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Video Conferencing Infrastructure: Time for the Old Business Model to Die

Enterprise video conferencing has been around for 30 years, traditionally sold in the business model established long ago as Marco Polo carried oils to China -- purchase the product and pay the seller upfront, then buy a monthly maintenance contract. But change is underway.

The traditional video conferencing sales model was universal, covering both video endpoints and video infrastructure, whether hardware or software. The approach made budgeting easy, since costs were known and generally fixed. But the high cost of video infrastructure combined with an enterprise's uncertain future capacity requirements could lead to difficulties. Exacerbating the capacity-planning challenge for enterprises was the problem that video infrastructure traditionally shipped in quantized formats. If a company found that usage exceeded the capacity of its 16-port MCU by a port or two, it would be forced to buy an additional eight or 16 ports, or even invest in a chassis upgrade, depending on the specific hardware vendor. Alternatively, many enterprises found themselves buying a 24-port MCU from the start even when 16 ports appeared to be sufficient.

In the past two years, however, multiple video conferencing vendors have addressed the cost, flexibility, and business models associated with infrastructure products. They've tackled these in three independent developments.

The problem is that despite the hype, nobody is really buying the story. Large enterprises, it turns out, are comfortable with the buying model and fixed budget certainties from the good old days. And small enterprises don't buy video infrastructure, period; they look to cloud offerings, including many that are now free.

But it is time to rethink those strategies and take advantage of the new technologies and market options available for video infrastructure. This rethink is a necessity as enterprises face a future in which hundreds of traditional room systems are being augmented with thousands or tens of thousands of personal and mobile video endpoints. With traditional room systems, the industry ratio for MCU ports to endpoints was typically 1:4; for huddle rooms and personal video, the ratio is likely to vary from 1:20 to 1:400, depending on the company.

Uncertainty reigns. Flexibility is therefore the key. Fortunately, enterprises can now buy both premises-based infrastructure and cloud services via business models that meet this need. It is high time for enterprises to make the switch away from the traditional business model to a new one.

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