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Recession and influenza fueling video conferencing growth – F&S

Tony Chan | September 7, 2009 | 0 Comments

Frost & Sullivan projects that the video conferencing endpoints market will growth by 15.3% this year, up from the 15% growth recorded last year despite the ongoing global recession. The analysis firm estimates that the total value of this market will reach some US$379.4 million by the end of the year.

According to Frost and Sullivan, the growth is driven by budget cuts inside enterprises, which have cut travel and must now rely on video conferencing for virtual meetings.

“This upbeat outlook for video conferencing solutions is buoyed by the need for real-time collaboration as productivity tools, and the increasing availability of next-generation video conferencing devices and compression technologies,” says Pranabesh Nath, industry analyst at Frost & Sullivan.

“Despite reduced spending in a recessionary climate, most companies realize that investing in video conferencing solutions provides long-term savings compared to direct travel, by enabling cost-effective long-distance communications,” he added. “It also increases employee productivity and collaboration due to the ability to conduct more meetings than is possible with physical travel.”

Adoption in the more mature economies such as Australia, Japan and South Korea have been dominated by the corporate sector, particularly the banking, financial services and insurance (BFSI) industry. High-definition video conferencing solutions were the clear favourite for new deployments in these markets.

Whilst in the developing countries like India and China, the government sector was the biggest spender on video conferencing, leaning towards the more affordable and lower bandwidth-compatible standard definition systems; although Nath says that high-definition solutions are gaining popularity in these markets as well.

Nath believes that video conferencing technologies offer clear benefits. “It is a compelling tool for better cost management, effective communications and even a measure to reduce carbon footprint,” he says. “Such advantages, coupled with more flexible pay-per-use models and managed services, are expected to eventually drive wider adoption and growth for video conferencing.”

At the same time, the global influenza outbreak is also curbing travel, further fuelling the need for video conferencing solutions.

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