Votacall VoIP & Video in the Cloud

How hot is the videoconferencing market? Anecdotally, it's screaming. Driven by an increasingly mobile workforce, the desire of corporations to trim travel budgets and by the reality of a more far-flung workforce and corporate structure, videoconferencing is quickly becoming the "it" technology.

Tablets, of course, have had a huge impact. The decreasing cost of the technology, too, is playing a major part in pushing it down market, attracting SMBs and home users that would never have considered it just a year ago.

From a numbers standpoint, a new study says videoconferencing revenue in the fourth quarter of 2011 grew nearly 25 percent, pushing global revenue figures for the technology to $807.9 million.

The study, from International Data Corporation (IDC), said the single-codec telepresence market led the boom. Its revenues for the quarter grew a whopping 38.7 percent compared to a year ago, coming in at $444.1 million; it now accounts for 55 percent of the total market.

"There is little doubt about the success videoconferencing and telepresence have had over the past few years, fueled by strong revenue and shipment growth rates and the increasing popularity of video among enterprises," said Petr Jirovsky, senior research analyst at Worldwide Networking Trackers Research. "The enterprise videoconferencing and telepresence market will continue to be one of the fastest growing networking markets for the foreseeable future."

Overall, the year was a good one for videoconferencing, said IDC, with the enterprise videoconferencing market revenue growing 20.5 percent from a year ago to reach $2.7 billion, a significant bump over the previous year's growth of 16.6 percent.

IDC said the steady growth points to accelerated adoption of video in the enterprise, growth that's been spurred by more well-defined video use cases among organizations across a range of vertical market segments.

Strong adoption--and cases for future adoption--exists in healthcare, higher education, financial services, legal, law enforcement, manufacturing and retail, said IDC.

"We also expect growth over the next several years to be bolstered by the impact of video integrated with vendors' unified communications and collaboration portfolios, and increasing video usage among small work groups, desktop users and mobile device users," said Rich Costello, senior analyst, Enterprise Communications Infrastructure, at IDC.

The growth has been a bonanza for companies in the video infrastructure equipment market--MCUs, gateways, video network servers and appliances, for example, saw nearly 19 percent growth in the quarter, compared to a year ago, ringing up revenues of $215.1 million.

IDC said an increasing trend it sees is the gradual adoption of high-end immersive telepresence- typified by systems from Cisco (Nasdaq: CSCO), Polycom (Nasdaq: PLCM) and Radvision (Nasdaq: RVSN)-- by a broader array of enterprise customers. The segment saw a 21.6 percent bump for the year, recording revenue of $314.8 million. Not surprisingly, Cisco remained the segment market leader, and now holds 54.3 percent of the market, up from 51.7 percent in the third quarter of 2011 and 50.2 percent in the fourth quarter of 2010. Cisco saw revenue from the segment grow 35 percent in the quarter and recorded nearly 49 percent growth for the full year.

Polycom, by comparison, saw a 15 percent revenue bump for the quarter and 20.8 percent for the year.

All indications are that 2012 is likely to be an even more profitable year for the videoconferencing segment. More companies are looking to cooperate in resolving interoperability issue, the price of the technology continues to drop, and it's getting easier to use. Just as important to the market? It's beginning to stir customers' curiosity. Potential clients are starting to ask, "Show me how I can use this," instead of "What is it?" And that's a big deal.--Jim.