There’s an old saying about change: It happens slowly until it doesn’t. The video conferencing and telepresence market has been one of those slow changes in business communications. Vendors have been developing products for years, saying it was the wave of the future. Now, Avaya’s sniffing at acquiring Radvision could be a sign that wave is cresting.
Israeli business newspaper Globes is reporting that Avaya is on the verge of buying Radvision, a struggling video conferencing specialist with respectable software, for $200 million. The move would enhance Avaya’s assets to compete against market leader Cisco, surging Polycom and LifeSize in the burgeoning video-conferencing market.
And video conferencing is booming, relatively speaking. Where the IP telephony market and managed telecom services is a $200 billion-plus market, video conferencing is a fraction of that, standing at less than $700 million annually. According to IDC, video conferencing – as a market segment – is growing rapidly, more than 20 percent this year alone.
Driving video adoption are decreasing costs and easier-to-use, more accessible technology. Even at modest adoption rates, the growth is finally enough to bring down the cost of the technology to the point where it’s worth considering by frugal business buyers.
Another adoption driver is that video conferencing is moving out of the conference room – a place where it was relegated by high cost – to desktops and mobile devices at an increasing pace. LifeSize, a vendor focused on low-cost, high-def video conferencing, earlier this year bought Italy-based Mirial, a specialist in high-quality video conferencing for mobile devices. Cisco is expected to expand its video conferencing capabilities with its Cius tablet, which is essentially a portable multipurpose communicator.
The big driver of video conferencing, though, may be free and low-cost consumer services. Microsoft earlier this year paid $8 billion to acquire Skype, owner of the largest online community (second to Facebook) that sports free voice and video communications. Apple iPhone users swear by FaceTime, a video chat service embedded in the smartphone and iPad tablets. And instant message applications such as Yahoo Messenger and AOL AIM have free video chat capabilities. These services are prompting people to use consumer applications to conduct business.
Maintaining control over communications and reaping the benefits are the motivation for businesses to buy into the video conferencing vision. And that’s part of the reason for all the vendor activity. Cisco, Polycom, Avaya and others are making moves now to acquire capacity and capabilities, and create barriers to entry for would-be challengers.
Cisco’s 2010 acquisition of Tandberg for $3.3 billion, for instance, was designed to provide Cisco with an alternative offering to its revolutionary-yet-expensive TelePresence platform. With Tandberg, Cisco is plying the channel with new video conferencing offerings to extend TelePresence capabilities to the desktop. The deal had the additional benefit of keeping Tandberg, a previous hot commodity, out of the hands of a would-be competitor.
Cisco isn’t the only one aiming for a greater video share. Earlier this year, Hewlett-Packard sold its nascent video conferencing technology and business to Polycom, which plans to use the assets to better compete against Cisco. Following the deal, Polycom struck alliances with Juniper Networks, HP and Microsoft to support and enhance its video offerings.
Prior to HP exiting the video conferencing business, it took a look at Radvision. The two companies were reportedly on the verge of a deal but couldn’t agree on a price.
LifeSize, the challenger in this field, isn’t alone, either. Its parent, Logitech, is working to support the video conferencing offerings of all technology providers. The idea is to make its peripherals (cameras, microphones, etc.) the default add-on to video conferencing sales.
Video conferencing still has a long ways to go before it’s a bona fide bonanza. The level of vendor activity indicates the market may be moving from curiosity to widespread adoption. When that happens, solution providers will have ample opportunities for designing, implementing and managing video conferencing solutions.
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