Videoconferencing Continues Precipitous Decline

Editor’s note: As part of our special editorial partnership, Channelnomics is publishing this recent article from CRN in the UK.

The videoconferencing market continued to feel the pain in 2012′s third quarter, as the unyielding economic climate saw businesses shun high-end telepresence systems.

According to IDC research, the worth of the enterprise video market contracted 4.8 percent during Q3, with market leaders Cisco Systems Inc. and Polycom Inc. posting annual sales declines of 14.7 and 15.2 percent respectively. Cisco remains way out in front, but its market share has shrunk five points to 43.3 percent in the past 12 months. Polycom accounts for about a quarter of the market.

The Latin America and Asia-Pacific market appears to be in rude health, with Q3 revenue in these regions growing 13.7 and 9.7 percent respectively on an annual basis. But it was a different story in the more mature markets of North America and EMEA, with market worth falling 11.5 and 10.8 percent.

The market for immersive telepresence systems plummeted 35.7 percent annually in Q3, while sales of other videoconferencing components, such as gateways and firewalls, took a 26.8 percent hit. Revenue from single-codec video products were up just 0.4 percent, while the personal videoconferencing market grew 8.7 percent and the video MCU space expanded 5 percent.

“As expected, a down year for the overall enterprise videoconferencing and telepresence market continued in 3Q12. This is mostly due to uncertainty stemming from macroeconomic concerns, and a continuing decline in high-end immersive systems,” said IDC analyst Rich Costello.

“We also feel that customers are considering more strategic approaches to deploying video technology and applications, leading to longer decision cycles,” Costello said.

But Petr Jirovski, an IDC analyst focused on worldwide networking trackers research, claimed video adoption is still “being driven by video integrations with vendors’ UC and collaboration portfolios”. He added that the growing popularity of desktop, mobile and small workgroup video technologies will also boost the market next year.

“Video as a key component of collaboration continues to place high on the list of priorities for many organizations and we anticipate a return to positive market growth in 2013,” said Jirovski.

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3 Responses to “Videoconferencing Continues Precipitous Decline”

  • craig kensek:

    “If you’ve been playing poker for half an hour and you still don’t know who the patsy is, you’re the patsy.” – Warren Buffet

    Many of the thronging masses still seem to be oblivious to the fact that much of communication is non-verbal. These are expensive solutions to benefit from the visual and social aspect of a meeting. A series of squares showing faces on a monitor just isn’t the same. It’s a failure on the marketing team’s parts that they haven’t been able to successfully convey this message, nor have they been able to deliver a product at the proper price point to the marketplace.

  • The headline here is a bit misleading, as the facts are about the decline in sales revenue from hardware, while the industry is reporting growth and expansion with both app based services that work on already installed hardware (PCs, Macs) as well as on newly acquired tablets (iPads and Androids.)

    This shift on where the dollars are being spent is directly related to the handheld tablets and smartphones having the power and capabilities of the far more expensive single location usage hardware from Cisco and Polycom. Both are shifting into software and cloud services, but my guess is that WebEx revenue is not attributed to Cisco’s Telepresence or video hardware group because it’s not even interoperable yet, something they have been promising that for over a year to customers.

    Polycom’s late pivot into software is a big non-starter as they still suffer from hardware sales mentality and are not built as a company to really be in the cloud space yet. There’s also the looming threats from lower priced service/hardware suppliers like ChatOne as well as emerging market player Magor (whom we work with and use) that has far more comprehensive offerings with more efficient pricing models.

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