The latest quarterly numbers from IDC on the enterprise videoconferencing market are not good. The firm reports that equipment revenue declined 13.2 percent in the first quarter compared to the year-ago quarter. The decline was even worse, at 21.9 percent, measured against the fourth quarter of 2012.
Commentary in the press release by Rich Costello, IDC’s senior analyst for enterprise communications infrastructure, pointed to traditional reasons that a sector slows down. These include IT spending reductions and negative economic factors in some regions.
He also hinted at something new:
[“]In addition, IDC believes that increasing customer considerations over more software-centric solutions, virtualization, cloud-based offerings, and real-time browser-based communications are beginning to challenge the video equipment market as well."
Those wildcards mostly exist in the consumer world. The interesting possibility exists that the real market – the number of people actually using videoconferencing at work – is expanding while the numbers counted by firms such as IDC are shrinking. They may be focusing on a shrinking piece of a pie that is growing.
Reading between the lines of Costello’s comment suggests that rethinking is necessary. It also suggests a world of trouble for his firm and others like it: If the analysts use traditional ways of measuring the size of a market, they will be a step behind the BYOD and Web-based trends that are driving business communications and to some extent circumventing the IT department. It is entirely possible to interpret Costello’s comment as a tacit acknowledgement that his firm hasn’t figured out a way to judge the element of the market that is getting its communications tools from non-traditional sources.
That move into uncharted waters, for vendors as well as analysts, also was apparent in the news this week that Microsoft is integrating Skype and Lync. This is an important step from many angles. In this context, it demonstrates that the barriers between consumer and enterprise gear, which have been eroding since the Internet began its rise, essentially are gone.
This paragraph in the TechCrunch story on the integration certainly sounds like the old and narrow ways of assessing a market and its size will no longer cut it:
But as Tony Bates, President of the Skype division at Microsoft, explained then, the idea with Lync and Skype interoperability is to enable what he dubbed “B2X.” “B2X places the focus of business communication on enabling human interactions. B2X puts people first and looks at communications in a unified way, not as disparate technology silos focused on one task or protocol,” he had said.
Indeed, PC World’s Tony Bradley feels that the world can do quite nicely even if Lync – the more corporate of the merging platforms – goes away entirely. The point is that vendors, corporate planners and the sizeable cottage industry of organizations that produce the intelligence that mold many buying decisions must understand that the market has changed irrevocably. The way it is analyzed must change as well, or the numbers that are produced will lose their importance.
The news that the traditional enterprise videoconferencing market is down is useful. The idea that there are macro issues that in part are driving that reduction is useful as well. However, it is obvious that employees are not using less video today than a year ago. So the most important data – and, perhaps, the hardest to generate – focuses on the impact of non-traditional enterprise video tools on the picture we have of the market.