Video Conferencing Infrastructure and Endpoints Market Outlook for EMEA August 2013 9847-64
Contents Section Slide Numbers Research Background 3 Market Definitions 4 Research Scope 5 Market Overview 6 Video Conferencing Overview 7 Market Trends 9 Industry Verticals 12 Revenue Forecast 15 Market Revenue Infrastructure and Endpoints 16 Market Revenue Endpoints 17 Market Revenue Infrastructure 18 Market Share Rankings 19 Vendor Analysis 20 Key Takeaways 26 Legal Disclaimer 27 About Frost & Sullivan 28 9847-64 2
Research Background This research study is part of Frost & Sullivan s continued coverage of the EMEA conferencing and collaboration markets. Developed in response to continued growth in the video conferencing market, this study aims to provide an analysis of the key trends in video conferencing adoption in the EMEA region. This study will highlight some of the key market trends in EMEA, including video in unified communications, cloud computing, interoperability issues and vertical markets. This study will also provide estimates of market sizes and forecast for the EMEA region. 9847-64 3
Market Definitions This market update covers the enterprise video conferencing endpoints and infrastructure. All revenue, units, and prices are given at the manufacturer's level. Our research includes: Room Systems include single-codec room systems and multi-codec immersive telepresence systems. Executive Desktop Systems are characterized by fully integrated hardware based endpoints with built-in camera, microphone, speakers, and LCD display, which can also be utilized as a PC monitor. These units are primarily designed for personal conferencing. The smaller form factor makes them particularly well-suited for desktops, executive suites, remote offices. Infrastructure Systems include video conferencing bridges or multipoint point control units (MCU), routers, firewall traversal, gateways, gatekeepers, and management and scheduling software. o MCUs allow more than two videoconferencing endpoints to connect in a multipoint conference. o Gateways provide interoperability between terminals residing on disparate networks and protocols and are essential for multi-network and multi-protocol environments. o Gatekeepers are an integral part of H.323/Session Initiation Protocol (SIP). Gatekeepers register each of the H.323/SIP terminals and provide bandwidth control and optimization in addition to address translation, zone management and call management. o Management and Scheduling Tools include software that offer network management and monitoring, endpoint or device management, scheduling, directory services and calendaring services. o Network Address Translation (NAT)/Firewall/Traversal Solutions enable customers to make IP-based video calls within and across enterprises by securely traversing firewalls. 9847-64 4
Research Scope Geographical Scope: This research covers Europe, Middle East and Africa. The base year for this study is 2012 and the forecast period is 2013-2017. Revenue represent manufacturers sales of videoconferencing infrastructure and endpoints to distributors, service providers, systems integrators, value added re-sellers and end users. Revenue provided to us at the manufacturers level in dollars were converted to Euro s using the month Euro/Dollar average in 2012 of 1 = $. All Revenue are reported in millions. The scope of this research does not include the following segments: o Managed services and service fees associated with maintenance, integration, professional services, and installation. o Multimedia IP phones equipped to support video calls. o Video conferencing clients provisioned to mobile devices. o Desktop video soft clients including UC clients, web conferencing solutions, purpose-built desktop video conferencing software, and video chat clients such as Skype and Google Hangouts. 9847-64 5
Market Overview Frost & Sullivan estimates that the total global market for video conferencing infrastructure and endpoints was worth billion in 2012, declining % from billion in 2011. EMEA accounted for % of the global video conferencing market in 2012, behind APAC at % and North America at %. Although APAC and EMEA are very close in terms of revenue, APAC s shipments were nearly double that of EMEA, indicating the high prices in EMEA, particularly in Europe. The last quarter of 2012 showed signs of recovery, with Q4 Revenue in EMEA showing a % increase over Q3. Frost & Sullivan predicts that the EMEA market will grow % in 2013 over 2012. Europe is estimated to account for approximately % of the EMEA market. Growth from Middle East and Africa comes from a very low base. The lack of infrastructure, the high costs of systems and bandwidth, and limited use of video by businesses continue to restrict growth in these regions. Savings on travel costs and increasing need for collaboration are still the main drivers of video adoption in EMEA. The pervasiveness of video in everyday life through Skype, Facetime and other services; an increasing number of mobile devices equipped with video chat capabilities, and an increase in the number of use cases for businesses are driving wider adoption of video conferencing. 9847-64 6
Video Conferencing Overview Previously reserved for C-suite executives, video is now spreading to all levels within an organization. Large companies and SMBs are realising the benefits of adopting video conferencing solutions to reduce travel costs, increase worker productivity, and further a company s green initiatives. Facilitating collaboration of workers in disparate locations is recognised as a key enabler of business performance. It is widely acknowledged that visual presence enhances the work process and stimulates participation in discussions. Additional features like document sharing over video enable users to have timely and rich collaboration that s more efficient than passive and time consuming modes of communications like email. Healthcare and education sectors are still the primary users of video conferencing in Europe. The delivery of services and collaborative nature of the fields are well suited to the video platform. Video and telepresence can also become cost-effective solutions in the face of healthcare budgetary pressures and the spiralling cost of third level education. Financial services remains a solid vertical market because of large operating budgets and specialized use cases. The services sector and manufacturing are notable additions to vendors portfolios. The ability to cut time to market for goods and enhance service quality drives excellent returns on investment. For example, companies in the hospitality sector are employing staff via video to work as virtual receptionists to provide hour customer care. Video collaboration can also enable manufacturing firms to cut their time to manufacture and market when they monitor the different stages of the production process from one location via video. 9847-64 7
Video Conferencing Overview (continued) Regional characteristics and cultural differences regarding the adoption of video conferencing are less apparent than in previous years. This is perhaps because of the pervasiveness of video in everyday life across the EMEA region. Most laptops and mobile devices equipped with video cameras, and Skype, Facetime and other video services have become common means of communication. Furthermore, traditionally underserved regions like Eastern Europe have caught up in terms of bandwidth. The Nordic region, France, Germany and the UK remain the largest users of video conferencing systems. This can be attributed to companies footprint in these markets, the fact that they have traditionally been early adopters of technology and they host most of the commercial centres of Europe. SMB users outside of the commercial centres of Northern countries find just as many use cases for video conferencing as multi-national enterprises. Connecting with suppliers, engaging with clients, and cutting time to market in the face of competitive pressures from Asian manufacturers are just as relevant to SMBs as multi-national enterprises. Furthermore, the shift from purpose-built rooms to the desktop offers video at affordable prices. 9847-64 8