I was working a client webinar two weeks ago when Frost & Sullivan presented their view of the web conferencing market. I've been waiting for the recording to be posted and for a notification. It finally got here and I gave it a listen.
Melanie Turek is a principal analyst with F&S. She covers "real-time communications, collaboration, and content-management technologies." Good enough. Most of the information in the first part of her seminar was pretty standard stuff, well-known to anybody involved enough with the technology to want to be reading this blog! Melanie pointed out the pain points in business of getting remote and virtual workers connected, reducing travel, etc.
She made the distinction between one-to-many seminars and more collaborative workgroup meetings in the field of web conferencing. As we know, collaborative meetings are getting the bulk of attention from press and technologists right now and it's the hot growth area in this space. I'm a bit disappointed that there isn't more attention being paid to formal public events software. The number of vendors that can handle a big scheduled event is much smaller than the rapidly escalating number of folks trying to quickly get in on the collaborative meeting space. The latter is much easier to build from an interface and functionality perspective. There is a definite market for improvements in integrated scheduling of large events, payment processing, registrant management, and in-session interactions built for one-to-many audience structures. But Melanie didn't go into that aspect.
She pointed to a shift in purchasing priorities for enterprise customers over the last four years. Circa 2002, the priorities were roughly price, product, then solution. Today she says companies are examining software purchases from a solution standpoint first, then looking at price, and finally product/company aspects. Because of this, the web collaboration market is rapidly commoditizing, since they solve the same solution in mostly the same way, leaving price as the key differentiator. And nobody much cares about the company or product stability much. Which is a pity if you've had to deal with certain vendors' tech support lines!
The latter part of the presentation got into more interesting specifics. Melanie says Frost & Sullivan projects a compound growth rate of 26% for web conferencing revenues between 2005 and 2011, from approximately $700 million to $2.8 billion. Wonder why there are so many little vendors jumping in with their new offerings?
Melanie emphasized her belief in the growing importance and acceptance of on-site licensed software installations (as opposed to hosted "Software as a Service" models). This opens up more unrestricted use of the software as a basic business tool throughout the enterprise, without having to worry about incremental usage-based charges. In response to a listener question, she pointed out that even in hosted models, flat rate pricing is going to rule... getting cheaper and cheaper from competitive pressures such as the recent Citrix GoToWebinar offering.
Someone asked why WebEx seems to have done so well in the market to date and she pointed out that they put a lot of effort and money into early marketplace education and marketing. Their hosted charge-per-use model made it easy for people to try it out on a one-shot basis, getting a foot into the enterprise. She said even the other vendors she talks to say "Thank goodness for the work WebEx has already done in the market!"
Poor ON24 was the vendor used to deliver the webcast and never once got mentioned in the list of vendors that Melanie used in her examples. Someone finally typed in "What software are you using today?" and Melanie gave ON24 a mention. I'm guessing the questioner worked for the company and put in the question out of sheer frustration!
One thing Melanie brought up that I found fascinating was the idea of cross-vendor communication standards so that a business user with WebEx on their desktop could meet with another business partner using Microsoft (for example). This may become more important if IT departments start controlling in-house use of communications applications and refuse to allow you to do impromptu installations of competing programs in order to attend a meeting. But I honestly don't see it as a practical necessity. Especially given the growth of download-free clients that are completely browser-based. It won't matter which software you normally use... When you attend someone else's meeting, you use their interface and when you host a meeting, they use yours.
When asked about Wireless and PDA devices as platforms for web conferencing, Melanie showed only mild interest. The device windows are just too small for practical use as a viewing or presenting platform for a meeting of any reasonable length or complexity. Obviously there are some applications where they would do just fine. For instance, those awful presentations where the speaker simply reads off the bullet points on his slide verbatim. No need to look at your screen for those!
Melanie also made reference to the growth of unified communications (mentioning Microsoft several times as the leading proponent of this technology niche). She said that Frost & Sullivan is about to break out unified communications/collaboration as its own market segment, separate from stand-alone web conferencing solutions.
There's obviously more information in the full presentation. You can view it through the hosted link until December 28.
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