Overview of the Videoconferencing Systems Market

Modern business communications are increasingly moving away from personal meetings to remote methods of interaction, and this trend applies to all sectors of the economy. Modern technical solutions support high-quality communication (sound and video transmission) and data exchange among a fairly large number of parties. One example of such solutions are video conferencing (VC) systems.

When they first emerged and to this day, the chief business advantages of VC systems have been the improved manageability of branches and subsidiaries, optimization of business processes and decision-making procedures, improved internal corporate communications, and travel expense savings.

VC Evolution History

VC emerged as a cross of TV technology and data transmission in the 1960s. The first videophone (called a “picturephone”) was unveiled by AT&T in 1964. Toward the end of the 1970s, the first more or less fully-functional video conferencing systems appeared (Ericsson marketed the first videophone), which did a pretty good job transmitting audio-visual information by the standards of the time.

In 1976, the Network Voice Protocol (NVP) technology of packet data transmission was presented. It was an early example of the Voice over Internet Protocol (VoIP) technology. At this stage, the primary video conferencing technology involved transmission of voice and video over an analog public switched telephone network (PSTN). At that time, video conferencing solutions were expensive and cumbersome, which limited their commercial applications.

In 1981, a video protocol (PVP) entered the market, and the first IBM PC-based videoconferencing solution appeared in 1991. In 1990, the first international video conferencing standard was approved. Called H.320, it supported video conferencing over the ISDN (Integrated Services Digital Network). During this period, the primary video conferencing technology was image compression, which helped improve the quality and speed of image transmission via broadband networks. With the release of the updated Windows-compatible CU-SeeMe application (an Internet video conferencing client), VC became available to all PC users.

The VC technology entered a new stage of development in the early 2000s. Video conferencing bifurcated into two major product lines: hardware and software. It was then that Samsung released the first cellular videophone, while Skype and iChat marketed the relevant software. In 2005, Lifesize introduced the first high-definition video conferencing solution.

When the corporate market for VC solutions first emerged, sessions between VC terminals happened via ISDN lines. Video conferencing over IP networks (H.323 standard) eventually became increasingly more popular. Continued technological progress led to an avalanche-like growth of both solutions and equipment offered by vendors. The launch of 3G and 4G communication standards has opened up tremendous opportunities for the development of mobile solutions and cloud-powered VC products.

Global market for VC systems

The VC technology is currently experiencing big changes. The VC segment is growing primarily at the household level (in terms of cloud services such as Skype, FaceTime, Google Hangouts, etc.), while video communication is getting integrated into an ever increasing number of applications and services.

Analysts expect market growth to continue. According a Transparency Market Research study, the global market for VC services was estimated at $5 billion in 2016. It is expected to grow at an average annual rate of 7.9% in 2018–2026 to reach $10.5 billion by the end of this period. The company Research and Markets also estimated the size of the global VC market at $5 in 2017 and predicted the average annual growth rate at 8.6% in 2017–2025. The growing number of VC solutions in health care and education has fueled the global demand for corporate video conferencing.

In September 2018, the analytical firm Gartner published the Magic Quadrant of corporate video conferencing systems. Cisco, Zооm, Microsoft, and LogMeIn were pegged as market leaders by Gartner (Cisco, Zооm, and Microsoft were named as leaders in 2017). BlueJeans and Vidyo were ranked as “visionaries”, and Google and Adobe as “challengers”. Compared to the Magic Quadrant 2017, ZTE, West, and Polycom left it in 2018.


Gartner's Magic Quadrant for VC systems as of August 2018

Meanwhile, the research company IDC named Cisco and Microsoft as VC market leaders in its July 2018 study. Google, Zооm, BlueJeans, Vidyo, Avaya, Lifesize, Huawei, and Polycom were named as major market players.


Key players in the VC market as of July 2018 (IDC estimate)

According to MZA estimates, the three largest suppliers of VC endpoint solutions (Cisco, Polycom, and Huawei) were leaders in the VC market in 2017, just like in previous years. Together they account for more than 70% of the revenue stream and almost 70% of the market volume. Although the number of new market players is growing rapidly, these heavyweights continue to dominate the market and have actually increased their collective market share compared from 2016.



Market shares of the key VC endpoint market operators in 2017 (MZA estimate)
Frost & Sullivan has highlighted the following trends in the global VC market in its study.

1. Unified solutions. Users expect vendors to offer integrated solutions for video conferencing and collaboration that will include the actual system components (digital signatures, conference room solutions, software clients, projectors, and other peripherals) and solutions for monitoring and managing them.

2. Extensive integration capabilities. VC solutions will offer ever greater capabilities for integration and interaction with other electronic devices, applications, and video conferencing systems.

3. Cloud-powered VC solutions. Users will prefer such solutions due to lower costs, high scalability, and ease of deployment.

4. Artificial intelligence (AI) technology. With the help of big data and the Internet-of-Things (IoT), AI technology can be used also in video conferencing. For example, the Internet and an IoT device can be used to automatically update and synchronize new functions to improve communication quality.

A brief overview of VC products follows below. More information about their features is available in the VC products comparison table at ROI4CIO

Cisco (Cisco Webex)

Cisco is an American multinational company that develops and markets server, network, and telecom equipment. The company entered the VC market as a player to be reckoned with by acquiring a leader in the video conferencing industry (Tandberg) for $3 billion in 2009. The company has only reinforced its positions since then. According to Gartner and IDC estimates, Cіsco ranked among the leaders of the VC market in 2018. Cisco's video conferencing products include Cisco Webex and Cisco Webex Meeting Server.

Cisco Webex is a cloud service for web conferences with up to 1,000 participants (and online broadcasts for up to 100,000 participants). The product is commercial, but a free trial period is available.

Cisco Webex users get the full range of services required for corporate video conferencing: a multilingual interface, high-quality video and sound, text chat, end-to-end encryption, mobile applications on popular platforms, integration with office applications, instant messengers and VC solutions by third-party vendors, remote desktop management, keyboard and mouse, whiteboard (virtual collaboration board), as well as the capability to conduct participant polls, record meetings to a local computer or in the cloud, brand web meetings, and integrate the solution with CRM systems, generate statistics, reports, etc. Cisco Webex is best suited for commercial events and corporate trainings. To this end, the service supports integration with training management systems.

The service is also available as part of the Cisco Webex Meetings Server solution that can be rolled out in the corporate IT infrastructure. The platform supports up to 96 simultaneous sessions in HD format. It can be used to connect to calls via the VC system in the conference room, desktop video terminals, a mobile client, a WebRTC compatible browser or Skype for Business.



Cisco Webex service dialog box

Microsoft (Skype for Business)

Microsoft is one of the undisputed leaders in the VC market, as evidenced by Gartner and IDC estimates for 2018. The history of Microsoft in the VC market began in 2011 following the acquisition of Skype for $8.5 billion. Prior to that, the company had been developing Microsoft Lync (and before it, Microsoft Communicator). However, in April 2015 the company released a new version of Lync and renamed it Skype for Business with the Skype interface. Microsoft may soon shut down Skype for Business in favor of Microsoft Teams (part of Office 365).

Microsoft Teams is a corporate platform unveiled in late 2016. It combines chat, meetings, notes and attachments, voice and video calls in the workspace. The platform was developed as a rival of the corporate solution Slack. It runs under iOS, Android and Windows 10 Mobile, as well as on Windows and MacOS computers.

Skype for Business is different from Skype for home users in that it offers advanced functionality and charges a subscription fee. Skype is suitable for video conferences in small companies, while Skype for Business with its pay-for options allows holding meetings for up to 250 participants with enterprise-level security.

The selection of Skype for Business features is fairly similar to the functionality of equivalent cloud-based products: voice and video calls, messaging, availability on all popular desktop and mobile platforms (plus the ability to access video conferences via a browser without installing a software client), recording of conversations, desktop sharing, and collaboration on a virtual whiteboard. However, it does not offer video conferencing branding capability.

The fact that it's a Microsoft product gives Skype for Business all the benefits of integration with Office products: you can schedule a meeting in Outlook and create it directly from Word or PowerPoint.

The server end - Skype for Business Server (marketed in 2015 and previously known as Microsoft Lync Server) - offers all of the VC functionality based on in-house servers and allows distributing users depending on their communication requirements (split domain).



Skype for Business dialog box

Zoom (Zoom Meetings)

Zoom is an American company that provides remote conferencing services using cloud computing. In 2017-2018, Gartner recognized Zoom as the leader of the VC market. IDC named it a major player in 2018.

Zoom offers the following solutions for video conferencing, online meetings, and group chats: Video Webinar, Meetings, and Conference Room. They are powered by SaaS cloud solutions and hybrid solutions.

Zoom Meetings video conferencing offers several rate plans (a free lite version is also available). Sessions support up to 200 participants (up to 500 people for an extra fee). It runs on Mac, Windows, Linux, Chromebook, iOS, and Android systems and is compatible with Outlook, Office 365, and Gmail. The service offers all the traditional options: video call encryption, collaborating on documents and a virtual whiteboard, polls, desktop sharing, meeting attendance statistics, branding capability, participant vigilance monitoring, video recording, and audio transcription.

Zoom Meeting dialog box

LogMeIn (GoToMeeting)

LogMeIn is a provider of SaaS solutions and cloud-based remote communication services for collaboration, IT infrastructure management, and customer interaction. According to Gartner, LogMeIn is among the leaders of the VC market in 2018, having offered innovative services, in-depth analytics, speech and text transcription, and integration with smart assistants such as Amazon Alexa.

Among the key LogMeIn products for online meetings are GoToTraining, GoToMeeting, GoToConference, GoToWebinar, and Join.me (a freemium service for online meetings and collaboration).

We will focus on the GoToMeeting service designed for video conferencing and various online meetings with up to 250 participants (under the most expensive rate plan). Like many similar products, GoToMeeting is quite easy to use, runs under Windows, Mac, and Linux systems and all popular mobile platforms, and is compatible with MS Office and Google Calendar.

The service is available under free and pay-for rate plans and offers application sharing and document collaboration, recording of meetings in the cloud or on a local computer with the ability to transcribe the recording, monitor participant vigilance, conduct polls, generate meeting statistics, share the keyboard, mouse or desktop, and brand online meetings.

LogMeIn is a provider of SaaS solutions and cloud-based remote communication services for collaboration, IT infrastructure management, and customer interaction. According to Gartner, LogMeIn is among the leaders of the VC market in 2018, having offered innovative services, in-depth analytics, speech and text transcription, and integration with smart assistants such as Amazon Alexa.

Among the key LogMeIn products for online meetings are GoToTraining, GoToMeeting, GoToConference, GoToWebinar, and Join.me (a freemium service for online meetings and collaboration).

We will focus on the GoToMeeting service designed for video conferencing and various online meetings with up to 250 participants (under the most expensive rate plan). Like many similar products, GoToMeeting is quite easy to use, runs under Windows, Mac, and Linux systems and all popular mobile platforms, and is compatible with MS Office and Google Calendar.

The service is available under free and pay-for rate plans and offers application sharing and document collaboration, recording of meetings in the cloud or on a local computer with the ability to transcribe the recording, monitor participant vigilance, conduct polls, generate meeting statistics, share the keyboard, mouse or desktop, and brand online meetings.



GoToMeeting administration pane

Google (Hangouts)

In its 2018, IDC named Google a major player in the VC market. In the 2018 Magic Quadrant, Google appears as one of the “challengers”. This group includes companies with operational excellence and a strong reputation.

Google online meeting solutions include Hangouts Meet and Hangouts Chat. Like many similar cloud products, Hangouts features ease of use, compatibility with any operating system and browser (correspondence is synchronized across all devices), etc. The advantages of Google products include their compatibility with other products of the corporation (Gmail, Google Drive, etc.) and automatic publication of the recording on YouTube.

In the advanced corporate version of Hangouts (G Suite pay-for packages), users can record conversations and conduct live broadcast events that can be watched by up to 100,000 viewers. Corporate users can also participate in video calls even when there is no access to the Internet (using a special phone number with access through a PIN code). You need to understand, however, that the disadvantages of Hangouts are quite significant: there is no opportunity to conduct polls, generate statistics on sessions, hold pay-for webinars with integration with payment systems, brand video conferences, and collaborate on a virtual whiteboard.



Hangouts Meet settings panel

Conclusions

VC technologies are actively evolving and improving, creating not only new business opportunities but also new markets: telemedicine health care, remote corporate trainings, and distance learning.

Future evolution of VC systems will follow existing trends: the prevalence of demand for cloud services and mobile solutions, the use of high-definition video and new video codecs, integration with other information systems, applications, and services, growing demand for VaaS services (Video as a Service). The not so distant future of video conferencing is associated with the roll-out of augmented reality (AR) and virtual reality (VR) technologies as well as the 4K standard. For the time being, however, they face multiple technical obstacles associated posed by the challenges of high-speed data transmission.

It stands to mention that the majority of solutions available on the VC market in their respective categories have roughly the same functionality, with more advanced features naturally available in pay-for versions and truncated in free versions. At any rate, you can see the differences between the proposed VC solutions in the comparison table. 

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Author: Yuriy Grygorenko, for ROI4CIO