Friday, May 6, 2011

Business spending on video conferencing to hit $804 million in 2016

MELBOURNE, AUSTRALIA: Asia-Pacific business spending on video conferencing will reach $804 million in 2016 (21 per cent of global video conferencing spend), driven by an increasing focus on cost-cutting and productivity, according to Ovum.

In a new forecast and report, the independent telecoms analyst predicts that Asia-Pacific revenues from business video conferencing will grow at a CAGR of 7.84 per cent from 2011 to 2016, significantly faster than the global CAGR of 5.79 per cent. The two major growth markets in the region will be India and China, each with over 16 per cent annual growth over the next five years.

Business spending on immersive video conferencing, often called telepresence – high-end video conferencing carried out in custom-built rooms where participants can see each other in life-size images – will grow even faster.

Ovum predicts that telepresence will grow at a CAGR of 21.89 per cent over the same five-year period to become a $226million market in 2016 in Asia-Pacific. Major orders for telepresence have already been signed by many global organisations, including HSBC, GlaxoSmithKline and News Corporation, whose executives are using the technology for highly interactive meetings as a replacement for traveling to face-to-face meetings.

Richard Thurston, Ovum analyst and author of the report, commented: “Enterprises are seizing the huge opportunity that video conferencing offers them to cut costs and improve productivity by reducing business travel. They are starting to use video conferencing much more frequently because of ongoing economic concerns, continued efforts to reduce their carbon footprint, enhancements in video technology and price reductions that are improving the business case. The next five years will see solid increases in expenditure from businesses in Asia-Pacific, partly because of their already high expenditure on long-distance air travel.”

“The improved quality of telepresence in terms of both visual and audio quality is resonating strongly with many large businesses,” continued Thurston. “But these systems are complex to manage, and we forecast that businesses will opt for third-party managed services from operators, systems integrators and equipment vendors to help them with their telepresence installations.” Accordingly, Ovum’s forecast shows that business spending on managed services will increase at a CAGR of 13.5per cent from 2011 to 2016 in Asia-Pacific.

But Thurston issued a note of caution to suppliers. “Operators and vendors must not forget to assist customers to prove the business case for video conferencing. One offering will not suit all businesses, and some businesses will experience longer payback times than others for their video conferencing investments. Technical features must be left for a second conversation.”

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