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Video Conferencing Services to See Double-Digit Growth

November 28, 2011 | Hogan Keyser
November 27, 2011 by Melanie Turek via NoJitter.com -- The growing complexity in troubleshooting video issues is compelling larger enterprises to get extra support for videoconferencing via a managed service offering.

My colleague Ronald Gruia recently completed Frost & Sullivan's latest research on the video conferencing services market. The full study will be available soon to clients at www.frost.com. In the meantime, here are some highlights.

Although it's still at an early stage of maturity--thanks mostly to issues around interoperability and relatively high costs--the market grew at a rate of 19.5 percent in 2010, reaching $225.6 million in total revenues. Between 2010 and 2015, the videoconferencing services market is expected to grow at a compound annual growth rate (CAGR) of 19 percent to $538.2 million.

That growth was fueled mainly by managed services, which continue to be the sweet spot for hosted video services. The growing complexity in troubleshooting video issues is compelling larger enterprises to get extra support for videoconferencing via a managed service offering. Managed services are expected to increase from $150.5 million in 2010 to $374.1 million in 2015, at a CAGR of 20 percent, as cultural barriers to managed offerings diminish over time. Telepresence will grow as a driver for the managed videoconferencing services market, with its contribution going up from 9.5 percent in 2010 to 44.3 percent in 2015.

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