Although videoconferencing technology has been around for quite some time, it has always been viewed as complicated and expensive, and because of this it has failed to make serious inroads into the business world. Until recently, videoconferencing systems are most likely to have been found in the corporate boardroom and used primarily to facilitate high level meetings between two groups of executives. A session would usually be conducted via several ISDN lines and would require a skilled operator to set up and manage. Quite often the session would be managed by a third party videoconferencing service provider and this required that the meeting adhered strictly to a pre-arranged time slot. Clunky, expensive and difficult to justify, it is not hard to see why the technology never found its way into mainstream use.
But things are changing, major technical advances and falling costs have injected new vigour into the market and prompted analysts to proclaim that videoconferencing is an idea whose time has finally come. According to a recent report by videoconferencing specialists, Wainhouse Research (www.wainhouse.com) the market for ‘group videoconferencing endpoints’ (i.e. the devices used for meeting room based conferences) will grow from $530 million in 2003 to over $600 million in 2004 and exceed the $1 billion mark in 2008. As things currently stand the leading player by a considerable margin is Polycom which holds 51 per cent of the total market. Its closest competitor is Tandberg with 21 per cent, followed by Sony (5 percent) and VTEL (2 per cent).
According to Wainhouse Research the single biggest factor behind this market transformation is the migration towards IP (Internet Protocol) as the communications medium of choice in place of older ISDN based systems. Most current videoconferencing hardware supports both ISDN and IP, allowing buyers to embrace the benefits of the newer technology whilst maintaining compatability with legacy systems. This migration equates to more than a simple shift in technology, it is changing the way businesses use and manage their videoconferencing systems.
Chief technologist at Tandberg said “IP technologies are now becoming viable for video, some research reports that next year (2005) there will be more video over IP for business than using ISDN. So we are seeing that the costs are dropping quite dramatically and that certainly drives the usage and increased usage also leads to better adoption of video. We also have a few good customer cases where they see that the return on investment is positive for visual communication. So increased availability of networks for video over IP is certainly a driver for this.”
Current videoconferencing endpoints can be separated into three categories. Larger meeting room systems such as Polycom’s iPower 9000 series or Tandberg’s 8000 MXP are usually used for point to point conferences between two groups of people – the traditional mainstay market of the videoconferencing market. Mid range units designed for between two and four people per endpoint are ideal for smaller team meetings, this devices may be permanently located in a smaller office or could be implemented as roll-about devices that can be easily placed wherever they are needed. Polycom’s V500 set-top unit and Tandberg’s 770 MXP fit into this category.
At the low end we have desktop or personal conferencing systems, designed to work with a desktop PC and providing workers the ability to join conferences from their desks these devices combine features of videophones, teleconferencing systems and instant messaging software. It is here, in the desktop segment of the market that the most interesting development is happening and where much of the current wave of market interest is focused. Conventional point to point meeting room based videoconferences certainly serve a purpose but businesses are learning that multi-point desktop based conferences, where numerous individuals spread over multiple locations participate in conference, can reap significant gains in productivity.
The director of marketing for EMEA at Polycom said “There is definitely a need for scheduled pre-booked meetings, like the regular Monday morning sales meeting where you need to get a set of defined participants together on a regular basis. But there are those meetings that happen in the kitchen or over the water-cooler where you want to get a quick response so an example would be that I would use this for getting my team together quickly at short notice and being able to do that from my office as opposed to from a meeting room. It becomes much more ad hoc, much more spontaneous and it is a natural way of conducting communications.”
The business videoconferencing market has taken some cues from the explosive popularity of instant messaging in the consumer Internet space. PAM (Presence and Availability Management) is a new industry buzz-word, which simply translates into the system knowing whether or not you are at your desk, and whether you are currently available to participate in a session. Simple it may be, but the integration of this technology with desktop based videoconferencing systems offers the potential to move inter-office communications firmly into the 21st century.
The focus is moving away from high end pre-planned conferences between two large meeting rooms and shifting towards quick and easy collaboration between geographically disparate workers. This may take place in a more organised fashion by using mid-range videoconferencing equipment designed for small groups of two to four people per endpoint but is increasingly more likely to be happen from the desktop with little or no pre-planning, in much the same way as a conventional telephone conversation. A key driver here is the convergence between corporate telephone systems and their IP networks – telephony has become an IT issue and voice over IP is gaining widespread acceptance amongst businesses. From there it is a relatively small to incorporate desktop based videoconferencing into the comms infrastructure.
Tandberg’s spokesman said “The fact that people are getting used to visual communications is very positive in our opinion and they will use it in more types of meetings.What we’re seeing is that our customers are using it to meet more often, both within their companies and with other companies, partners, contractors and so forth. Certainly one has always talked about removing the need for travel, but I’m not sure that is the key point here. I think certainly it can remove the need for travel sometimes but more importantly you can meet somebody face to face more often and have a higher quality meeting more often. We see that decisions can be made more quickly, you can meet your project teams more often and that leads to greater efficiency.”