Frost & Sullivan: Australian Videoconferencing Market Reports Healthy 33% Revenue Growth in 2010
Announcement posted by Frost & Sullivan 16 May 2011
Frost & Sullivan report estimates market revenues will more than triple by 2017
Sydney, 16 May 2011 - Government incentives and pent-up demand following the global financial crisis (GFC) helped the Australian video conferencing market to increase revenues by 33 per cent in 2010.
The market, which is defined as including sales of equipment for immersive telepresence, video conferencing endpoints and video conferencing infrastructure, but excluding maintenance and communications revenuesis expected to more than triple by 2017, growing at an estimated combined annual growth rate of 19.1%. The findings are included in Frost & Sullivan's latest research report, the Australian Videoconferencing Market Report 2011.
Government, banking and financial services, utilities and mining industries were the main vertical markets undertaking video conferencing deployments in 2010. Other areas of high demand included education, health care and professional services.
The strongest segment of the market was room-based systems, otherwise known as video conferencing endpoints, which accounted for 66.7% of all video conferencing revenues in 2010. Growth in demand is being driven by the increasing quality of these mid-range solutions combined with gradually declining price points, and a shift in customer preferences from immersive telepresence to room-based systems.
Video conferencing infrastructure also experienced a sharp increase in growth due to a rise in the number of video conferencing deployments. After 2009 being a year of delay, many businesses revived their video conferencing plans in 2010, creating demand for infrastructure to efficiently connect multiple parties in a conference.
At the high end of the market, immersive telepresence solutions recorded growth of 3%. This has gone some way to redress the steep decline in demand experienced during the GFC. The report suggests that although this segment will not witness widespread uptake, it will continue to serve a niche where the business requirements of specific customers justify the investment.
The players
Cisco's strategy following its acquisition of Tandberg was closely monitored by customers and the market in general. While Cisco maintained a majority of the Tandberg customer base, Polycom capitalised on the uncertainty and grew its market share in Australia. Both Cisco and Polycom recorded strong revenue growth over the previous year and together they accounted for the vast majority of the overall video conferencing market share in Australia.
Within the small-to-medium-business (SMB) category, LifeSize continues to be the most prominent vendor, reporting wins across the health and financial services vertical markets. A number of emerging vendors including Huawei and Vidyo are also beginning to generate interest in this market. However, the study cautions that while offering a huge base for video conferencing deployments, the SMB market remains a difficult segment in which to generate growth. High price sensitivity and a preference for free applications such as Skype present the main challenges for vendors in this area.
Telstra, Dimension Data and Optus-Alphawest continued to be the dominant channel partners, accounting for the majority of wins in 2010. While Telstra and Optus-Alphawest bring their expertise as carriers to offer bundled solutions, Dimension Data enjoys an advantage as a systems integrator able to handle large scale and complex projects.
As anticipated in last year's report, further channel partner consolidation occurred in 2011 with Telstra acquiring the key Tandberg channel, iVision. A traditionally strong Cisco channel, Telstra needed to quickly ramp up its Tandberg deployment capabilities following the Tandberg acquisition by Cisco. iVision addresses this gap and will enable Telstra to rapidly grow its expertise in Tandberg solutions.
Audrey William, Research Director - ICT, Frost & Sullivan, says, “2010 was a return to form for Australia's video conferencing market. Growing business confidence saw the resurrection of a number of previously postponed projects along with an increase in demand for new deployments.”
Frost & Sullivan's Australian Videoconferencing Report 2011 forms part of the Frost & Sullivan Australian Digital Media program. All research services included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants. Interviews with the press are available.
About Frost & Sullivan
Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 40 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com
The market, which is defined as including sales of equipment for immersive telepresence, video conferencing endpoints and video conferencing infrastructure, but excluding maintenance and communications revenuesis expected to more than triple by 2017, growing at an estimated combined annual growth rate of 19.1%. The findings are included in Frost & Sullivan's latest research report, the Australian Videoconferencing Market Report 2011.
Government, banking and financial services, utilities and mining industries were the main vertical markets undertaking video conferencing deployments in 2010. Other areas of high demand included education, health care and professional services.
The strongest segment of the market was room-based systems, otherwise known as video conferencing endpoints, which accounted for 66.7% of all video conferencing revenues in 2010. Growth in demand is being driven by the increasing quality of these mid-range solutions combined with gradually declining price points, and a shift in customer preferences from immersive telepresence to room-based systems.
Video conferencing infrastructure also experienced a sharp increase in growth due to a rise in the number of video conferencing deployments. After 2009 being a year of delay, many businesses revived their video conferencing plans in 2010, creating demand for infrastructure to efficiently connect multiple parties in a conference.
At the high end of the market, immersive telepresence solutions recorded growth of 3%. This has gone some way to redress the steep decline in demand experienced during the GFC. The report suggests that although this segment will not witness widespread uptake, it will continue to serve a niche where the business requirements of specific customers justify the investment.
The players
Cisco's strategy following its acquisition of Tandberg was closely monitored by customers and the market in general. While Cisco maintained a majority of the Tandberg customer base, Polycom capitalised on the uncertainty and grew its market share in Australia. Both Cisco and Polycom recorded strong revenue growth over the previous year and together they accounted for the vast majority of the overall video conferencing market share in Australia.
Within the small-to-medium-business (SMB) category, LifeSize continues to be the most prominent vendor, reporting wins across the health and financial services vertical markets. A number of emerging vendors including Huawei and Vidyo are also beginning to generate interest in this market. However, the study cautions that while offering a huge base for video conferencing deployments, the SMB market remains a difficult segment in which to generate growth. High price sensitivity and a preference for free applications such as Skype present the main challenges for vendors in this area.
Telstra, Dimension Data and Optus-Alphawest continued to be the dominant channel partners, accounting for the majority of wins in 2010. While Telstra and Optus-Alphawest bring their expertise as carriers to offer bundled solutions, Dimension Data enjoys an advantage as a systems integrator able to handle large scale and complex projects.
As anticipated in last year's report, further channel partner consolidation occurred in 2011 with Telstra acquiring the key Tandberg channel, iVision. A traditionally strong Cisco channel, Telstra needed to quickly ramp up its Tandberg deployment capabilities following the Tandberg acquisition by Cisco. iVision addresses this gap and will enable Telstra to rapidly grow its expertise in Tandberg solutions.
Audrey William, Research Director - ICT, Frost & Sullivan, says, “2010 was a return to form for Australia's video conferencing market. Growing business confidence saw the resurrection of a number of previously postponed projects along with an increase in demand for new deployments.”
Frost & Sullivan's Australian Videoconferencing Report 2011 forms part of the Frost & Sullivan Australian Digital Media program. All research services included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants. Interviews with the press are available.
About Frost & Sullivan
Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 40 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com