Videoconferencing: Bad Quarter, Bright Future

Carl Weinschenk

The road to hell, it is said, is paved with good intentions. It also may be possible to say that the road to a successful business sector is paved with its share of ups and downs.

On one hand, the potential uses of videoconferencing keep proliferating — it’s striking, in fact. Years after videoconferencing became a well-known communications tool, people continue to discuss new uses for it. It seems like an extended hype cycle, to borrow a term used by Gartner.

Part of this is that the idea of being able to see a person face to face and conduct business, to research or perform other tasks without going through the monumental hassle of traveling to see him or her is extremely powerful. On another level, the continual reduction in costs and innovation that lets videoconferencing migrate from purpose-built rooms to desktops and from specialized networks to the public Internet is bringing in new potential users, all of whom are thrilled by the possibilities and will extend that hype cycle.

But, into each category a little rain must fall. Last week, IDC reported that the global economic situation and the related drawback in IT spending have hit videoconferencing. The research firm, as reported by eWeek and other outlets, found that videoconferencing revenue was down:

The analysts reported Aug. 24 that revenue in the video conferencing space fell 10 percent in the second quarter from the same period in 2011, and 6.9 percent from the first quarter this year. The $564 million in revenue was the lowest the IDC analysts had seen since the first quarter of 2011 and more than 27 percent lower than the market record in the fourth quarter last year.

Cisco took the biggest hit in both the videoconferencing and immersive telepresence subcategory.

The good news in this down quarter is pretty obvious: The bad results are not due to a repudiation of videoconferencing and its offshoots. The cause is economic factors that are impacting all business. ZDNet’s Larry Dignan thinks a more fundamental shift is afoot. He is suggesting that the videoconferencing revenues are decreasing as more expensive total immersion approaches fade. It seems that while he thinks there is more to the slump than the economic climate, he isn’t questioning the fundamentals of the entire sector.

Indeed, it is possible that there is a big silver lining to the current slump: The videoconferencing that is going on is enabling organizations to avoid much more expensive travel. That no doubt is proving to skeptics that the promise of getting all or most of the work of a face-to-face meeting done via a videoconference is real. They will remember that once the economic conditions improve.

The bottom line, then, is that while videoconferencing, like many other things in IT, has hit a rough patch, it is a good candidate for full recovery. Phil Karcher, an analyst at Forrester Research, wrote a post at ZDNet on videoconferencing in advance of a Webinar he is running. He goes through the advantages that the approach offers and the evolution it is undergoing:


The videoconferencing market is going through significant change marked by efforts to make the historically cost-prohibitive technology more widely accessible. After a boom period sparked by interest in high-definition quality and epitomized by investments in multiscreen immersive telepresence studios, videoconferencing innovation today is happening on smaller screens like PCs, smartphones, and tablets that workers use in their everyday jobs.

The innovation isn’t stopping. Telepresence Options and other sites are reporting that Google is seeking a patent on 3D videoconferencing for mobile devices. The story has a good explanation of the approach, which involves dual cameras.

Videoconferencing, despite a rough few months, seems fundamentally healthy. Indeed, the cost-saving nature of the technology suggests that once the economic picture reverses, it will come back stronger than ever.



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