The unified collaborative solutions market offering videoconferencing and telepresence, is becoming extremely competitive day by day. Videoconferencing becomes one of the utmost necessities for large enterprises to reduce costs when the economy has started to recover from severe recession. This makes high-definition telepresence solutions a cost-induced alternative in an increasingly interactive world.
Several industry researchers forecasted that the videoconferencing market stands to gain in the near future. Gartner estimated that this market size will reach $8.6 billion by 2015. Ovum forecasted an even rosier picture with market size reaching $1.1 billion by 2016. This lucrative business opportunity is gradually transforming videoconferencing market to a fiercely competitive one.
Polycom Inc. (PLCM) and Tandberg TV were the two traditional players in this field commanding almost 100% of the market. However, competition started after networking giant Cisco System Inc. (CSCO) purchased Tandberg TV in 2010. Further, Logitech International S.A. (LOGI) also joins the fray through its acquisition of LifeSize Communications Inc.As of now, Polycom remains the only pure play unified collaborative solutions provider.
Despite facing competitive pressure from Cisco, the unified collaborative solutions of Polycom received huge market traction especially in the emerging markets of China and India. Recently, the company has decided to purchase Visual Collaboration Business of Hewlett Packard Co. (HPQ) that includes its Halo Products and Managed Services for $89 million in cash. Acquisition of HP’s video conferencing unit will enable Polycom to expand into lucrative desktop and mobile video conferencing market.
In the meantime, Microsoft Corp. (MSFT), the largest software developer of the world, declared that it will acquire Skype. Skype is a leading developer of free video-calling software for PCs and other digital devices. Acquisition of Skype will enable Microsoft to offer videoconferencing from desktop computers.
Recently, Vidyo Inc., a new start-up in the videoconferencing market, has announced to introduce a price-effective alternative of high-quality videoconferencing on a range of devices from smartphone to room-based life-size format system. Vidyo is a venture-backed company, which is expected to become publicly traded by 2015. Video encode/decode technology of Vidyo can incorporate up to 9 TV screens for just $44,000 compared with $300,000 to $500,000 for three to four TV screens from its existing vendors.
We believe, in the long-run, the videoconferencing solutions market will see healthy demand as a result of several positive industry trends, including globalization and the proliferation of branch offices; concerns about time demand and high cost of travel; homeland security and other government initiatives; as well as distance learning and healthcare applications.
An improving global economy is now enabling several business enterprises to invest heavily on network infrastructure developments required to sustain huge bandwidth-consuming data. Videoconferencing is one such application. Rapid growth of high-speed fiber-based broadband networks is an indication that the videoconferencing market will be able to continue its current momentum in the long run. As a result, we are expecting a fierce competition in this market.
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