Special Focus
Gaining Ground
The economic slowdown coupled with falling prices of hardware and increasing broadband penetration is driving the videoconferencing market
By Sharmee Roy
One solutions segment that has in fact benefited from the tough economic climate is videoconferencing (VC).
“The current economic scenario is doing more good than harm to the VC market,” says Manish Dixit, Research Analyst, ICT Practice, Frost & Sullivan, South Asia and Middle East. “There is an increased awareness about VC and its intangible benefits. The cost cutting measures are in turn fuelling the growth of VC.”
According to Frost & Sullivan, the Indian VC end points market grew at 23 percent to $29.4 million in 2008.
Abhimanyu Gupta, Director, Actis Technologies believes, “The current market size for VC in India is about Rs 200 crore and expected to double over the next 12 to 18 months.”
Today, videoconferencing is moving beyond the corporate world. Government sector is readily implementing VC solutions in their SWAN networks, and e-Governance and judicial applications.
VC for education is also expected to kick off in a big way through e-Learning and distance learning programs. “Some premier institutes like IITs and IIMs are already offering their courses using VC solution. Segments such as tele-justice and tele-medicine are slowly emerging as potential users and are likely to invest more in the technology,” says Dixit.
Many organizations have realized that VC can improve teamwork, accelerate project turnaround and time to market, hasten decision-making, permit more selling in a shorter time period, eliminate certain sales and service calls, improve information-sharing and responsiveness, reduce sales cycles and contribute to more efficient business processes. It also promotes electronic communication, reduces paper usage, and thereby minimize a company’s carbon footprint.
Says Minhaj Zia, National Sales Manager, Unified Communications, Cisco India and Saarc, “Business and decision-making depend on the availability of information at the right time. In order to save time, meetings are increasingly being conducted over telecommunication networks via VC.”
Growing penetration of broadband is playing a critical role in advancing the adoption of VC, adds Zia.
Market segmentation
The VC market is divided into three segments. The high-end market is dominated by telepresence, the mid-market by executive VC systems and at the lower-end of the market are the desktop Web conferencing systems and videophones.
“Telepresence caters to deep-pocketed enterprises and is at an early growth stage in India. But the growth rate seen is over 100 percent. The C-level executives in large enterprises and government organizations are showing a lot of interest,” informs Dixit.
However, the cost of telepresence is prohibitive at about Rs 1.5 crore depending on the number of screens, types of solutions, and services bundled.
Zia says, “If the nature of business requires a lot of travel and collaboration among different locations and time zones, then telepresence can offer a more cost-effective alternative to bringing people together in the same room.”
Currently, a major chunk of the market comprises executive VC systems—priced around $4,000 for Standard Definition (SD) systems. On the other hand, desktop conferencing, which is primarily through video phones, cost around $800. With prices of SD systems expected to decline, the adoption of HD system is expected to increase.
Dixit believes that desktop systems will start gaining market share as IP technology is increasingly adopted by companies.
Vendor strategy
With the competition heating up, vendors are gearing up to make the most of the opportunity. Cisco, for instance has floated an aggressive financing program to make it easy for customers to invest in its VC solutions. Under a program called Progress Payments, a customer gets a credit of up to 120 days. “The customer has to start paying only after the solution is deployed and he starts using it. This allows the customer to conserve cash and pay for the solution when the cost saving benefits of that solution begin to be realized. Cisco Capital pays the partner that deploys VC solution up to 50 percent of the cost upfront and the remaining 50 percent after deployment, allowing him to install multiple sites, simultaneously, without worries about cash flow,” informs Zia.
Actis, on the other hand, follows one point strategy that is to demonstrate to businesses that the reason to adopt VC is not style but real, practical business solving ability.
Gupta says, “We try to demonstrate ways in which customers can leverage the power of video collaboration to solve diverse business challenges.” Actis soon plans to open concept centres to demonstrate video conferencing technologies to customers.
Challenges
Though VC solutions offer tangible and intangible benefits there are some major concerns that could act as a dampener. Zia says, “Factors like cost of ownership, maintenance of infrastructure, and the general perception about VC as an item of luxury could possibly impact growth.”
Yet another challenge is standardization, as most of these communication and collaboration technologies are proprietary platforms that do not integrate with competing technologies. “There are number of standards; different communications and conferencing technologies that reside on different networks and platforms, requiring different management interfaces for support,” Dixit opines.
At present, most of the enterprises connect via ISDN. However, Internet based connections are increasing and many public rooms have come up in India, which allow these conferencing over IP network. To ensure full benefits of videoconferencing, bandwidth issues at the backend also need to be addressed. |