In Europe, opportunities for the continued growth of conferencing services present a mixed picture, since many alternative conferencing and collaboration technologies are now reaching the market, according to a new report by Frost & Sullivan (News
The report, European Conferencing Services, predicts that convergence technologies in the network and the enterprise will increasingly challenge conferencing service providers especially at a time when there is downward pressure on the basic audio services—which remain the core business for many.
Though developing markets of southern, central and eastern Europe are new areas for potential expansion, the report observes that they also represent shifting risks. According to the analysis, there is a possibility that next generation network and enterprise-based collaboration applications will get there first.
“The conferencing service industry in Europe has entered a critical stage of its development,” noted Dominic Dodd, principal analyst for Enterprise Communications (News
) and Collaboration in the Frost & Sullivan ICT Practice, Europe.
He pointed out that it is facing an inevitable, if slow, migration from the current, separate and well-established 'point products and services' of audio, video and web towards the wide-scale adoption of the unified communications and collaboration solutions.
Each key market in Europe provides their own opportunities and challenges for services providers, the report notes. While the largest country markets of Germany, France and the United Kingdom are maturing fastest, the emerging markets of Central and Eastern Europe (CEE) offer expansion possibilities but with risks attached.
The expansion of the European Union to include a number of states—previously part of the Soviet Bloc—has created fast-moving market opportunities for both local start-up services and entry by global or European-based conferencing service providers.
While estimated to represent only 0.9 per cent of total European revenue in 2007, the CEE region is forecast to grow to command 13.9 per cent by 2014.
Developing markets in southern Europe—especially Spain—and in CEE offer service providers opportunities for expansion using their existing technologies and platforms, but the report warns that such moves are not without risks.
This new report from Frost & Sullivan suggests that in the emerging markets, conferencing services providers should be careful about the mode of market entry to mitigate the risk factors.
The emergence of enterprise-based applications, the report states, can threaten revenues while, equally, the confusing plethora of competing solutions may persuade some buyers to stay with “point solutions' until things settle down,” with others calling out for managed services now.
According to Dodd, video conferencing services look set for something of a Renaissance, turning round the dwindling service revenues that have traditionally come from basic MCU and IP-ISDN
He added that the fantastic response to telepresence from the market is creating pull-through for high definition video conferencing and managed video services.
“The development and deployment of converged communications technologies is already impacting all areas of the collaboration industry, from within next-generation networks, to enterprise infrastructure and the desktop,” said Dodd.
He explained that customers are being faced with a number of alternative paths for reaching their goals of improved productivity, reduced costs and creating new forms of competitive advantage from strategic technology investments.
The new analysis from Frost & Sullivan also finds that the market earned revenues of $880.6 million in 2007 and estimates this to reach $1.69 billion in 2013.