No Jitter is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Not Your Grandfather's Video Conferencing Industry Anymore: Page 2 of 2

Continued from Page 1

A Quick Look at Some Available Data

At Recon Research, our database includes 18 vendors that supply group video systems, five suppliers of video infrastructure gear, and 10 specialized video conferencing service providers, many of whose services are resold by numerous channel partners and integrators. In addition, as mentioned above, numerous UCaaS vendors provide video conferencing as a feature of their basic service. Of these 33 or so vendors, only four provide publicly available data, and only one provides us with data -- and then only under a non-disclosure agreement. So we don't claim that the following is representative of the overall market, but the four vendors are no doubt among the most significant.

  • Cisco: Endpoint revenues have grown at a rate higher than that for units, indicating a rising average selling price (ASP) both worldwide and in our North America breakout. Since system prices have generally been steady or declining, the change is more likely due to a product mix shift as the company has introduced several innovative and sexy room systems. Infrastructure revenues are on the decline, a continuation of a long-term (but not monotonic) trend.

  • Polycom: Endpoint revenues have grown at a rate lower than that for units, again more likely to a product mix shift than to anything else. Note that for both Polycom and Cisco, growth overall is positive, a factor that is often lost in the fog surrounding personal systems and VCaaS subscriber news. Polycom's ASP for room systems is significantly below that of Cisco. Polycom's infrastructure revenues continue their overall decline, although the change reported in North America is little more than a rounding error.
  • Huawei: While this company does near zero business in North America, it has a strong presence elsewhere and in fact is larger than Polycom from a room systems revenue perspective. Nevertheless, video conferencing overall is almost a rounding error in the company's overall financial picture. A surprising fact to many observers is that Huawei's ASP is the highest of the three leading vendors. Like Cisco and Polycom, the company's infrastructure business is on the decline, although at a slower pace.
  • Logitech: This company doesn't make stand-alone video conferencing systems (at least not yet). Rather, Logitech focuses on group add-on products that make computers more suitable for conference room communications systems. Logitech has moved steadily upmarket over the past three years, from sophisticated webcams to pan-tilt-zoom cameras and all-in-one audio video peripherals for small and medium meeting spaces. The company reports its revenues in nine categories, one being "visual collaboration," which excludes webcams. The growth rate for Q2 supports our conclusion below.

Conclusions

Visual communications is exploding; the market is shifting from room- to personal-focused, but at the same time the market for room systems isn't going away any time soon as companies deploy more collaboration-enabled small meeting rooms. Based on data from Logitech and anecdotal data from others, the market for audio-video communications peripherals is exploding. The infrastructure market, on the other hand, has shifted from hardware to software and from CPE to services of various types, leading to an overall decline in reported revenues but huge increases in the number of users.

The bottom line: putting a specific number on the size of today's video conferencing market is an exercise in futility.

Andrew W. Davis is a contributing analyst with Recon Research, and an amateur historian focusing on the video conferencing industry from 1945 to the present day.