Merger and acquisition activities are heating up in the unified collaborative solutions market that provides videoconferencing. Prompted by the severe economic downturn, business enterprises on a global basis are restricting travel budgets to control costs. This makes high-definition telepresence solutions a cost-induced alternative in an increasingly interactive world. This market stands to gain in the near future since enterprises, governments, and educational institutions are increasingly recognizing the productivity-enhancing benefits of video conferencing.
Yesterday, Cisco System Inc. (CSCO) raised its acquisition price to $3.41 billion for Tandberg ASA, the largest videoconferencing product maker in the world with around 35% market share. Cisco itself is a developer of high-end videoconferencing solutions, which mainly comprises custom-designed digital boardrooms for executives and boards to hold global meetings. The merged entity will definitely be a much bigger player in the industry. On Nov 10, computer accessories maker Logitech International SA (LOGI) announced that the company will purchase privately held LifeSize Communications Inc, a developer of high-end high-definition videoconferencing gear for $405 million.
Hewlett-Packard Company (HPQ) another major player in this field has decided to acquire 3Com Corp. (COMS) for $2.7 billion. This acquisition will strengthen Hewlett-Packard’s videoconferencing solutions beside its IP-based data center related solutions. Virtual desktop maker Citrix Systems Inc. (CTXS) has recently strengthened its web conferencing solutions by adding integrated toll-free audio services for its GoToMeeting Corporate and GoToWebinar product-lines.
As of now, Polycom Inc. (PLCM), the second largest videoconferencing solutions developer in the world with an estimated 30% market share, remains the only pure play unified collaborative solutions provider which is yet to collaborate with another company. To cope with the competitive threat, Polycom has decided to strengthen its existing business agreements with leading original equipment manufacturers (OEMs) and resellers in the telecom industry.
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. According to Gartner Inc, the video conferencing market will grow at a CAGR (compound annual growth rate) of 17.8% between 2008 and 2013, rising from $3.8 billion to reach $8.6 billion.
Read the full analyst report on “CSCO”
Read the full analyst report on “LOGI”
Read the full analyst report on “COMS”
Read the full analyst report on “CTXS”
Read the full analyst report on “HPQ”
Read the full analyst report on “PLCM”
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