoIP overall.
“Cloud-based visual collaboration technologies are fundamentally redefining the video conferencing market,” says David Maldow, an analyst at the Human Productivity Lab. “The reliability, ease-of-use and affordability of today’s cutting-edge solutions result in compelling productivity tools for businesses of all sizes to offer their entire workforces.”
Edited by Alisen Downey