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Where's The Puck Going In Enterprise Videoconferencing?

December 14, 2011 | Hogan Keyser
December 12, 2011 by Chad Bernston via -- It used to be that video-focused solution providers could depend on A/V integration, video endpoint resale and infrastructure to keep their growth steady. Video, as a market, has always been long on promise but relatively short on enterprise business adoption, and the A/V integration specialists and endpoint resellers basically had the opportunity to themselves.

Those days are over. Swelling is the number of VARs, particularly those focused on unified communications, that can access and provide video solutions effectively, and that's not even counting the major telecoms and service providers that are using their breadth and influence to sell video and unified communications to their customers.

With a market that has continued to consolidate -- Cisco's 2009 acquisition of Tandberg being the standout example -- solution providers left and right are simply having to rethink how they're going to make money off of video solutions down the road.

"Selling hardware is no longer as profitable as it was, and yes, we expect it to get harder," said Ira Weinstein, senior analyst and partner at Wainhouse Research, which closely follows the video, A/V and unified communications segments. "Cisco (NSDQ:CSCO) came in and those guys live on high volume sales with low margins. This is having an impact in the industry. Margins on hardware are down, down, down, and some resellers are walking away from deals if it's only hardware. Hardware is a small profit."

The growing consensus for how solution providers will preserve their lucrative video returns rests on managed services and advanced video integration. In other words, VARs that can manage infrastructure, drive videoconferencing usage and align video resources so that disparate video systems can "talk" to one another -- and realize that long-held ideal of making a video call as easy as voice call -- are in increasingly high demand.

"The thing that keeps coming up is interoperability," said Marielle Crisanti, product marketing manager for communications solutions at Matrix Video Communications, a Calgary-based solution provider. "The actual physical products we're selling are aren't as important as the services we can offer."

Video-focused vendors both startup and veteran are now attempting to home in on the interoperability and ease-of-use pain points for customers. One fast-rising upstart is Blue Jeans Network, a two-year-old company that emerged from stealth mode this past summer with commercial availability of its Any(Ware) videoconferencing service.

The hook for Blue Jeans Network is a platform that provides a cloud-based video "meeting room" from which users can host, schedule and manage their own videoconferences via a Web interface. What's crucial, however, is that the Blue Jeans service can bridge any number of different video and audio protocols for as many as 10 participants, meaning users of Cisco's high-end Telepresence can easily connect into meetings with users of LifeSize, Polycom or Vidyo endpoints. Or Skype or other low-end clients. Or the PSTN.

Stu Aaron, Blue Jeans Networks' chief commercial officer, says the value of Blue Jeans is in that interoperability. Video calls, Bluthe company maintains, will see adoption based on how easy they are for a business user to launch.

"Imagine if you had to do a traditional audioconference and you had to know what type of phone the other person had," Aaron told CRN earlier this year. "It's preposterous, but it's the way that video has always been."

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