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Growth Opportunities and Challenges in the Web Collaboration Market

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A power point presentation issued by Frost & Sullivan overviewing the Web Collaboration Market. This presentation details the key drivers for growth in the industry, as well as the evolving business …

A power point presentation issued by Frost & Sullivan overviewing the Web Collaboration Market. This presentation details the key drivers for growth in the industry, as well as the evolving business case for web collaboration, trends in the market, and trends in the Remote Support market.

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  • 1. Growth Opportunities and Challenges in the Web Collaboration Market August 27, 2009 Roopam Jain Krithi Rao Principal Analyst - Unified Industry Analyst – Unified Communications Communications
  • 2. Focus Points Market Segmentation – How Do We Cover Web Collaboration? Market Overview- Continued Growth Momentum Key Drivers for Growth The Evolving Business Case for Web Collaboration Trends in Web Conferencing Markets Webinar/Web Events - Key Trends and Growth Remote Support Market – Key Trends and Growth Q&A 2
  • 3. Web Conferencing & Collaboration - Market Segmentation Web Collaboration Web Web Conferencing Webcasting Conferencing Services Clientless On-Premise Remote Support Software SaaS vendors’ Solutions Sales (direct to users and through Resellers) Web Meetings Webinars Reseller Sales Source: Frost & Sullivan 3
  • 4. Web Collaboration - Continued Growth Momentum Despite Recession Web Collaboration Growth Stats 2008 Global web conferencing SaaS revenues grew by 17% reaching $989.4 million in 2008. The cost savings message is resonating well in a tough economy. Revenues for Web Events (webinar and webcasting solutions) reached $173.2 million in 2008. Webinars represent ~10% of web conferencing revenues. Web conferencing on-premise software has seen slower uptake and reached $214.6 million in 2008, growing by 10.4% over the previous year. Unified Communications will accelerate adoption of on-premise web conferencing over the next several years. Global web-based remote support market (an adjacent market since several web conferencing vendors also offer attended remote support) reached $176.9 million in revenues in 2008, growing by 27.4% over 2007. Total Web Collaboration Industry * A $1.5 billion market in 2008 forecast to reach $ 4.5 Billion by 2014 - 6 Year CAGR is 19.6% *Includes the global hosted web conferencing services, on-premise web conferencing software, web events, and remote support markets. This study covers the web conferencing hosted services market. Frost & Sullivan offers in depth analysis of each of these markets. 4
  • 5. Key Factors Impacting Growth in Web Conferencing and Collaboration Globalization Green Imperatives Travel Cost Savings and ROI Web Collaboration Consumer Video Impact of Market Factors (Skype, Google) Recession Web 2.0 Migration to Evolution and UC Impact of Greater Gen-Yers Awareness/ Ease of Use Source: Frost & Sullivan 5
  • 6. Web Conferencing Evolution of the Business Case While a lot of the focus in 2009 is on cost savings, business cases, and ROIs, the long term approach to using web conferencing will be strategic, i.e. business process-centric collaboration resulting in process improvements and better business practices. Strategic Competitive Advantage Integration with Business Processes Productivity Improvements UC, Collaboration, Presence Reduced Cost of Ownership Tactical Reduced Travel Costs 2007 2012+ Source: Frost & Sullivan 6
  • 7. Growing Awareness for Web Conferencing A recent Frost & Sullivan end user survey of C-level execs indicates that awareness for web conferencing is high. While we suspect that the respondents may have mixed their consumer and enterprise video and web communications awareness, it is an overall positive indication for the web collaboration industry. Awareness of Communications and Collaboration Tools (N=102) Video Conferencing 92% Instant Messaging 88% Web Conferencing 84% Audio Conferencing 82% VoIP 82% Unified Messaging 53% Presence Information 48% Telepresence 34% Unified Communications 31% 0% 20% 40% 60% 80% 100% Note: Multiple mention question. Source: Frost & Sullivan 7
  • 8. Web Conferencing as a Critical Communication Tool – Importance Still Being Established The same survey showed a lower rating for the importance of web conferencing in the enterprise, indicating that the business case for web conferencing as a standard communication tool is still being established. Importance of Communications and Collaboration Tools (N=102) Very Important Somewhat Important Neither Somewhat Unimportant Not-at-all Important VoIP 68% 16% 10% 5% Audio Conferencing 65% 28% 6% Instant Messaging 51% 38% 11% Presence Information 49% 24% 16% 7% Web Conferencing 49% 36% 12% Video Conferencing 45% 36% 13% 6% Unified Messaging 37% 37% 26% Unified Communications 33% 41% 26% Telepresence 30% 43% 20% 5% 0% 20% 40% 60% 80% 100% Source: Frost & Sullivan 8
  • 9. Hosted Web Conferencing Services - Regional Growth EU 17.8% in 2008 vs. 18.6% in 2007 NA APAC 77.8% in 2008 4.4% in 2008 vs. vs. 77.4% in 2007 4.0% in 2007 Revenue Growth NA - 18.6%; EU – 12.8%; APAC – 29.6% NA - strong momentum despite a recessionary economy EU - moderate growth, impact of currency fluctuations APAC - growth primarily coming from regional vendors 9
  • 10. SaaS and On-Premise Markets New business models emerge - traditional software vendors redefine themselves and put a stake in the “cloud” Recessionary economy triggers SaaS uptake while On-Premise adoption has been slower than expected (SaaS revenues 82% vs 18% On-Premise in 2008) Vendors moving from an “either/or” approach to “software plus service” approach World Web Conferencing Market: Revenues by SaaS vs. On Premise Software, 2008 SaaS 82% On Premise 18% 10
  • 11. Key Web Conferencing Trends • Ease of use and simpler pricing model promote unlimited usage/named user model • Changing competitive landscape - Collaboration bundles are evolving in the SaaS marketplace; UC vendors beef up built-in conferencing • VoIP integration and usage has accelerated due to cost efficiencies; pricing pressures will intensify pressure on revenue growth • Decision shifting to IT - Key stakeholders included in decision making • Increasing SMB focus; service delivery and pricing are key • Light weight vendors gain traction - getting rid of “needless complexity” and cutting out on bells and whistles for target markets • Strong Application Focus – Sales/Marketing, Training, and Support remain key apps 11
  • 12. Web Events Market 12
  • 13. Web Events – Webinars/Webcasting Trends Global revenues reached $173.2 million in 2008. Although 2009 will be a year of moderate growth, we project revenues to reach $400 million by 2014 Organizations will tighten their belts in 2009, and will begin to spend smartly in Q409/Q110 Web events is gaining traction, albeit not as quickly as the vendors would like The technologies needed to support a web event (i.e higher bandwidth, superior video quality) have enabled web event services vendors to evolve their solutions into a legitimate marketing tool Lead gen/non-essential corporate training down in Q109, impacting growth Product confusion – market should be defined by business behavior, business requirements, customer expectations Consolidation will occur as this is very much a fragmented market Pricing will come down as competitive pressures from larger web conferencing vendors increase A fast emerging market for virtual events N619-64 13
  • 14. Web Events Market – Understanding the Differences The market has not done a good job of educating enterprises on the differences and value add that web events offer, which remains a key challenge for adoption of web events. While smaller collaborative web meetings and larger web events have several features that are similar in nature, the end goal is different. Many similarities, but different expectations for outcome Webcasting Web Conferencing • Planned event with a set start/end • Ad hoc or scheduling time done on short notice • Streamed live audio/video • Interactive; open • Set agenda/advanced registration dialogue • Presenter to many • No/ limited company • Customized branding branding • Highly scalable • Limited scalability • More moderated, controlled • Limited reporting/ post environment event functionality • Extensive reporting/post event functionality • Pricing models still evolving Common traits include: collaborative solution; linear and non-linear; audio/Video/desktop sharing capabilities; licensing models N619-64 14
  • 15. Web-based Clientless Remote Support Market 15
  • 16. Market Size Web-based Clientless Remote Support Software Market: Total Market Size (World), 2007-2008 $176.9 Million $138.8 Million 4 % 27. Note: All figures are rounded; 2007 2008 Source: Frost & Sullivan Businesses are being compelled to “do more with less” and improve service and support internally for employees and externally for customers. 16
  • 17. Revenue Forecasts Web-based Clientless Remote Support Software Market: Revenue Forecasts (World), 2007–2014 Increasing number of telecommuters, remote Revenue Growth (%) workers and mobile workers Revenues ($ Million) $176.9 million Pricing pressures due to increased competition. Larger web conferencing vendors bundle remote support licenses with other web collaboration licenses 2007 2008 2009 2010 2011 2012 2013 2014 causing price pressures. Revenues ($ Million) Revenue Growth (%) Note: All figures are rounded; Source: Frost & Sullivan With the economy forcing businesses to do more with less combined with the shortage of skilled IT workers at each location, Frost & Sullivan expects the remote support market to experience high growth. 17
  • 18. Major Findings Web-based Clientless Remote Support Software Market: Revenue Forecasts (World), 2007–2014 Primary features – Customization (to allow businesses to overlay their own brand on the product, when $176.9 $366 providing support to customers); Million Million Integration with other enterprise systems like CRM or helpdesk ticketing software; Mobile support, secure “anywhere” support that allows Dedicated technical support professional to Remote Support Total Market Size administer support from any PC Market or mobile device (Dedicated remote support products + use of web conferencing tools for Mac support both on the user end remote support) and the tech support rep end Note: All figures are rounded; Source: Frost & Sullivan As the market need for specialized remote support capabilities increases, we see customers moving to purpose built remote support products 18
  • 19. Key Market Share Holders - Web Collaboration Web Conferencing Web Events Remote Support 19
  • 20. Conclusions Travel cost savings and productivity benefits will continue to be key drivers Web conferencing and collaboration represent high growth markets Ease of use and pricing will be key growth factors SaaS will remain the dominant delivery mode Shifting business models for key vendors will result in a fast changing competitive landscape 20
  • 21. Next Steps Request a proposal for a Growth Partnership Service to support you and your team to accelerate the growth of your company. (myfrost@frost.com) 1-877-GoFrost (1-877-463-7678) Join us at our annual Growth, Innovation, and Leadership 2009: A Frost & Sullivan Global Congress on Corporate Growth, September 13-16 2009, Hyatt Scottsdale Resort & Spa at Gainey Ranch, Scottsdale, AZ (www.gil-global.com) Register for the next Chairman’s Series on Growth: The CEO's Growth Team™: The CEO’s Growth Survey and its Economic Outlook for 2010 (September 3, 2009) (http://www.frost.com/growth) Register for Frost & Sullivan’s Growth Opportunity Newsletter and keep abreast of innovative growth opportunities (www.frost.com/news) 21
  • 22. Your Feedback is Important to Us What would you like to see from Frost & Sullivan? Growth Forecasts? Competitive Structure? Emerging Trends? Strategic Recommendations? Other? Please inform us by taking our survey. 22
  • 23. For Additional Information Jake Wengroff Craig Hays Global Director Sales Manager Corporate Communications Information & Communication 210.247.3806 Technologies jake.wengroff@frost.com (210) 247-2460 chays@frost.com Follow Frost & Sullivan on Twitter http://twitter.com/Frost_Sullivan Elka Popova Global Program Director, Unified Communications (416) 792-0160 epopova@frost.com 23