Despite the recession, or perhaps as a result, interest in video conferencing has never been higher, with vendors reporting growing sales, and growing interest from customers looking to use video conferencing to either replace travel, or improve collaboration for distributed workgroups.Nemertes has spent the last several months interviewing end-user organizations about their video plans. Our research shows a growing interest in all forms of video conferencing technologies, particularly high definition and telepresence (which we define as an immersive room systems combining lighting, furniture, and acoustics to provide attendees with the feeling of all being in the same room). In our latest round of interviews we found two key adoption trends, and we're keeping a close watch on a new technology development that offers the potential to rapidly increase the usability of high-definition video over variably performing networks.
Key Trend #1: We've finally entered "The Age of Video"
There's no doubt that video conferencing adoption rates are high among all market segments (desktop, room-to-room, and telepresence). Nearly three-quarters of Nemertes research participants are deploying or planning to deploy some form of video conferencing within their organizations, with the strongest growth areas being desktop and telepresence But why?
Research participants consistently state two key business drivers for adoption: the need to meet the collaboration needs of an increasingly virtual workforce, and the desire to use video to reduce travel or offset, reductions in travel budgets. In reality, these two drivers are really the same for if video did not improve the meeting experience, it would not be an effective alternative to travel. What we see among end-user organizations is something of a chicken-and-egg scenario--does video enable reduced travel? Or, does video improve productivity for those can't travel?
Often the answer to this dilemma is based on the application and the user. For senior executives who value high-touch interaction with fellow business leaders, customers, or partners, video systems such as telepresence provides the "next best thing to being there" experience, as the virtual reality nature of telepresence reduces awareness of the video systems, enabling participants to focus on each other.
IT architects looking to provide video conferencing capabilities for distributed workers are more likely to deploy room-based, desktop, or some combination of systems simply to provide for more effective meetings by enabling a higher form of social interaction that captures non-verbal as well as verbal communications, and that reduces participant multitasking by forcing people to engage with each other instead of simply staring at their telephone or using meeting time to work on other tasks.
None of the drivers for increased video conferencing adoption would mean anything if not for a third factor--falling cost coupled with improved quality. High definition video has made the leap from home theater to home and office, with room-based HD systems starting at a list price of approximately $5,000 per room (for camera and codec), while high-definition desktop applications are now emerging from a number of vendors. IT executives tell us that costs are falling for telepresence as well, though mean prices for system and setup still average approximately $250-300,000 per room (plus ongoing costs for maintenance, support, and bandwidth)
This video conferencing "perfect storm" has led as well to an increase in the number of options available in the marketplace. New entrants such as Vidyo and LifeSize compete with incumbents including TANDBGERG and Polycom, while vendors such as Avaya, Cisco, IBM, Microsoft, and ShoreTel increasingly deliver video as part of their unified communications offerings. Avistar, BT Conferencing, and Glowpoint provide hosted bridges and/or management services while service providers including AT&T, Global Crossing, Masergy, Tata, and Verizon deliver dedicated network services, extranet connectivity, and a full suite of management options.
Nemertes sees no sign of video uptake slowing. Participants in our 2009 communications and collaboration benchmark often cite video conferencing as one of the services that "survives the cut" as IT budgets are scaled back due to the recession, indeed, for all the aforementioned reasons--improved collaboration capabilities, reduced travel, falling system costs, and demonstrable business value--video conferencing deployments will continue to grow.
Key Trend #2: The Rise of Managed Services
Nemertes finds a split in how organizations are providing bandwidth to meet video conferencing requirements. For telepresence, most customers turn to service providers to obtain dedicated bandwidth. Why? Because telepresence requires a great deal of bandwidth; up to 4 Mbps per-screen, per-room. IT managers also see telepresence as a high-profile application. When a company has spent hundreds of thousands of dollars to deliver a premium video conferencing solution often utilized by top executives, IT job security depends on delivering a high quality user experience. IT architects simply don't want to take the chance that a critical telepresence session among executives, customers, and/or partners is interrupted because of issues on the data network. Despite technologies such as WAN optimization and QoS, they simply aren't willing to chance a misbehaving application disrupting a telepresence session.
It's a different story for room-based conferencing systems where the ROI for deployment is often based on cost savings from eliminating dedicated ISDN circuit and usage expenses. Those deploying desktop applications also rely on existing LAN and WAN bandwidth, though the ability to create policies that limit bandwidth consumption of desktop video conferencing applications is a key requirement for deployment.
Despite differences in bandwidth provisioning, a common characteristic among users of all types of video conferencing systems is the need for performance and system management. Nemertes sees the majority of organizations turning to managed service providers as a lower cost alternative to buying their own management platforms, training staff, and devoting time to administration. IT architects learned from VOIP that supporting real-time media applications over IP involved more than just turning on QoS. As such, they increasingly look to professional and/or managed service partners that already have the expertise to manage video quality across multiple locations as well as integrate multi-vendor environments. We are even seeing organizations turn to managed service providers to acquire video conferencing platforms as a leased service rather than one in which they buy their own on-premises systems.
Key Trend #3: H.264 Scalable Video Coding
A new standard for video encapsulation is beginning to emerge. H.264 Scalable Video Coding (SVC) is based on the idea of slicing individual frames into layers, with each layer holding part of a single frame's image. In the event of excess congestion or delay, H.264 SVC sessions still provide high quality even if end-points are only able to exchange a small percentage of layered frames. In other encapsulation approaches (such as H.264 or MPEG-4), congestion means that entire frames are lost, leading to visible degradation of video quality.
H.264 SVC standards are still evolving. Where there is agreement on coding/decoding, the actual transmission of H.264 SVC frames is still under development within the ITU. Video conferencing vendors including Radvision and Vidyo (and their partners) have already introduced H.264 SVC solutions, but until final standards are established, interoperability among different H.264 SVC solutions isn't possible.
These trends are but a small snapshot of our research; we're also tracking growing interest in SIP as the basis for integration of video into a unified communications architecture, growing interest in video storage/on-demand, concerns around video archiving and auditing to meet compliance requirements, and the challenges of managing desktop video. I'll touch on these issues in future postings.
