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"We Will Not Dance with Who Brung Us" (Translation) Videoconferencing Market Growth Will Not Benefit Current Players...
April 6, 2012 | Hogan Keyser
But that is not the way it works in real life or in the marketplace of life. In the marketplace of life, when the marketplace really takes off, I mean really, really, really takes off, rarely do the early players and pioneers reap the benefits. So it is with videoconferencing... (Oops... now called visual communications and collaboration applications).
This market, about to explode, seems to be leaving some of the old leaders (companies and individuals) behind. I wish it were not so, but at my age, I have learned NOT to try and change the laws of nature or economics.
So hello Vidyo, Fuzebox, AppCore, Vcopious, Vidtel, Blue Jeans Networks, Sales Crunch, Vaddio, Tango, Connexus and others. Goodbye Polycom, LifeSize and Radvision. It seems you have or will soon join other industry pioneers like PictureTel, CLI and Accord Networks that helped define and develop the industry, but are no longer a part of the landscape.
But what about Cisco, Microsoft, and Logitech you might ask? Well, here is the thing...to Microsoft, Cisco, and Logitech, videoconferencing (excuse me visual collaboration and communications) is not an industry, it is simply one more application. They have lots and lots of applications to offer. And Cisco knows that (in the short term) every $1.00 of worth of videoconferencing needs another $3.00 of network.
If you had not noticed, Polycom is the very last independent hardware based videoconferencing player in the marketplace, and they are slipping very, very fast.
Today you can purchase HD desktop Vidyo (software based) conferencing services for $60.00 a year from Connexus, and then add a Logitech PTZ Conference Camera for $250.00 to facilitate group videoconferencing. Who needs a $7000-$10,000 hardware end point and even more expensive MCU? And if we add Vidtel's (or BJN'S) "any to any" MCU capabilities for less than 25 cents a minute to our Vidyo offering with a Logitech BCC950 ConferenceCam, we have then equipped our very low cost group system (via the cloud) to talk to the 20 billion mobile end points (the number predicted by Forrester by 2020) along with Skype, Google and all the others.
So who benefits from this market growth predicted to be as large $17B by 2017? (Global Industry Analysts forecast) Who will reap the benefits of the 20-26% growth predicted by the various analysts?
Unfortunately economic laws and history tell us that the companies and individuals that will reap the benefits of our explosive growth will be companies and individuals that come from outside the market; and in our circumstance, the new companies and individuals will most probably come from the digital development and applications side of the business. The new companies that will reap the benefits of our growth will not even recall names like PictureTel or Videoserver, nor will they care that Polycom was the last independent hardware based videoconferencing company in the industry.
The new digital developers in videoconferencing just see one more application, 20 billion mobile end points, and issues such as, ubiquity, convergence, security, and complexity, as extraordinary opportunities. And these new digital developers are finding ways to connect with the current market momentum while also choosing to be unconcerned about "old" historical issues such as interoperability. They believe, and rightly so, that the cloud will address that and any other roadblocks to universal availability and ubiquity.
So, excluding the momentum still enjoyed by the managed service providers and integrators such as AVI-SPL, IVCI, GBH, and a few others (some analysts say 50% of the current growth is in this area), we see a whole new set of dance partners coming into the industry, I mean, application. They are application focused with cloud based vision. And, for the most part, they are not coming out of our "industry".
However, if we (those of us with a history and investment in videoconferencing), want to be a part of the future growth and momentum forecasted for our industry, we may want to search out some of these new dance partners. We will not be able to dance with who brung us. Those folks are no longer at the dance.
About the Author
J D Vaughn is an author, writer, industry analyst and Principal and Founder of J D Vaughn Consulting. Most of his "hands on" work in the technology industry is to help firms accelerate growth through acquisition and focused organic business development. His clients also ask him to rapidly build revenues through distribution and unique business partnerships. He has been called upon to organize and or reorganize companies and departments to higher levels of productivity while also planning and executing plans for stakeholders' equity growth and timely and profitable exit strategies.
Educated at California Polytechnic State University and the Pepperdine Graduate School of Business, Mr. Vaughn captured significant experience working as a business consultant with Eli Lilly, General Mills, Ralston Purina, Kraft Foods, Safeway and Construction Materials Suppliers. In the 1990s he began working with "high risk-high return" startup companies and participated in two very profitable IPOs.
Reprinted from the April 2012 issue of Electronic TeleSpan, with permission.
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