Videoconferencing brings in $2.7 billion revenues

It may never have achieved the dizzy heights its evangelists hoped for, but videoconferencing brought in hefty revenues last year.


Things are looking up in the videoconferencing world after results from the IDC Worldwide Enterprise Videoconferencing and Telepresence Qview showed a strong fourth quarter in 2011.

The report revealed videoconferencing revenue had grown 19 per cent quarter-over-quarter and 24.6 per cent year-on-year to reach $807.9 million in the final three months of last year.

The full year of 2011 saw an overall increase of 20.5 per cent, with revenues reaching $2.7 billion.

Rich Costello, senior analyst of enterprise communications infrastructure at IDC, explained the reason for the large growth.

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"Growth has been spurred on by more well-defined video use cases among organisations across a range of vertical market segments, including healthcare, higher education, financial services, legal, law enforcement, manufacturing and retail," he said.

"We also expect growth over the next several years to be bolstered by the impact of video integrated with vendors' unified communications and collaboration portfolios, and increasing video usage among small workgroups, desktop users and mobile device users."

The growth rate has positive implications for future business opportunities as well.

"It is promising to see videoconferencing revenues growing, as companies begin to recognise the business benefits that video conferencing can bring," said Chris Argent, financial services consultant at ICT consultancy Hudson & Yorke.

Argent explained the possibility for exploring videoconferencing for customer-facing services, instead of just internal, employee focused services.

"As consumers are growing used to socialising, banking and shopping in a virtual way, many would be happy to discuss and buy financial products and other services from a video agent," Argent said.

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"Advances in technology and the falling cost of network bandwidth means the opportunity to embrace video conferencing and develop innovative uses exists now more than ever before"

Cisco held the top spot in the quarter with 35.5 per cent year-on-year growth, and holds 54.3 per cent of the market share.

Polycom's revenue also increased 15.2 per cent year over year in Q4, which meant it recorded 20.8 per cent annual growth for the full year.

"There is little doubt about the success videoconferencing and telepresence have had over the past few years, fueled by strong revenue and shipment growth rates and the increasing popularity of video among enterprises," said Petr Jirovsky, senior research analyst at Worldwide Networking Trackers Research.

"The enterprise videoconferencing and telepresence market will continue to be one of the fastest growing networking markets for the foreseeable future."

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