February 2011

video conferencing Stickiness grows

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Economic considerations drove some quick adoption but a range of benefits and richer experiences are making users stay

Organisations today are looking at cost-effective and time saving means to enhance productivity and reduce cycle times. Governments are no exception to that. Video conferencing is one such tool that helps them achieve these objectives, offering ‘face-to-face’ communication between two or even more locations.

In fact, the economic slump last year

helped the video conferencing market, with more and more organisations opening up to the technology that they had earlier turned down as difficult-to-use and insufficient. With budgetary constraints and reduced or restricted travel budgets, video conferencing has picked up as an alternative to face-to-face meetings.

Video has transitioned from its historic limitations to become a mission-critical component of unified communications (UC) too. It has reached the 3G mobile applications arena including streaming, instant messaging and scheduling. It is offered over both Integrated Services Digital Network (ISDN) and Internet Protocol (IP) networks.

As per market research firm BizAcumen, improved flexibility, seamless integration with other applications, enhanced reliability and lower cost of networks are propelling the video conferencing industry to adopt video conferencing based on IP networks.

Primarily, three types of video conferencing solutions are being used: room-based, telepresence and desktop-based. A combination of these is also often used. Meanwhile, some major telcos as well as system and service providers have emerged as significant players in the video conferencing market, globally.

Standards and interoperability

There are certain umbrella standards for videoconferencing, as recommended by International Telecommunications Union (ITU).

H.320 is the ITU recommendation for videoconferencing over ISDN, while H.324 is for transmissions over analogue phone lines. The H.323 standard is suitable for a mix of IP, PSTN and ISDN networks.

H.264 SVC (scalable video coding) is a compression standard that enables video conferencing systems to achieve highly error resilient IP video transmission over the public Internet without quality-of-service enhanced lines. This standard has enabled wide scale deployment of high-definition desktop video conferencing and made possible new architectures that reduce latency between transmitting source and receiver, resulting in fluid communication without pauses. Also, it is easier to set up for live videoconferencing call along with web conferencing for use in data collaboration. These combined technologies enable users to have a much richer multimedia environment for live meetings, collaboration and presentations.

Also, the Unified Communications Interoperability Forum (UCIF), a non-profit alliance between communication vendors, was launched on May 19, 2010. The organisation’s vision is to maximise the interoperability of UC, based on existing standards. Founding members of UCIF include HP, Microsoft, Polycom, Logitech and Juniper Networks.

Recent developments

A vast majority of video conferencing deployments today are taking place on IP networks. The infrastructure market segment is also dynamic. Recently added capabilities include support for high-definition video, the ability to host and manage multi-codec sessions, configurable video attendants, and automated streaming and archiving appliances.

The enterprise telepresence and video conferencing industry includes both appliance-based and software-based endpoints and infrastructure for telepresence, group systems, executive desktop systems, and software-based personal systems, as per the Wainhouse Research report. Put together, these market segments make up for over $2 billion in annual revenue.

The report predicts that the overall enterprise telepresence and video conferencing market will grow 15 percent annually over the next five years to reach $4.3B in 2014. Currently, there are around one million installed telepresence and video conferencing endpoints in businesses of all types and sizes, as well as governments, universities, financial institutions, and hospitals across the world.

Over three-fourth of the appliance-based video endpoints today consist of single-codec group systems, while multi-codec immersive telepresence systems and executive desktop systems make up for the rest.

Telepresence is emerging as a preferred mode of conferencing for top brasses because of the immersive experience it provides

Asia-Pacific video conferencing endpoints market to touch

US $367.5mn
by end of 2010

 Growth everywhere]
According to a Frost & Sullivan analysis of the European videoconferencing endpoints market, it clocked revenue of US $383.6 million in 2009 and is estimated to reach $1.03 billion in 2015 with a compound annual growth rate (CAGR) of 18 percent. The visual collaboration endpoints covered in this research are group systems and executive desktop systems videophones, including high-definition and standard-definition.

Another Frost & Sullivan study says the Asia-Pacific video conferencing endpoints market, comprising 14 countries including Japan, will be an estimated US $367.5 million by the end of 2010, with a 9.5 percent growth year-on-year. The shipment in 2010 will be 108,434 units, a growth of 14 percent, according to the report. Further, the region’s market outlook is a CAGR of 13.6 percent for 2011-2016, with a revenue forecast of US $820 million in 2016.

Video conferencing market for India, as per industry sources, was an estimated `190 crore for FY 2009-10, which was a growth of 25 percent over the previous year. Endpoints constituted 80 percent of the market, while infrastructure made up for the rest. According to Frost & Sullivan, India leads the Saarc region’s UC market in terms of total spending and overall awareness, with a good potential for the growth of UC applications.

India has introduced e-trials, using video conferencing, to increase the efficiency of the criminal justice system. This is aimed at helping the police, judiciary and prisons departments to save manpower, and bring speedy justice and increased security, while realising considerable time and cost efficiencies.

Drivers and inhibitors

There are two key business drivers that are encouraging video adoption. These include the need to meet the online collaboration needs of an increasingly virtual workforce and the desire to use video to reduce travel budgets. These two drivers work together: If video doesn’t enable online collaboration and provide a good meeting experience, it won’t be an effective alternative to travel. For senior executives who value high-touch interaction with fellow business leaders, customers and partners, telepresence is emerging as a preferred solution because of the ‘immersive’ experience provided by the technology. It also reduces the consciousness to video systems, thus enabling participants to focus on the interaction.
In Europe, the stringent environmental policies have also given reason for organisations to embrace video conferencing. This is besides their need to decrease travel expenses and explore alternative ways to collaborate and meet clients. Videoconferencing also speeds up the decision-making process.

However, despite tremendous growth potential, there are two outstanding issues that come in the way of videoconferencing becoming a standard form of communication. These are: lack of eye contact and appearance consciousness due to the camera’s presence. Eye contact plays a crucial role in conversational turn-taking, perceived attention and intent, among other aspects of group communication. However, this issue is being addressed through research that generates a synthetic image with eye contact using stereo reconstruction. Thus, the issue of eye-contact may be solved with advancement in technology. On the other hand, the issue of appearance consciousness will also lose ground as people become accustomed to video conferencing.

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