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Videoconferencing Has Arrived
Posted Jun 1, 2002 Print Version     Page 1of 1
  

June 2002|Thanks to some smart business moves and some smart new products from Polycom and others, video conferencing is finally on the cusp of becoming the corporate world's "killer application" for business communications. That's the conclusion that high-tech market research firm In-Stat/MDR has reached in a recent report entitled, "Video Conferencing Systems—Polycom To Raise The Industry Tide."

In the report, In-Stat/MDR predicts that the worldwide market for set-top box and room video conferencing systems will grow from approximately $772 million in 2001 to more than $2.2 billion in 2006.

"We see Polycom emerging as the key industry driver," says Gerry Kaufhold, a principal analyst with In-Stat/MDR. The company's rapid growth, through well-planned and intelligent acquisitions, has created an entity that covers all the bases of the video conferencing game, from endpoint equipment to network infrastructure, to partnerships, to global user groups, and to powerful distribution channel partners. According to Kaufhold, "The final link in the chain that will drive video conferencing over the top is Polycom Office, which provides an integrated, fully connected solution that makes video conferencing not only very easy to manage and use, but creates momentum to connect video conferencing, through Internet Protocol networks, to a host of streaming media applications."

But Polycom isn't the only company contributing to the new-found success and status of video conferencing. The In-Stat report also cites Forgent's VNP and VCON's MMX software products/services as making a significant contribution to the industry's recent growth. "This new breed of software permits a video conferencing service provider to put up a Web portal," Kaufhold explains. "End-users then pick where they want to connect to and the conference is automatically set up."

Indeed, it is the ease-of-use that products/services like these offer that has given the video conferencing industry its latest big boost, according to Kaufhold. "In the last six months, several new software tools have been introduced that have dramatically improved ease-of-use," he says. "It is the reason we've seen tremendous growth."

Kaufhold admits that increased demand for video conferencing services and products in the wake of the September 11 terrorist attacks has been a contributing factor in recent market growth, but he doesn't believe it is the main factor. "The upward trend was already in play and 9/11 just gave it a push," he says. The upward trend was evident back in August, says Kaufhold. That's when In-Stat/MDR released a report entitled "Slow Economy Driving Streaming Onto Corporate Networks." Says Kaufhold, regarding this report: "We concluded in August that as companies have cut their travel budgets and reduced their head counts through layoffs, they have actually increased the use of video conferencing and video streaming as a way of making the few employees who are left more efficient and as a way of keeping them in closer contact with their customers."

Kaufhold also believes that while Polycom will lead the charge, it will by no means monopolize the market. He sees the Forgent and VCON solutions having a bit of an edge over the Polycom solution because they are less proprietary and "more generic." A Polycom solution requires that you use Polycom equipment from end to end, while Forgent and VCON allow you to mix and match. "With Forgent and VCON you can connect anything to anything," says Kaufhold. "You're not tied to a specific endpoint." Kaufhold also predicts that TANDBERG, a company noted for its high-end systems, will begin to address lower-end markets. "I believe some of TANDBERG's high-end features will filter down to lower-priced products that will compete head to head with Polycom products," says Kaufhold. This will force Polycom to "move up" by adding more advanced features in its low-end products. This healthy competition will result in good news for the consumer, says Kaufhold.

In the report, In-Stat/MDR has also reached the following conclusions:

  • Tandberg will take control of their high-end segment of the market, extensively expanding into IP-based and wireless applications. Sony's Video Conferencing Group will continue to be a major player, providing the widest overall variety of high-quality video conferencing components and solutions, and Forgent's Video Network Platform will engage all the other players in the market, to make everything work together.
  • Attitudes towards the use of, and participation in, video conferencing activities are changing to a more positive tone. In a survey included in the report, 75% of respondents said "Yes" to the question, "Do you think your company should make more use of video conferencing in the future?"
  • North America represents, by far, the largest individual market for video conferencing equipment, and will experience explosive growth during the coming two years. Europe, Asia and the Rest-of-the-World (ROW) countries each present significant market growth opportunities as well.

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