Video Conferencing vendors
Video collaboration is still popular, but users are migrating to software-based solutions and lower-cost systems, according to IDC analysts.The continued shift of video conferencing to software and smaller and lower-cost systems is continuing to take its toll on a video communications equipment market that is in decline, according to IDC analysts. The analysts found that in the second quarter, worldwide revenues for video conferencing equipment fell 10.7 percent over the same period in 2012, coming in at more than $532 million. That number is 34.3 percent below the record set in the fourth quarter of 2011, IDC said in a report released Aug. 28. Video conferencing itself it still growing in popularity, according to Petr Jirovsky, senior research analyst, Worldwide Networking Trackers Research at IDC. What's happening is that how business people are using the technology is changing. "Despite the overall weak 2Q13 results in the worldwide enterprise videoconferencing equipment market, we are still seeing interest in videoconferencing being driven by integrations with vendors' unified communications and collaboration portfolios, and the proliferation of video among desktop and mobile users, " Jirovsky said in a statement. "Video as a key component of collaboration continues to place high on the list of priorities for many organizations." The trend is forcing established video conferencing vendors like Cisco Systems and Polycom—which initially built their video collaboration businesses on the back of hardware systems—to pivot quickly to software and cloud-based offerings. At the same time, it's given rise to a growing number of smaller companies, such as Vidyo and Blue Jeans Network, that offer software-only video conferencing solutions that are made for a more highly mobile workforce that wants to be able to collaborate on whatever device they are using. Unified communications (UC) vendors also are expanding their offerings to include video, either through in-house development or through acquisitions or partnerships, such as Avaya's purchase last year of Radvision or the alliance announced in June between Mitel and Vidyo. Global revenues for the multi-codec, immersive telepresence systems continued to decline, falling 32 percent from the second quarter last year, according to IDC. Video infrastructure equipment, including hardware-based multipoint control units (MCUs), dropped 20.4 percent, while room-based video systems saw revenues decrease 5 percent. Revenues for desktop video systems increased 7.7 percent. "The macroeconomic situation, including the recession in Europe and sequestration (i.e. budget cuts) in the U.S., produced a cautionary IT spending environment that carried over into the first half of 2013 with the spending outlook for the second half of the year not much more promising, " Rich Costello, senior analyst for enterprise communications infrastructure at IDC, said in a statement. "In addition, and most significantly, we are definitely starting to see the impact of lower-cost video systems and more software-based products and offerings on the enterprise video equipment market." However, demand for video collaboration technologies is continuing to grow. In a report released earlier this month, Cisco officials found that young executives—34 or younger—who came into the marketplace less than a decade ago see video communications technology as a key part of business. According to Cisco's Global Young Executives' Video Attitude Survey, three out of five young executives will rely on business-class video over the next five to 10 years, and 87 percent believe video positively impacts companies, from saving money on travel costs to improving the experience of telecommuters to attracting high-level talent. In addition, 87 percent say they'd choose to work for an organization that invests in high-quality video collaboration technology over one that hasn't. "Today's leaders are often tech enthusiasts, " Rowan Trollope, senior vice president and general manager of Cisco's Collaboration Technology Group, said in a statement when the report was released. "Tomorrow's leaders are increasingly tech-dependent, and video is no exception to the rule. The next generation of leaders is realizing that using video makes them more productive, helps companies reduce costs and even plays a role in attracting the best talent available. They understand why video can be better than being there." Cisco continues to lead the video conferencing equipment market, with 41 percent share, despite a 7.5 percent decline in revenues over the past year. Polycom's revenue fell 14.8 percent over the same period in 2012, and the company has a 29.2 percent share of the market. Huawei Technologies holds 7.6 percent of the market, according to IDC.
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