“The motto of the videoconferencing market has always been a bit like Only Fools and Horses: ‘this time next year, we’ll be millionaires’.”
Or so says Kerry Lees, business development manager at distributor Touchline Video, a 15-year veteran of the video space. But Lees is one of many to believe the technology’s time may finally have come.
Video has, to date, largely been the preserve of niche specialist players. But as end users look to collapse their supply chains and IT departments increasingly view video as a component of a wider unified communications (UC) deployment, the onus is on comms resellers, network integrators and generalist IT VARs to embrace video.
Michael Stephens, UK sales director at vendor LifeSize, predicted the UK video market could grow by 20 per cent this year. Vendor sales out will be in the region of $250m (£158m), with the total end user spend possibly surpassing £400m, he claimed.
“You are seeing a lot of [VARs] develop specialist video units; it is a great addition to what they are doing,” he added.
Lees agreed resellers from other areas in the communications arena are increasingly getting into technologies such as video-as-a-service.
“The lines have become blurred and we have got involved, in both a proactive and reactive way, with companies from the telephony and networking infrastructure markets,” he said. “But multi-screen telepresence solutions are still a specialist area. Most of the manufacturers require you to be a very skilled partner.”
Marcus Jewell (pictured, right), UK and Ireland country manager at Brocade, claimed “video is simply another network application” and that while the market is currently characterised by specialist video VARs, “more generic VARs are improving their skills and bridging the gap”.
“It feels to me that this is likely to follow the same trend as UC, where the great majority of VARs will ultimately be capable of providing fully integrated solutions,” he added.
Some of the larger integrators, including Logicalis and Dimension Data, have bought in video skills by acquiring specialists. Others have fostered partnerships with niche outfits.
Ian Vickerage, managing director of distributor Imago, said: “Only a small part of the channel has the necessary video, audio and networking skills to manage videoconferencing well, so the key is to partner with different resellers who have the skills.”
Graham Fry, managing director of videoconferencing specialist AVSolution, claimed his firm partners “with many traditional IT companies” that may “lack the specialist knowledge for deploying video professionally”.
“The common myth is that videoconferencing provides a massive ROI,” he said. “This is only true when it is deployed in a way that correctly drives adoption. Many inexperienced companies let customers down by deploying video as though it is a commodity.”
James Baly, technical director at network support services outfit Nowcomm, agreed that partnerships between networking and audio-visual (AV) firms are on the increase. He argued that both sides of the divide require the discrete skills the other brings.
“When it comes to IP, many of the traditional AV resellers lack the in-depth knowledge required to optimise the network for video, voice and the other business applications,” explained Baly.
Room for growth
The rise of applications such as Skype and FaceTime has given consumers a taste for video communications.
Rufus Grig, chief technology officer at integrator Azzurri, opined that the increased ubiquity of video communications in people’s personal lives “will ultimately be what drives” the market. But meeting room-centric deployments are still the bread and butter for resellers, he said.
“[We are seeing demand for] meeting room, and desktop-to-meeting room. But we are really not seeing a lot of interest in desktop-to-desktop.”
Imago boss Vickerage and Peter Hannah, unified communications business unit director at Avnet Technology Solutions, asserted that desktop video sales are beginning to burgeon.
“Due to a lack of confidence in running a number of remote users across VPNs, room-based systems are still the majority of the solutions,” said Hannah.
“However, as estates become more dispersed and the number of remote users increases, organisations are having to invest in better infrastructure to support increasing connectivity, including desktop-based video.”
Acquisitions and Asian adversaries rock landscape
With big-name comms vendors closing video-focused acquisitions and a clutch of Asian manufacturers looking at western expansion, the top-heavy vendor landscape could be set for a big shake-up in the coming months.
Cisco remains dominant, with a market share of well over 50 per cent. Richard Roberts, leader of the vendor's UK and Ireland partner organisation, claimed recently that video would be one of his top priorities for the UK channel in 2012.
Since then the firm has strengthened its video credentials with the $5bn (£3.2bn) acquisition of UK software vendor NDS.
"Video is no longer just a consumer technology, it is finally mainstream," said Roberts. "Video devices are available in abundance and the mix between having devices with video built in and the acceptance of video in the workplace is increasing the appetite."
Between Cisco and challengers-in-chief LifeSize and Polycom, the big three video vendors account for 90 per cent or more of the video market, according to onlookers.
Michael Stephens, UK sales director at LifeSize, asserted that "the three of us are taking the market by storm", but that there may still be room for select niche players. Stephens was also unconcerned by any possible effect that Avaya's $230m acquisition of Radvision may have on partners, such as LifeSize or Polycom.
"I do not think it complicates things," he said. "The acquisition reinforces the fact that [if you are] a major UC vendor, you have to have a video play."
Nigel Moulton, EMEA director of product and solutions at Avaya, added: "The market will help us to understand the nature of our relationship with both Polycom and LifeSize."
Moulton claimed that the pervasion of video into the wider UC market gives Avaya a great platform from which to compete against the big three firms.
"Any UC end point should be considered as a video-capable end point," he said. "Our ambition in that marketplace is huge."
Most people in the video space seem to agree that there is room for vendors outside the big three to make an impression.
James Baly, technical director at Nowcomm, claimed the big three have the room-based market sewn up, but singled out software-centric player Vidyo as "one to watch". Graham Fry, managing director of VAR AVSolution, also named Vidyo as a potential disruptor, saying "it will be very interesting to see how Avaya's acquisition of Radvision progresses".
Ian Vickerage , managing director of Imago, also chose Radvision and Vidyo as
"the two other riders", while picking out Huawei as "a dark horse".
Peter Hannah, business unit director at Avnet, said: "You can never rule out new players such as Bluejeans or Starleaf, and established vendors such as Microsoft, Huawei and Avaya are consolidating their market positions with a strong offering."
Distributor Touchline Video is bringing Chinese vendor ZTE to the UK market next month. Business development manager Kerry Lees said the manufacturer, alongside its compatriot Huawei, could really shake up the western market.
"It will have an impact on price points, but we do not want people to assume that, because they are Chinese, they will be cheap and cheerful," he said. "We are talking about serious players who can do everything from end to end."
LifeSize's Stephens added: "Anyone who discounts the Chinese players is playing a dangerous game. They have the potential to be extremely disruptive competitors."
Market set to shatter $3bn mark
Research from a brace of analysts has revealed the impressive growth posted by the videoconferencing market last year and predicted more of the same for 2012.
Numbers from Infonetics Research released this month claim the global video and telepresence market grew 15 per cent sequentially in Q4 to $882m (£556m). Across the whole of 2011, the analyst pegged year-on-year growth at 34 per cent, with total revenue stretching to $2.99bn.
Cisco remains a dominant market leader and the network giant saw its video revenue jump by a quarter in Q4. Its market share rose three points to 52.5 per cent in 2011's last three months.
IDC also gave the video space the thumbs-up this month, although the analyst calculates the total market worth as somewhat less than Infonetics. According to an IDC report, the enterprise video market was worth $2.7bn last year, a 20.6 per cent increase on 2010.
The market watcher believes global spending will spike 18.7 per cent to $3.2bn this year. Meanwhile, Infonetics forecasts a total of $22bn will be spent on video kit and services between this year and 2016.
The IDC report suggests that lower-end, desktop video was driving growth last year. Growth in spending on immersive telepresence slowed by 22 per cent in 2011, with the total market worth a little more than $315m.
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