Video Conferencing Evolution: Everything you need to know

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I’m holding a video conferencing analyst report that, on the surface, looks bleak for my industry.Sales of enterprise video conferencing equipment – which have more than quadrupled over the past decade – seem to have plateaued. Analysts believe the industry will continue to grow, but at a much slower pace than before.

Sales of high-end, immersive video conferencing units are down 25.8 per cent from this time last year. Sales of executive video conferencing units are down 7.7 per cent year-over-year. Sales of basic conference room units grew 5.1 per cent year-over-year, but are nowhere near the revenue records set in 2011.

Despite all this, interest in enterprise video conferencing is at an all-time high.

In a Deloitte-commissioned

sustainability study

published in late 2012, more than half of global CFOs said they planned to invest in video conferencing technology to reduce their travel expenses.

Video-enabled telemedicine is growing in popularity each year, with some hospitals seeing

hundreds of thousands of dollars

in travel-related cost savings.

President Barack Obama hosts videoconferences on a daily basis. Earlier this year, Pennsylvania Republican Rep. Michael Fitzpatrick

sponsored a bill

designed to greatly expand federal employees’ access to

video conferencing

.

If there’s so much interest in video, why do industry analysts forecast a slowdown in revenue? What’s really happening?

Over the past five years, the video conferencing industry has undergone a fundamental transformation, and is entering yet another period of rapid change. These changes are actively disrupting the incumbent players in this space, while providing people better, faster, cheaper and more ubiquitous video collaboration.

We’re moving away from video as its own impenetrable silo, toward a world where face-to-face communication is integrated into every aspect of our daily lives. We’re also moving from video predominately located in conference rooms to video on virtually every device we carry with us.

If you’re not using video at work yet, you will.In this article, we’ll examine what’s driving the evolution in this industry, what’s on the near horizon and how these trends will affect the way we do business in the future.

Let’s go way, way back to the video conferencing early days

Moore’s law

The declining cost of video conferencing

The per-unit cost of enterprise video will fall over the next five years in nearly every product category.
In a report published earlier this year, analysts at Wainhouse Research estimated the industry would sell about 280,000 basic conference room video systems by the end of 2013, at an average resale cost of roughly $5,945 per unit. (Market prices can be 25 per cent higher or more). Basic conference room systems, also known as single-codec systems, generally feature the codec itself, one or two flat-screen monitors, and dedicated microphone and camera equipment.
In the same report, Wainhouse estimates that by 2017, the industry will sell 461,700 basic video conference room systems per year at an average resale price of $2,759 per unit.
Similarly, the research firm estimates the price of dedicated video software will fall 66.2 per cent by 2017, the price of executive desktop video units will fall 26.1 per cent, and the price of video-enabled office phones will fall 23.5 per cent.
Even as prices fall, the market, as defined by overall revenue, is expected to grow. Wainhouse forecasts the enterprise video conferencing market will grow by roughly 25 per cent over the next five years, reaching $6.87 billion by 2017.
In other words, we’re on track to sell more units in the future at a lower cost than ever before.

Why video conferencing?

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