Sales of VC Systems expected to rise

1st March 2004

Frost & Sullivan expects bold investments in technology to benefit the adoption of conferencing technologies; sales of VC systems forecast to rise from $568mn in 2003 to $1.49 billion by 2009.

Growth in the videoconferencing market has been hampered by cutbacks in IT budgets, deferred projects, and smaller deployments, but it should rebound to a high growth path in 2004 with economic recovery already under way in most countries. So concludes a new report by Frost & Sullivan.

“Slow progress made by voice and video over IP has hindered industry progress,” says Frost & Sullivan Strategic Analyst, Roopam Jain. “Videoconferencing vendors need to tackle real-world implementation issues related to migration to IP and catch the attention of decision makers for prioritizing investments in conferencing technologies.”

Ongoing transition to IP will increasingly facilitate integration of videoconferencing with applications such as presence detection, instant messaging, streaming, and web collaboration — primarily being used on IP networks. Lower network costs, greater flexibility, and better performance encourage migration to IP networks that can provide a more reliable and robust videoconferencing experience.

Videoconferencing continues to be perceived as a hard to use technology. To enhance user adoption, vendors must make a cohesive effort to move the sales teams, support staff, and all end-user contact points to the approach of “offering valuable business solutions, not products.” “Developing an application sales approach is important and will serve as a competitive differentiator as the technology continues to mature,” says Jain.

Companies that concentrate on improved value proposition as the real market driver, rather than merely offering more product bells and whistles, are likely to find success.

*Taken from 'Videoconferencing Insight Newsletter' posted 8th February 2004