11/28/11 – Research: Video-conferencing to see CAGR of 19% through 2015


Research: Video-conferencing to see CAGR of 19% through 2015

November 28, 2011

Here’s more research that says the videoconferencing market is booming. Frost and Sullivan reports the market grew nearly 20 percent in 2010 and raked in $225.6 million in revenue. It forecasts the market will keep up that pace and see a compound annual growth rate of 19 percent between 2010 and 2015, with revenues expected in the range of $538.2 million.

Interoperability issues and high costs continue to hamper its growth, said Frost & Sullivan’s Melanie Turek in the soon-to-be-release report.

The complexity of delivering quality video is pushing large enterprises to opt for videoconferencing via a managed service offering–a trend that will help drive that segment to a CAGR of 20 percent and revenues of $374.1 million by 2015, up from $150.5 million in 2010. Telepresence will see its share of that segment grow to 44.3 percent in 2015 from 9.5 percent in 2010, the study said.

Medium-sized businesses will trend toward outsourcing videoconferencing system operations to service providers, focusing on their core competencies instead. A prime service provider customer will be SMBs looking to avoid the expensive buy-in to videoconferencing systems, helping hosted services grow to $164.1 million by 2015, a CAGR of 16.9 percent.

Containing expenses continues to be a driver for adoption of video conferencing, the study shows, citing Polycom (Nasdaq: PLCM) research that showed enterprises can save 30 percent on travel costs, lower time-to-market by 24 percent, reduce training costs by 25 percent, trim recruitment times by 19 percent and shrink sales-related costs by 24 percent by adopting videoconferencing.

The Frost & Sullivan report said Cisco (Nasdaq: CSCO) saw T&E savings of 14 to 20 percent for its European Services unit by embracing collaboration via videoconferencing and telepresence.

The report also says businesses have to cope with fewer transportation delays, less administrative time spent planning trips and a reduction in lost productivity during travel.