This has been a rollercoaster year for videoconferencing vendors. On the one hand, sales for traditional hardware systems declined in 2012. On the other hand, sales for software solutions and cloud-based services were on the upswing. In November, research firm IDC reported a shift in enterprise videoconferencing spending. Companies are choosing smaller group systems and mobile videoconferencing applications over complex room-based systems, swayed in no small part by the rise of BYOD, or “bring your own device,” among users.
Research firm Frost & Sullivan’s data points to the same conclusion. According to the 2012 Analysis of the Global Videoconferencing Infrastructure Market report, “software-based infrastructure components and cloud-based services are expanding the addressable market.” Frost & Sullivan expects sales of these lower-cost options to sustain market revenue growth in the mid to long term.
The videoconferencing market is roiling with change, from the way video is delivered, to the way people use it and to the vendors they choose to provide it. Considering this state of flux, how should you approach investing in a videoconferencing solution?
“Videoconferencing solutions vary in their features and functionality. It is critical to carefully evaluate the capabilities so there is a right fit between the end user’s organization’s needs and the solution,” says Roopam Jain, Frost & Sullivan’s industry director of Unified Communications and Collaboration.
The one thing that hasn’t changed is where you should start. First, understand your company’s use case for videoconferencing. Frost & Sullivan’s report notes that “travel avoidance remains a strong value proposition.” Companies are using videoconferencing to conduct face-to-face meetings with far-flung colleagues, both to slash travel costs and to make remote employees feel part of the action at headquarters. Others use it to broadcast executive meetings or stream training sessions to employees. Perhaps you want to use videoconferencing to collaborate more naturally with partners, to communicate more openly with customers or to conduct more personal job interviews.
Even just a couple of years ago, your choices were limited to a handful of vendors, all offering expensive, complex solutions that had to be installed at your site. But now, you can match your use case against the features of hardware- or software-based solutions, on-premise installations or contracted services. Newcomers to the market, like Vidyo and Blue Jeans Network, are challenging the market-leading hardware vanguards, like Cisco, Polycom, and LifeSize, for customers. In fact, Frost & Sullivan’s 2012 report states that the percentage of the global videoconferencing market share held by the top three companies is decreasing; they are “increasingly challenged by upstarts and market consolidation.” Nevertheless, Cisco and Polycom still have most of the market.
For some companies, choosing between hardware and software is easy. For large companies with many videoconferencing users, an installed, hardware solution is often more cost effective and delivers a more reliable user experience. Smaller companies with less in-house networking expertise — and smaller budgets — are gravitating towards software-based solutions.
“As the software-based solutions evolve, we expect to see greater adoption of videoconferencing at lower price points,” says Jain.
But, she adds, there’s a third choice, which could better meet your enterprise’s use case