The recent Frost & Sullivan Web conferencing market study conducted by my colleague Roopam Jain highlights three areas of change for the industry. Here are a few key points in each; clients can download the full report at www.frost.com:
Channel Strategies
* As UC vendors bundle Web conferencing with their core UC offerings, we can expect a bigger emphasis on channel sales. In the future the focus will be on selling through a larger community of VARs and SIs, as vendors increasingly add web conferencing to email and other collaboration offerings.
* Web conferencing vendors continue to leverage conferencing service providers (CSPs) as a key channel to reach a wider base of customers. Web Conferencing sales by CSPs increased at a rapid pace in 2009, primarily driven by audio conferencing users adding web conferencing to their service plans.
* Within CSPs, the vendor mix has changed significantly in favor of WebEx and away from Microsoft Live Meeting. But CSPs are finding new opportunities in reselling Microsoft BPOS and OCS (now Lync) as well as in offering managed and hosted UC services for OCS/Lync.
* The trend toward low prices means channel partners must find opportunities in value-add services, as well as in bulk sales, in order to see long-term revenue gains.
Regional Markets
* Growth in Asia Pacific, at 29.2 percent in 2009 over 2008, surpassed other regions, thanks to SMB adoption and the fact that the region is starting from a smaller base. Growth in APAC is primarily coming from local vendors, such as NTT-IT and VCube.
* The North American market is starting to show signs of early maturity, with 8.1 percent growth in 2009. Pricing pressures are keeping revenue growth rates in check.
* The European market grew at 15.1 percent in 2009. While the market is still affected by the recent economic crisis, robust demand and the fact that the market is nowhere near maturity will result in robust growth.
Market Share *
* Citrix Online continues to grow its market share to become the number-two vendor in this space, at par with Microsoft. While in recent quarters its top line revenue growth has slowed, we believe the vendor is well positioned for continued growth and penetration in the SMB sector.
* Microsoft Live Meeting, while continuing to saturate the market, is declining in terms of revenue share, partly due to its aggressive pricing and bundling. But while Microsoft has lost revenue share in the hosted market, it's gained a significant footprint in the premises-based market thanks to good momentum for OCS.
* All global vendors with the exception of InterCall have lower market shares in Europe relative to their worldwide market shares. Both Citrix Online and Cisco WebEx have reported stronger growth in Europe in 2009.
* The web conferencing market continues to see ongoing consolidation, a trend we expect to continue for the foreseeable future.
