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  • 1. Rich Media Conferencing 2004 Audio, Video, and Web Conferencing Infrastructure Products 1
  • 2. Rich Media Conferencing – 2004 Volume 1, Audio, Video, and Web Conferencing Infrastructure Products April 2004 This Copy Has Been Licensed to Only Your Organization The following acts are strictly prohibited: Transmittal to another organization outside your immediate organization (i.e. partners, resellers, etc.) in any media format Posting on a web site which is accessible to others outside your immediate organization Reproduction for sale This publication is protected by United States copyright laws and international treaties. Unauthorized distribution or reproduction of this publication, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent necessary to protect the rights of the publisher. Publication No. RE-RMC04-V1
  • 3. About the Authors Andrew W. Davis is Managing Partner at the Wainhouse Research, LLC, a Brookline, MA-based firm providing market research, business planning, and marketing services. He has more than ten years experience as a successful technology consultant and industry analyst. Prior to independent consulting, Andrew held senior marketing positions with several large and small high technology companies. He has published over 200 articles and columns on multimedia communications, image and signal processing, videoconferencing, and corporate strategies in multiple trade journals. He has created and taught monthly two-day seminars on multimedia communications, videoconferencing, and streaming media technologies. Mr. Davis holds B.S. and M.S. degrees in engineering from Cornell University and a Masters of Business Administration from Harvard University. He can be reached at andrewwd@wainhouse.com. Marc F. Beattie is a Senior Analyst and Partner at Wainhouse Research, LLC where he heads the CSP practice. He has authored public and private reports on product strategies, distribution structures, emerging technologies and industry applications. Marc is the principle author of CSP SpotCheck, and co-authors Wainhouse Research’s three volume Rich Media Conferencing series annually. He is a featured speaker and moderator at industry conferences and private company events - specializing on the future impact of current technology developments. Marc regularly consults with end users, established vendors, emerging companies, and the financial community. He is a member of Gerson Lehrman Group's The Councils of Advisors and Vista Research's Society of Industry Leaders through which he advises worldwide financial clients on technology companies and trends. Prior to joining Wainhouse Research Marc was an early member of PictureTel and Polycom - holding positions in product management, business development and sales management - and spent 13 years working within the industry. He has been an independent analyst and consultant since 1998. He can be reached at mbeattie@wainhouse.com. Andrew H. Nilssen is a Senior Analyst and Partner at Wainhouse Research, LLC. Andy has over 20 years of experience in bringing high-technology products to market. At Wainhouse Research, he co- authors many of the firm’s market research reports and has lead seminars on streaming media technologies & applications and real-time conferencing over IP networks. He is also a consultant to rich media conferencing vendors, network infrastructure vendors, end users, government agencies, and venture capitalists. Prior to Wainhouse Research, Andy was Director of Marketing at PictureTel where he identified strategies and partners to expand business, and was responsible for all market research including end-user, competitive, and market sizing. Earlier, Andy managed the planning and launching of PictureTel's Venue and Concorde group systems and authored the original business plan for SwiftSite. Andy was also Vice President of Marketing at Visual Technology, a maker of IP-based network terminals, and a Product Line Manager at Sun Microsystems. Andy earned his MBA and BSEE degrees from the University of New Hampshire and holds two ease-of- use related patents. He can be reached at andyn@wainhouse.com COPYRIGHT NOTICE Copyright 2004 by Wainhouse Research, LLC. All rights, including that of translation into other languages are specifically reserved. No part of this publication may be reproduced in any form, stored in a retrieval system, or transmitted by any method or means, electrical, mechanical, photographic, or otherwise, without the express written permission of Wainhouse Research, 112 Sumner Road, Brookline, MA 02445 (Tel 617-975-0297) www.wainhouse.com. NOTE: The material presented in this report is based on both primary and secondary market data coupled with our professional interpretation of the facts. We believe that the basic information and recommendations presented in this study provide a basis for sound business decisions, but no warranty as to completeness or accuracy is implied. All market estimates and forecasts are those of the authors, except as noted. We welcome your comments on this report.
  • 4. Rich Media Conferencing 2004 A comprehensive series of market research reports designed to help you keep abreast of the rapidly changing technologies, offerings, and vendors in the audio, web, and video conferencing and collaboration markets. The rich media conferencing and collaboration The Rich Media Conferencing series consists market is undergoing important changes. Audio of three separate reports of interest to vendors and video conferences are being deployed over and end users alike: IP networks, though network QoS, bandwidth, and infrastructure bottlenecks remain a concern. Volume 1: Multimedia Networking Web conferencing and Instant Messaging, Infra-structure Products - Market and combined with the enormous power of Presence technology overview of audio, video, and and Availability Management, have come out of web conferencing servers, MCUs, nowhere to gain massive popularity and support gateways, and gatekeepers complete from important enterprise software vendors who with summaries of major vendors and are looking to morph many collaboration their product lines, and a detailed 5-year functions into features of higher level forecast. applications rather than see them exist as stand- alone desktop applications. Videoconferencing Volume 2: Conferencing Clients - Video and Web conferencing clients systems are evolving with new standards market and technology overview, promising higher quality video, security, and complete with summaries of major data conferencing capabilities. Demand for vendors and their product lines, and a video- and collaboration-centric hosting services detailed 5-year forecast. is building as enterprises of all types look for ways to improve communications and reduce Volume 3: The Services Industry - travel expenses. Audio, Video, Web & Streaming conference services market and Wainhouse Research’s Rich Media technology overview, complete with Conferencing series will help you track the summaries of major conferencing service market, understand your competition, re-vamp providers (CSPs) and their service your marketing messages and distribution offerings, and a detailed 5-year forecast. strategies, and maximize your return on investment. Our goal is to broaden your The RMC report series is available by full series understanding of the technology and market subscription or individual reports; in either trends and to provide an independent insight hardcopy or electronically via Adobe Acrobat into the future. pdf. Segment Focus Reports Wainhouse Research Segment Focus reports are published on an ad-hoc basis. They are intended to provide in-depth coverage of markets, technologies, or product categories of special interest to the rich media conferencing community. Some reports include five-year forecasts. See www.wainhouse.com for a listing of available reports.
  • 5. Thinkofit 3144 10th Ave. South Minneapolis, MN 55407 Phone: 612-824-2001 Fax: 612-573-6667 Web: www.thinkofit.com Rich Media Conferencing 2004 Order Form Please fax or mail to Thinkofit (address & fax number above) or order by phone at 612-824-2001. RMC 2004 Option I: Full Series Subscription • 1 printed copy of each volume: Vol 1, Vol 2, & Vol 3 • Electronic copy of each volume with limited organizational use license (Acrobat .pdf file) Invoice $11,995 USD + shipping on receipt of first report; ($9,995 for repeat subscribers) RMC 2004 Option II: Individual Reports - please indicate number of individual report copies desired: ___ paper copies or electronic option Vol 1: Multimedia Network Infrastructure Products ___ paper copies or electronic option Vol 2: Videoconferencing Client Endpoints ___ paper copies or electronic option Vol 3: Audio, Video, and Web Conferencing Services Prices: $3,495 USD first paper copy of each report, additional paper copies $400 USD Electronic option: $4,995 USD one paper copy of report plus electronic copy with limited organizational use license (Adobe Acrobat .pdf file); Shipping & handling charges are additional. Payment Options: Company Purchase Order: PO # _______________________________________________ Credit Card Order: Visa MasterCard American Express Credit Card # ___________________________________ Expiration Date: ____/_____ Name on Card: _________________________________________________________ Marketing Contact Billing Address (If different) Contact Name Contact Name Company Company Address Line 1 Address Line 1 Address Line 2 Address Line 2 City, State, Zip or Postal Code City, State, Zip or Postal Code Contact Phone Number Email Contact Phone Number Email
  • 6. Rich Media Conferencing 2004 Volume 1: Audio, Video, and Web Conferencing Infrastructure Products Table of Contents CHAPTER 1 - EXECUTIVE SUMMARY............................................................................... 9 OVERVIEW ........................................................................................................................... 9 METHODOLOGY.................................................................................................................. 10 MAJOR TRENDS ................................................................................................................. 11 FORECAST SUMMARY ......................................................................................................... 12 SUPPLIERS COVERED IN THIS REPORT ................................................................................ 14 CHAPTER 2 - THE YEAR (2003) IN REVIEW ................................................................... 15 THE TOP FIVE .................................................................................................................... 15 THE CONFERENCING INDUSTRY IN GENERAL ....................................................................... 16 MERGERS, ACQUISITIONS, EXITS, AND OTHER BUSINESS DEALS .......................................... 17 PURE TECHNOLOGY DEVELOPMENTS .................................................................................. 17 AUDIO, VIDEO, AND WEB CONFERENCING INFRASTRUCTURE PRODUCTS .............................. 18 ENDPOINTS FOR GROUP AND PERSONAL VIDEOCONFERENCING ........................................... 19 AUDIO, VIDEO, AND WEB CONFERENCING SERVICES ........................................................... 19 CHAPTER 3 - TECHNOLOGY & STANDARDS OVERVIEW ........................................... 21 NETWORKS ........................................................................................................................ 22 AUDIO CONFERENCING BRIDGES ........................................................................................ 22 WEB CONFERENCING ......................................................................................................... 24 VIDEOCONFERENCING MCUS ............................................................................................. 26 GATEWAYS ........................................................................................................................ 27 GATEKEEPERS ................................................................................................................... 28 IM AND PRESENCE SERVERS .............................................................................................. 29 MEDIA SERVERS ................................................................................................................ 30 STANDARDS ....................................................................................................................... 34 CHAPTER 4 - REVIEW OF SUPPLIERS ........................................................................... 37 AREL COMMUNICATIONS AND SOFTWARE ............................................................................ 37 AVAYA ............................................................................................................................... 40 BANTU, INC........................................................................................................................ 43 CENTRA SOFTWARE ........................................................................................................... 45 CISCO SYSTEMS ................................................................................................................ 48 COMPUNETIX INC. .............................................................................................................. 53 CONVEDIA ......................................................................................................................... 56 DATA CONNECTION LTD. .................................................................................................... 58 DST SOFTWARE TECHNOLOGY........................................................................................... 60 EDIAL ................................................................................................................................ 62 FORUM .............................................................................................................................. 64 FIRST VIRTUAL COMMUNICATIONS ...................................................................................... 66 HUAWEI TECHNOLOGIES COMPANY, LTD ............................................................................ 68 IBM LOTUS SOFTWARE ...................................................................................................... 71 INDIGO SOFTWARE ............................................................................................................. 74 IP UNITY............................................................................................................................ 76 JABBER, INC. ..................................................................................................................... 78 MACROMEDIA, INC. ............................................................................................................ 80 MICROSOFT ....................................................................................................................... 83 ORACLE CORPORATION ...................................................................................................... 87 PACTOLUS ......................................................................................................................... 89 POLYCOM .......................................................................................................................... 91 © 2004 Wainhouse Research, LLC Page 5
  • 7. Rich Media Conferencing 2004 Volume 1: Audio, Video, and Web Conferencing Infrastructure Products PRESCOM .......................................................................................................................... 95 RADVISION ..................................................................................................................... 97 SNOWSHORE ................................................................................................................... 101 SONEXIS, INC................................................................................................................... 103 SPECTEL ......................................................................................................................... 105 TANDBERG ................................................................................................................... 108 UBIQUITY ......................................................................................................................... 113 V2 TECHNOLOGY ............................................................................................................. 115 VCON............................................................................................................................. 117 VIEWTRAN TECHNOLOGY, LTD .......................................................................................... 120 VISIONNEX TECHNOLOGIES, LTD. ..................................................................................... 122 WEBDIALOGS, INC. .......................................................................................................... 124 WIREDRED SOFTWARE CORPORATION ............................................................................. 126 ZTE CORPORATION ......................................................................................................... 128 ZOOM MULTIMEDIA, LTD. ................................................................................................ 130 OTHER VENDORS ............................................................................................................. 132 CHAPTER 5 - INDUSTRY FORECAST ........................................................................... 133 MARKET OVERVIEW ......................................................................................................... 133 DEFINITIONS .................................................................................................................... 133 GENERAL FORECAST ASSUMPTIONS ................................................................................. 134 INFRASTRUCTURE-SPECIFIC ASSUMPTIONS ....................................................................... 135 METHODOLOGY................................................................................................................ 138 AUDIO BRIDGES (MCU).................................................................................................... 139 VIDEO MCUS – STAND-ALONE SYSTEMS .......................................................................... 143 PSTN TO IP VIDEO GATEWAYS ........................................................................................ 147 IP VIDEO GATEKEEPERS .................................................................................................. 148 WEB CONFERENCING SERVERS ........................................................................................ 150 IM & PRESENCE SERVERS ............................................................................................... 153 INFRASTRUCTURE FORECAST SUMMARY ........................................................................... 155 APPENDIX 1 - SURVEY: CONFERENCING INFRASTRUCTURE PLANS AND IP EXPECTATIONS............................................................................................................... 159 APPENDIX B – PRODUCT MATRICES........................................................................... 169 AUDIO BRIDGES ............................................................................................................... 170 STANDALONE VIDEO MCUS .............................................................................................. 176 WEB CONFERENCING SERVERS ........................................................................................ 184 IP MEDIA APPLICATION SERVER ....................................................................................... 198 GATEWAYS ...................................................................................................................... 201 GATEKEEPERS ................................................................................................................. 204 PRESENCE AND INSTANT MESSAGING SERVERS ................................................................ 207 Page 6 © 2004 Wainhouse Research, LLC
  • 8. Rich Media Conferencing 2004 Volume 1: Audio, Video, and Web Conferencing Infrastructure Products List of Figures Figure 1 Conferencing infrastructure components .............................................................. 10 Figure 2 Overall conferencing industry forecast.................................................................. 12 Figure 3 Changing shape of the conferencing infrastructure market .................................. 13 Figure 4 Conferencing Infrastructure Components ............................................................. 22 Figure 5 - Web conferencing architecture ........................................................................... 25 Figure 6: H.323 MCUs can be configured in LAN or WAN locations ................................. 27 Figure 7: Functions of a Gateway ...................................................................................... 28 Figure 8: IP Media Server Configuration with Conferencing............................................... 31 Figure 9: Components of an IP Media Server Platform ..................................................... 32 Figure 10 IP Media / TDM Hybrid Deployment .................................................................. 33 Table 11 ITU-T Multimedia Conferencing Umbrella Standards; * Mandatory.................... 35 Figure 12 Rich Media Conferencing Market Segments .................................................... 133 Figure 13 Forecast transition from ISDN to IP for group video calls................................. 135 Figure 14 Summary table of audio bridge forecast ........................................................... 139 Figure 15 - Audio bridge revenues by customer type ....................................................... 139 Figure 16 - IP and PSTN audio bridge port shipments vs ASPs....................................... 140 Figure 17 - Summary table of ASP and market size by port type ..................................... 141 Figure 18 - Port shipment market segment growth rates .................................................. 142 Figure 19 Audio bridge market size by network type ........................................................ 142 Figure 20 Stand-alone video MCU revenues by market segment .................................... 143 Figure 21 Summary table of stand-alone video MCU forecast ......................................... 144 Figure 22 Stand-alone MCU ports by network .................................................................. 144 Figure 23 Stand-alone MCU ports by network .................................................................. 145 Figure 24 Stand-alone MCU port ASPs by network.......................................................... 146 Figure 25 Stand-alone video MCU revenues by network ................................................. 146 Figure 26 Summary table of gateway forecast.................................................................. 147 Figure 27 PSTN to IP Video Gateway forecast................................................................. 147 Figure 28 Summary table of gatekeeper forecast ............................................................. 148 Figure 29 IP Gatekeeper revenue forecast ....................................................................... 149 Figure 30 Summary table of web conferencing server forecast........................................ 150 Figure 31 Web conferencing server forecast .................................................................... 150 Figure 32 Web conferencing server ASPs ........................................................................ 151 Figure 33 Summary table of IM & presence server forecast............................................. 153 Figure 34 Web conferencing server forecast .................................................................... 153 Figure 35 IM & presence server ASPs.............................................................................. 154 Figure 36 Summary table of infrastructure forecast .......................................................... 155 Figure 37 Overall infrastructure forecast-six segments..................................................... 155 Figure 38 Summary table of audio and video-centric infrastructure forecast ................... 156 Figure 39 Audio, Video, and Web-centric infrastructure forecast ..................................... 156 Figure 40 RMC infrastructure market share estimates for 2003 ....................................... 157 Figure 41 Company size .................................................................................................. 159 Figure 42 Company type ................................................................................................... 160 Figure 43 Respondent location ........................................................................................ 160 Figure 44 Applications in use today ................................................................................. 161 Figure 45 Plans for conferencing infrastructure in 12 months ......................................... 161 Figure 46 Time Series Data: applications in use today................................................... 162 Figure 47 Time Series Data: expected applications in use 12 months from now ........... 163 Figure 48 Year 2004 results minus year 2002 results ..................................................... 164 Figure 49 IP-based conferencing application intentions .................................................. 165 Figure 50 Time series data – conferencing intentions ..................................................... 166 Figure 51 Time series data – video over IP ...................................................................... 166 © 2004 Wainhouse Research, LLC Page 7
  • 9. Rich Media Conferencing 2004 Volume 1: Audio, Video, and Web Conferencing Infrastructure Products Figure 52 Results from 2004 Survey................................................................................. 166 Figure 53 Results from 2002 Survey – video over IP....................................................... 167 Figure 54 Results from 2001 Survey – video over IP....................................................... 167 Page 8 © 2004 Wainhouse Research, LLC
  • 10. Rich Media Conferencing 2004 Volume 1: Audio, Video, and Web Conferencing Infrastructure Products Chapter 1 - Executive Summary Overview This report examines the dramatic changes that are affecting the rich media conferencing industry with a specific focus on the conferencing infrastructure market – audio, video, and web conferencing servers and bridges, video gateways and gatekeepers and IM & presence servers – the products that connect, service, and control users with conferencing needs. Included in this report is an analysis of the current state of the market, a review of the underlying technologies, background and analysis of over 35 vendors, current market sizing and a 5-year forecast by product segment, results of an online survey from over 600 respondents, and comprehensive product matrices for each supplier across all product types. The rich media conferencing infrastructure market has experienced a tumultuous year. While the market was still burdened by the telecom meltdown, general economic malaise, and a lingering IT spending hangover, the first signs of market recovery have begun to emerge. Forced with the need to raise productivity, users recognized rich media conferencing as a viable alternative. Audio conferencing minutes and web conferencing seats grew to record levels. Instant messaging became an accepted tool (if not officially sanctioned) within many enterprises. Shipments of videoconferencing endpoints rose. All of which signaled a rise in consumption was finally underway as measured in port or seat shipments – though the upturn in terms of revenue dollars could have been stronger. The rich media conferencing infrastructure market continues to evolve. While the past was concerned with holding audio and video conferences over the PSTN with higher quality and reliability, today’s situation is far more complex as the industry is being swept by three fundamental changes: 1. As indicated by the number of IP ports shipped by the conferencing infrastructure vendors in this report, the movement to a single, converged, IP-based voice- video-data network is well underway. While the market was initially drawn to a converged network on the promise to deliver higher quality and better reliability with attractive economics, the prospect of using one network to seamlessly integrate rich media conferencing into an enterprise’s IT environment may emerge to be the real “killer app” of IP. The ability to initiate an instant rich-media conference from within the very application that raises an issue or signals a need – whether it be while reviewing a document, email, status report, or from within a customer relationship management system, etc – could deliver the next wave of productivity gains for an organization. 2. Web conferencing, instant messaging (IM), and presence have taken conferencing-savvy organizations by storm. In addition to being IP-driven conferencing tools, these three applications naturally play well together on a converged network - IM is coupled with presence to show the availability status of each potential attendee in real-time before a conference is initiated. While conferencing has quickly transitioned from a scheduled to an ad-hoc paradigm over the past few years, IM & presence holds the potential of taking ad-hoc conferencing to a whole new level by bringing the first change to the call initiation paradigm since the telephone was invented. And while IM text messaging has been the traditional method of communicating using the presence metaphor, advanced conferencing systems (Lotus, Microsoft, FVC, others) already integrate © 2004 Wainhouse Research, LLC Page 9
  • 11. Rich Media Conferencing 2004 Volume 1: Audio, Video, and Web Conferencing Infrastructure Products the full spectrum of rich media conferencing tools so that an IM session can easily escalate to include audio, video, or web conferencing. Because of the potential for IM and presence to impact conferencing, we have added IM and presence servers as a market segment to this report. 3. As if to underscore the potential of the above technologies, Microsoft and Oracle have joined IBM / Lotus, the current market leader, in delivering rich media conferencing as part of their enterprise software suits. Microsoft’s $200M acquisition of PlaceWare and their establishment of an entire division dedicated to real-time conferencing and collaboration has already resulted in the shipment of the Microsoft Office Live Communication Server – covered in the IM and presence server segment of this report. The entry of Microsoft into the rich media conferencing market promises to take audio-video-web conferencing solutions into the corporate mainstream, to increase general awareness, and to spur the entry of multiple “partner” products; at the same time Microsoft’s entry is guaranteed to change the competitive environment for all. The implications for the entire rich media infrastructure market, including vendors of audio, video, and web conferencing servers, cannot be understated – and are qualtified in the forecasts in this report. Wainhouse Research believes the conferencing infrastructure industry covers four different elements, as shown in our diagram. Our coverage of the industry is contained in three separate volumes: this volume which covers infrastructure products; a second volume that covers video endpoints, and a third volume that covers conferencing service providers. Products Media Network Audio/Video MCU Support Audio PSTN Gateway, Remote Management Video Text + ISDN IP + Gatekeeper Web/IM/Presence + Scheduling Reservations Server Graphics Media/Application Server Figure 1 Conferencing infrastructure components Methodology Wainhouse Research monitors the entire rich media conferencing market through its consulting, seminar/Summit, SpotCheck, and user activities, as well as by maintaining continuous contacts with the vendor and end user communities. Part of the research in support of this report included an on-line survey, details of which are included in an appendix to this report. In order to assess the current state of the market and to ground the forecast figures of this report in hard reality, we also interviewed and collected data from over thirty suppliers. Our data collection process maps supplier unit and revenue shipments into six product categories: 1. Audio Bridges: Hardware multipoint control units that enable multipoint audio calls over PSTN and IP networks. Page 10 © 2004 Wainhouse Research, LLC
  • 12. Rich Media Conferencing 2004 Volume 1: Audio, Video, and Web Conferencing Infrastructure Products 2. Video MCUs: Stand-alone products that enable multipoint video calls over ISDN and/or IP networks. We track both hardware MCUs and software MCUs for IP conferencing in this category. 3. Video Gateways: Hardware-based products than enable H.320/ISDN callers to connect to H.323/IP callers with a videoconferencing or data conferencing system. This category does NOT include POTS-PSTN/IP gateways for the voice-over-IP industry 4. IP Gatekeepers: Server products that perform the traditional H.323-defined gatekeeper functions (explained elsewhere in this report) as well as an important, emerging set of functions that bring videoconferencing closer to the world of standard telephony –enhanced directory services, call forwarding functions, call answering, etc. 5. Web Conferencing Servers: Server software and/or hardware that enables web- based collaboration for data conferencing and remote presentations. This category does not include web conferencing services which are covered in volume 3 of this report series. 6. IM & Presence Servers: Server software that provides an enterprise-class “presence and availability engine” to support text-based messaging and other forms of real-time conferencing. Major Trends Our forecast and supplier reviews note several trends that are shaping the future of the rich media conferencing industry, and their impact on the market for infrastructure products: Audio bridge manufacturers have completed the move to offering IP-friendly architectures by adding support for IP voice in both all-IP and dual-mode products. While the market for IP-based multipoint voice conferencing is materializing slower than expected, WR believes the demand for IP ports from both enterprises and service providers will fuel the market’s growth going forward. The web conferencing server market will benefit from a shift to internal hosting from web conference service providers as enterprise users seek more control, better integration into their IT environments, and a perceived increase in security. This trend is indicated by our user surveys. Unlike audio, the shift from ISDN to IP ports for videoconferencing MCUs is well underway with IP video ports outselling ISDN video ports on a ratio of about 6:1. While IP video network services are being marketed by upstarts like GlowPoint, Masergy, Internap, V-SPAN, IVCi, and others, their uptake has been slow. Thus the majority of the demand for IP video ports is coming from enterprise users. While demand for all forms of rich media conferencing ports and seats is generally robust throughout the forecast period, the movement from PSTN to IP ports for audio / video bridges and the commoditization of the web conferencing / IM feature set works to lower prices on a per-user basis resulting in limited revenue growth. Desktop videoconferencing may finally find its home as a feature that is added to IM and web conferencing rather than being a stand-alone application, which will fuel © 2004 Wainhouse Research, LLC Page 11
  • 13. Rich Media Conferencing 2004 Volume 1: Audio, Video, and Web Conferencing Infrastructure Products healthy growth in IP-based video infrastructure equipment (MCUs, gateways, gatekeepers). The need for stand-alone video gateways is quickly giving way in favor of mixed- mode MCUs that can also handle the gateway function. Rich media conferences will blur from being distinct audio, web, and video conferences into one IP-based rich media conferencing entitly that will accommodate endpoints with different audio, video, and data capabilities – and the infrastructure that will tie it all together. IM and presence will be increasingly used to initiate conferences of all types from within a growing number of applications. The market sizing for 2003 indicates that demand for rich media conferencing infrastructure products is growing and the economy is slowly improving. However, the improvement is slower than expected and has caused the adoption of certain segments of the market to be delayed by about a year compared to our previous forecast. Forecast Summary Our overall results forecast that the conferencing infrastructure industry will grow from about $475 million in 2003 to over $675 million in 2006, producing a compound annual growth rate of 7.3%, despite dramatic declines in average selling prices across the board. Infrastructure Revenue Forecast ($M) $800 $700 $600 $500 $400 $300 $200 $100 $0 2003 2004 2005 2006 2007 2008 Figure 2 Overall conferencing industry forecast Page 12 © 2004 Wainhouse Research, LLC
  • 14. Rich Media Conferencing 2004 Volume 1: Audio, Video, and Web Conferencing Infrastructure Products Infrastructure Revenue Forecast ($M) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2003 2008 Audio Video W eb, IM, Presence Figure 3 Changing shape of the conferencing infrastructure market However, trends now underway in both the conferencing infrastructure market and the rich media conferencing industry as a whole will continue to change the shape of the industry over the forecast period. The market for web conferencing and IM / presence servers and the market for audio conferencing servers will account for an increasing share of the market – at the expense of the market share for video conferencing MCUs, gateways, and gatekeepers. It is interesting to note that our forecast grows at about 12.6% CAGR from 2003 to 2006, then peaks and stagnates due to a number of factors explained in this report. Forecast details including specific market segment sizes, growth rates, and significant segment metrics where applicable (migration to IP, ports or seats, ASPs, enterprise vs service provider revenues, etc) can be found in chapter 5 of this report. © 2004 Wainhouse Research, LLC Page 13
  • 15. Rich Media Conferencing 2004 Volume 1: Audio, Video, and Web Conferencing Infrastructure Products Suppliers Covered in This Report Wainhouse Research has done extensive research on the conferencing infrastructure suppliers and their equipment. Each supplier is treated separately with a company review, strategy summary, and our analysis & opinion. The following companies are reviewed in detail. Arel Communications and Software Oracle Corporation Avaya Inc. Pactolus Communication Software, Inc. Bantu, Inc. Polycom Centra Software Prescom S.A. Cisco Systems, Inc. RADVISION Compunetix SnowShore Networks Convedia Corporation Sonexis, Inc. DST Spectel TANDBERG Data Connection Ltd (DCL) TANDBERG eDial Ubiquity Software First Virtual Communications V2 Forum Communication Systems, Inc VCON Huawei Technologies Viewtran Incorporated IBM VisionNex Technologies, Inc. Indigo Software, Inc. WebDialogs IP Unity WiredRed Software Corp Jabber, Inc. Zoom Macromedia ZTE Corporation Microsoft Page 14 © 2004 Wainhouse Research, LLC