Web Conferencing Stays Strong in a Down Market


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An analyst briefing presentation delivered by unified communications and collaboration industry director Melanie Turek.

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  • An excellent article for channel organizations who are seeing the endpoint video conference market stall and the PBX market flatten. These resellers could benefit by the strength of the Web conferencing market by reseller tools such as the RHUB TurboMeeting conferencing server – an example of a product designed specifically for the channel and one that puts channel companies in the middle of an exciting, growing market
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  • I'll add that businesses shouldn't go cheap and use a simple Skype or iChat for their meetings. Here is why http://webcastingsoftware.com/5-reasons-webcasts-are-better-than-video-chats/
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Web Conferencing Stays Strong in a Down Market

  1. 1. Web Conferencing Stays Strong in a Down Market Melanie Turek, Industry Director North America ICT Practice March 17, 2011Frost & Sullivan’s Growth Consulting can assist with your growth strategies
  2. 2. Today’s Presenter: Melanie Turek Functional Expertise Experience in strategic consulting and market research, including market-leading research on unified communications and scores of growth consulting projects with dozens of global clients. Particular expertise in: - Market Research for Unified Communications and Collaboration - Generating SWOT Analysis, Market Sizing & Market Analysis - Consulting on Global Strategic Projects on Market Entry, Product Placement, Recommendations for Development and Growth - Consulting on Sales & Marketing Initiatives, including White Papers, Webcasts and Live Events Industry Expertise Experience base covering a broad range of sectors, leveraging long-standing relationships with leading industry participants’ senior executives and customer organizations: - Conferencing - Instant Messaging & Presence - Unified CommunicationsMelanie Turek - Social NetworkingIndustry Director What I bring to the TeamUnified Communications and Technical expertise and in-depth understanding of the Unified Communications & Collaboration sectorCollaboration Efficient and skilled analytic capabilities Fast-paced, fact-based & pragmatic delivery of high-impact business recommendationsFrost & Sullivan Market leading mar-com deliverables, including papers, webcasts and in-person speaking eventsNorth AmericaSteamboat, CO Career Highlights Joined Frost & Sullivan as a Principal Analyst to jump-start UC Practice in 2006 Founding Partner of Nemertes Research Inc. Senior Managing Editor at InformationWeek Magazine Education BA with Honors from Harvard College, Cambridge, MA, USA Nationality: American 2
  3. 3. AgendaWeb Conferencing Market OverviewPremises-Based Market HighlightsHosted Services Market HighlightsEnd User Survey Data: Web ConferencingBest Practices & RecommendationsQuestions & Answers 3
  4. 4. Market DefinitionsPremises-Based Web Conferencing: Available as a licensed product,organizations can install the web conferencing software on their own servers.Web Conferencing Hosted Services: Also referred to as SaaS (Software as aService), hosted services are a provisioning model where software is hosted byvendors in their data centers and provided to customers via the Internet.Web Conferencing Managed Services: Designed either for collocation orprovisioning at the customers site and managed on-site or off-site by a managedservice provider.Note: Since premises based web conferencing is increasingly being integrated as part of a bigger UC solution, it ischallenging to isolate revenues for web conferencing software. Revenues in this research are not based on total revenuesfrom UC solutions such as IBM Sametime and Microsoft OCS/Lync, but only a portion that reflects estimated webconferencing usage based on a combination of vendor provided and user level information. 4
  5. 5. Market Segmentation Web Collaboration On-premises Web Webcasting Web Conferencing Clientless Conferencing Services Remote Support Software SaaS Vendors Standalone Web Conferencing Web Meetings Webinars Web Conferencing integrated into UC Products Resellers Source: Frost & Sullivan 5
  6. 6. Research Methodology• Geographic region covered - Global (North America, Europe, and Asia Pacific).• Base year for this research service is 2009 and the Forecast Period is 2010-2015. In-house Secondary Information and Research External Resources Vendors/ Channel Partners/ Primary Service Providers Resellers Research (Direct Sales) (Indirect Sales) Data Collation, Analysis, and Strategic Review Final Research Service Source: Frost & Sullivan 6
  7. 7. On-premises Versus Hosted Web Conferencing• The overall trend toward outsourcing of IT and shift to SaaS and cloud computing is forcing IT departments to reevaluate how they implement their email and collaboration solutions.• We expect the market for on-premises web conferencing solutions to remain strong, especially among enterprise users, leading to rapid adoption.• As the number of web conferencing applications increase, so do the demands it places on organizations’ resources. Currently, the debate is shifting from software versus services to more of a flexible deployment model leading to hybrid solutions as well as private clouds to meet the varying needs of customers. Key Considerations for Web Conferencing Deployment Models Capability Volume In-house resources in IT, Frequency, scale and type event/meeting management of conferencing Cost Security Investments the Need for security, control enterprise is willing to make Source: Frost & Sullivan 7
  8. 8. Premises-based vs. Hosted Web Conferencing Web Conferencing Market: On-premises Versus Hosted Revenues (World), 2009 and 2015 2009 2015 On- On- premises premises 19.3% 27.8% Hosted Hosted 80.7% 72.2% Web 2009 2015 (%) Conferencing (%)Hosted 80.7 72.2On-Premises 19.3 27.8Total 100.0 100.0 Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan 8
  9. 9. Major Findings•The market for UC solutions is currently embryonic and is expected to gainsteam, which will push on-premises web conferencing.• As the North American market matures, strong growth will be driven byregional adoption.• Mobility is hot and will remain a key focus in 2011.• Video usage is gaining unprecedented attention.• Social media integration is fast evolving to become a meaningful businessdifferentiator.• With the Move to UC the purchase decision is increasingly shifting to IT.• As products mature, more open API’s and application integrationopportunities are emerging.• Channel opportunities are emerging at a fast pace.• On-premises web conferencing solutions have a significantly smallerpenetration among SMBs. 9
  10. 10. Web Conferencing and Collaboration - Growth Momentum Growth Stats 2009• On-premises web conferencing software revenues grew by 14.6% in 2009, reaching $263 million globally. Revenues are expected to reach $1.13 billion in 2015, supporting a widening user base, with a projected revenue growth of 27.6 percent (CAGR 2009-2015).• Hosted services revenues are expected to reach $2.85 billion in 2015, supporting a widening user base, with a projected revenue growth of 17.2 percent (CAGR 2009-2015).• Revenues for web event services (webinar and webcasting) reached $226.8 million in 2009 representing a 16% growth over the prior year.• Global web-based remote support market reached $209.3 million in 2009, growing by 18% over 2008. Web Conferencing and Collaboration Market * A $1.70 billion market in 2009 forecast to reach $ 4.12 Billion by 2014 - 5 Year CAGR is 19.4% *Includes global web conferencing hosted services, on-premise web conferencing, web events, and remote support markets. Frost & Sullivan offers in depth analysis on each of these markets. 10
  11. 11. Key Trends• Shifting channel strategies – • As UC vendors bundle web conferencing with their core UC offerings, there will be a bigger emphasis on channel partner sales. • Web conferencing vendors continue to leverage conferencing service providers (CSPs) as a key channel to reach a wider base of customers. • The current web conferencing attach rate to audio conferencing services is in the range of 8 to 10 percent. • CSPs will continue to represent a key channel to open up future growth opportunities for upselling web conferencing.• Emerging competition – • Skype is entering the conferencing market with its recent agreement with Citrix Online. That, along with new efforts by Google to enter the market (despite its failure to gain traction with Google Wave) will present an alternative to SMBs. 11
  12. 12. Small and Mid-sized Businesses - A Key Target Market SMBs 53.7% Large Enterprises 46.3% Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan 12
  13. 13. Pricing Analysis: Premises-based Web Conferencing Premises-Based Web Conferencing Software Market: Average Selling Prices (World), 2009 Pricing Plan Average Selling Prices US ($) User CAL pricing $64 Concurrent user or Per Port $300 Pricing Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan 13
  14. 14. Average Selling Prices: SaaS Web Conferencing Average Selling Prices Pricing Plan US ($) Usage based pricing 12 cents/minute Named User Pricing $31/month/named user Concurrent/ Port price $67/month/port Source: Frost & Sullivan 14
  15. 15. 2010 End User Survey Web Conferencing Results 15
  16. 16. End User Survey Scope2010 North America Communications & Collaboration Products and Services200 companies across US & CanadaCompany Size: • 21% >500 employees; 5% >10k; • 79% <500; 33% <100Industries: • Healthcare, Financial Services, Hospitality, IT/Telecom, Retail, Public Sector • Each approx 16.5% of totalBudget allocation: • Half of participants say IT budget (servers, storage, networking) <30% of total expenditure • Half of participants say UC&C budget is <20% of total expenditureStatus of deploying UC: • 30% have already; 28% in process; 4% planning/evaluating; 18% have no plans 16
  17. 17. Conferencing Use Importance 12 month plan DriversAudio 65% extensive company- 60% very 51% increase use Reduce cost wide 34% somewhat 42% maintain use Improve work/life balance 32% mainly senior Enhance mobility management Improve collaborationWeb 65% extensive 60% very 52% increase use Improve work/life balance 30% mainly senior 33% somewhat 40% maintain use Reduce cost management Increase collaboration Accelerate decision makingVideo 54% extensive 62% very 49% increase use Accelerate decision making 40% mainly senior 35% somewhat 45% maintain use Improve collaboration management Reduce travel Enhance mobilityTele- 67% extensive 58% very 54% increase Environmental goalsPresence 27% mainly senior 38% somewhat 40% maintain Single point of access management Accelerate decision making Increase collaboration 17
  18. 18. Most Important Benefits of Communications and Collaboration Tools: Web ConferencingKey Take Away: Web conferencing is being utilized to improve collaboration and productivity acrossgeographically dispersed teams, enhance employee mobility and reduce costs. Most Important Benefits of Web Conferencing Base: Users, N=105 #1 Rankings Total of Top-Three Rankings Improve collaboration and productivity across 25% geographically dispersed teams 47% 15% Enhance employee mobility 47% 15% Reduce costs 42% 11% Accelerate decision making 36% 10% Reduce travel 31% 9% Improve customer service 30% Single point of access to multiple communications 9% applications 37% Help improve employees work/life balance and general 5% welfare 20% 2% Help advance our corporate environmental goals 10% 0% 20% 40% 60% Note: Multiple mention question. Q15. For each of the tools used in your organization’s daily operations, which are the three (3) most important benefits? “Source: Frost & Sullivan" 18
  19. 19. Factors Influencing the Decision to Delay Implementation / Not to Implement: Web ConferencingKey Take Away: The reasons for delaying implementation of web conferencing are mainly quality and applicationperformance issues. The perception of web conferencing providing low value/usefulness to the company is a keyrestraint for those not considering its implementation. Factors Influencing Delaying Implementation / Not Implementing Web Conferencing Base: Non-Users Delay implementation (N=43) Do not plan to implement (N=52) Quality/application performance issues 33% 8% Lack of user training, which leads to limited adoption 23% Delay implementation: Plan to 12% 23% implement the tool in the coming 2-3 Difficult to implement and integrate with existing infrastructure years. We have other technology investment priorities 23% Do not plan to implement: Either do 12% not consider the tool, or consider, but Cost (not cost-effective for our company) 21% without any time frames. 21% 21% Security issues 13% General economic environment 19% 13% Difficult to manage 16% 10% Dissatisfied with current vendor support and/or product/portfolio 16% roadmap 2% Not useful for our company (low value for our company) 14% 46% Not user-friendly (difficult to use) 14% 6% Current solution does not fit with our vision for the evolution of our IT 7% and communications infrastructure 10% 0% 20% 40% 60% Note: Multiple mention question. Q36. What is prompting your decision to delay implementation of web conferencing? “Source: Frost & Sullivan" Q37. What is prompting your decision to not use at this point? 19
  20. 20. Best Practices and Recommendations Vendors End Users• Have a video plan • Consolidate for better pricing• Pay attention to social media • Integrate with other enterprise• Don’t ignore UC communications• Premises and SaaS options are • Evaluate deployment models key • Train, train, train• Pricing pressures will continue • Model from the top down• Get to know IT 20
  21. 21. Next Steps Request a proposal for or Growth Partnership Services or Growth Consulting Services 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 2011: A Frost & Sullivan Global Congress on Corporate Growth (www.gil-global.com) Register for Frost & Sullivan’s Growth Opportunity Newsletter and keep abreast of innovative growth opportunities (www.frost.com/news) 21
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  24. 24. For Additional InformationMireya Espinoza Angie MontoyaGlobal Director Global Analyst Briefing CoordinatorCorporate Communications Marketing(210) 247-3870 (210) 247-2435Mireya.espinoza@frost.com amontoya@frost.comElka Popova Craig HaysResearch Manager Sales ManagerUnified Communication Information & Communication(416) 495-2699 TechnologiesElka.popova@frost.com (210) 247-2460 chays@frost.com 24