One of our members asked me recently about the direction and future of video conferencing as we know it today and where I see that all headed. To better answer his question I did some collaboration with two of this industry’s leading experts to see if we shared opinions, or had vastly different perspectives. Our vision was quite similar and I liked to summarize this.
Here’s the actual question: I’m wondering if you could help integrators understand the directions that video-conferencing is going and likely to go in the future. We’re trying to figure out where the technology is going (cloud-based, hardware-based, etc.), and to understand where we should be placing our bets. Is it too early to know what direction things are going to go?
I really think this is a terrific question, one that needs well thought out responses. So here are some conclusions that my friends and I came up with that we can share.
The cloud offerings are getting very interesting especially when coupled with today’s IT buzz acronym BYOD (Bring Your Own Device). It makes video collaboration easier and therefore more ubiquitous. I personally believe the peak of large dollar CODEC’s has been reached as the bottom part of the market improves its offerings. Video-conferencing (VC) is no longer out of reach to those who value its strategic significance and some of those same people will put up with a little less performance for a bargain that allows them to participate as long as the bargain is reasonably reliable.
The integrator still has a role and that will continue for some time. People still get together in a room and meet. It is how we as humans interact. And those people often need to bring in another person or group of other people from the outside to the meeting…. hence, VC and the AV meeting space. The easier and more flexible that the VC is to use, the more rapid it will be adopted by an organization- which in turn will continue to drive more AV-enabled meeting spaces. I still see the traditional CODEC in the space for the next few years but there will come a time when VC is simply driven by a specific web server in a DSP somewhere in the food chain. I believe the next growth area in VC is in providing private video networks.
Video communications has already become mission critical in many organizations. Additionally, it is moving beyond the conference room (note “beyond”) to the office/remote office and on to portable devices ranging from tablets to cell phones. There are a host of enablers including bigger and faster wired/wireless networks, smarter more powerful personal devices, and the overall direction of the unified communications industry (IM, Voice, Video). End-users want to deliver video to more users for more business applications.
When we enabled cell phones and tablets to make/receive video calls we had already moved from a hardware-based solution to a software-based solution that runs on an application enabled device. It’s not difficult to envision the day when all of the support infrastructure (call control, resource scheduling, collaboration bridge, security) becomes software-based and resides on servers in the data center. A lot of this is already happening.
Back to the “cloud”. If you think about large enterprises the voice and video services is really private cloud serving one tenant – the enterprise. As things move towards software-based solutions you will see more public cloud features built-in, such as multi-tenant requirements, that is designed for shared resource cloud environments.
Now, back to the “beyond” reference… as the utilization of video becomes ubiquitous as described above the meeting room will not go away, video enablement will be a requirement in every sized room from a two person huddle room to the typical boardroom.
Wainhouse Research is forecasted continued growth in single-codec sale through 2016 (2012 Videoconferencing Endpoints & Infrastructure Market Sizing & 5-Year Forecast). As with most technology, once you hit mass market the ASP drops reducing the overall revenue growth percentage and that’s when your services business model will benefit the integrator organization.
So as an integrator; where do you place your bet? There is a lot of opportunity and uncertainty here. The more aggressive business strategies would be to focus on becoming some type of cloud service provider or resell a service by others. A little less aggressive approach would continue to keep on top of the new technology and focus on the user experience in the room. Both could have huge upside.
Is it too early to tell how the cloud influences the unified communications approach? Most likely, yes. Remember the margin is in the magic and where there is initial confusion, there is opportunity. There are those who build and maintain the networks and by virtue of their proximity and control they have first crack at things. However, there will always be need for subject matter experts on the user interface and physical installation and service side.