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September 11, 2012

IDC Reports Faltering Video Conferencing Sales

By Tanya Palta
TMCnet Contributing Writer

A new report from market research firm IDC sheds some light on the current state of video conferencing space, which surprisingly is faltering in the existing economy. According to IDC (News - Alert), the two main reasons that the video conferencing space is struggling is because of volatile global economy and reduced IT spending in the public sector.

The IDC report, which is dated Aug. 24, highlights how the video conferencing space dropped 10 percent in the second quarter from the same period in 2011, and 6.9 percent from the first quarter this year. In fact, the reported $564 million was the lowest since the first quarter of 2011 and more than 27 percent lower than the market record in the fourth quarter last year.

Some other details came to light as well and gave a clearer picture of the video conferencing space. According to the report, Cisco Systems (News - Alert), and established leader in the market was hit hard ,as its lead dropped to 41.9 percent in the second quarter, since it held 48.7 percent of the market in the first quarter, and 49.3 percent in the second quarter last year. Cisco also had an unlucky run in the immersive telepresence space, as the revenue in the multi-codec telepresence market segment dropped to 38.4 percent from the same three months last year.

Rich Costello, senior analyst for enterprise communications infrastructure at IDC, said, "Several of the video vendors pointed to the currently difficult macroeconomic situation, as well as a cutback in spending in key areas such as the public sector, including government and education, as reasons for the weak quarterly results. Although these factors are expected to persist and influence results somewhat in the second half of 2012, interest in video continues to grow among organizations, especially those with good use-case requirements."

However, not all vendors suffered the same fate as Cisco, as Polycom (News - Alert) saw a revenue increase of 8.9 percent from the first quarter and the company also showed an increase in market share, bringing it to an overall 32.5 percent.

"Despite the overall weak 2Q12 performance in the worldwide enterprise video conferencing market, we still see adoption being driven by video integrations with vendors' UC and collaboration portfolios, and with the increasing use of video among small workgroup, desktop and mobile users," Petr Jirovsky, senior research analyst for IDC’s Worldwide Networking Trackers unit, said. "Video as a key component of collaboration continues to place high on the list of priorities for many organizations."

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO West 2012, taking place Oct. 2-5, in Austin, TX. Stay in touch with everything happening at ITEXPO (News - Alert). Follow us on Twitter.

Edited by Amanda Ciccatelli


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