Online collaboration, and videoconferencing in particular, has been a significant catalyst for business productivity during the last decade. However, the demand for expensive telepresence systems and traditional room-based videoconference installations has reached its pinnacle.
Enterprise videoconferencing infrastructure and endpoint hardware revenues are forecast to be relatively flat through 2020 -- growing slightly at a 2.1 percent CAGR -- according to the latest worldwide market study by ABI Research.
Software solutions are becoming a more popular choice, with the ability to extend existing infrastructure and endpoints and lessen the need for installing new permanent hardware.
"With the current market focus on cloud computing and hardware virtualization, dedicated hardware sales will see little growth in all video delivery markets, including videoconferencing and telepresence hardware,” said Eric Abbruzzese, research analyst at ABI Research.
According to the ABI assessment, hardware-focused companies -- such as Cisco, Polycom, and Avaya -- will have difficultly seeing success in both infrastructure and endpoint sales if their products do not adapt to the virtualization-focused markets.
Each of these companies have already begun the transition, with their own cloud videoconferencing platform aimed at leveraging their existing products as the foundation for the new service.
The Asia-Pacific region -- more specifically China -- is forecast for stronger growth through 2020 (5.3 percent for infrastructure and 4.3 percent for endpoint), likely due to non-China based companies continuing to conduct business in China and require strong videoconferencing platforms.
ABI believes that consumer videoconferencing is continuing to see strong growth, with products such as Skype, ooVoo, and Google Hangouts expanding their global user base. Moreover, these free or low-cost services have already gained adoption in many businesses across the globe.
Small businesses, not interested in investing in large, permanent hardware solutions for videoconferencing, have the potential to instead choose these consumer-focused solutions, as they offer similar features to enterprise solutions.
With virtualization, newer companies -- such as Blue Jeans and Vidyo -- are able to offer fully featured, enterprise-focused services without the need for dedicated infrastructure and endpoints. Besides, new users of these services can start with little or no investment in video equipment.