Costs, Cloud and Connectivity Drive Strong Growth in Videoconferencing Market

By TMCnet Special Guest
Rob Bellmar, SVP of Conferencing and Collaboration at InterCall
  |  June 04, 2012

This article originally appeared in the June 2012 issue of INTERNET TELEPHONY.

Almost fifty years ago, AT&T (News - Alert) demonstrated what could be possible with video communications when it showed off its patented Picturephone at the 1964 World’s Fair in New York. Soon, AT&T installed these phones in booths located in Chicago, New York and Washington D.C., but due to the prohibitive costs of using the phones, they were scuttled by 1968.

High costs would plague video communications for decades, especially in the business world, and to this day, the technology is still not considered mainstream. But that is all beginning to change, due to a variety of converging factors.

By 2017, the worldwide market for videoconferencing will reach $14 billion, according to a recent report by Global Industry Analytics, and additional industry research by Wainhouse (News - Alert) Research shows that many organizations have documented videoconferencing usage increases of 50 percent or more in the past year alone.

So why is videoconferencing finally coming of age?

For one thing, the technology is becoming more cost effective for business. The expansion of the Internet, with its increased bandwidth and wide availability of broadband connectivity, and the lower costs for video cameras and hardware, have combined to reduce the cost of videoconferencing. At the same time, the high cost of fuel and the impact on budgets are causing organizations to look for ways to reduce business travel. Suddenly, videoconferences are a viable option.

Technological innovation is also removing usage barriers for businesses to use videoconferencing. For organizations to start adopting videoconferencing, it has to be just as easy as conducting an audio-only conference.

In the past, the lack of interoperability also served as a hindrance for growth. Dedicated systems and specially outfitted rooms were the norm, along with satellite uplinks for transmission. But now, through the use of cloud-based technology, service providers can offer solutions that allow people using Skype (News - Alert), Cisco or Microsoft Lync, as well as dedicated proprietary systems, to dial in for a conference and communicate with each other, regardless of their hosting platforms, their locations or the type of devices they use.

Cloud technology is crucial to growing demand for the market, as it helps customers to avoid the high costs and complexities associated with traditional on-premises bridging solutions (commonly known as multipoint control units, or MCUs). Yet companies can continue to use legacy equipment, rather than having to go through an expensive upgrade as user demand increases.

Wainhouse Research says this increased interoperability is one of the drivers for market growth. The other driver it points to is the increased need for multipoint videoconferencing. In the past, it said, a typical video meeting would have included three specially-equipped conference rooms, but as the workforce becomes more mobile and video meetings become more ubiquitous, a video meeting will include a “few meeting rooms and an even larger number of personal users.”

But with all these variables working in favor for videoconferencing, there are still obstacles the industry has to overcome to make it a mainstream technology. Unfortunately, some of them have nothing to do with technology.

For starters, individuals have to become more comfortable being on camera. We are not all TV personalities who love the limelight. It is widely known that many people are more afraid of public speaking than they are of death. The idea of having their images and voices projected to a wide group of people is not enjoyable for everyone. But it is expected that as videoconferencing becomes more commonplace, people will become more comfortable using it.

The next group of professionals coming from the Millennial Generation grew up using Skype or video cameras on their cell phones, and they have posted millions of videos to YouTube (News - Alert) and other services. They have shown that their generation is much more comfortable being on video, and they are expected to use this technology as they populate the workforce in greater numbers.

Aside from the psychological issue, there is also a problem with multitasking. Many professionals keep working during an audio conference call – answering e-mails, reviewing written materials, etc., because the pace and volume of their responsibilities has continuously increased in today’s working environment. 

Videoconferences might make meetings more efficient by making attendees more focused and visible, but that is a topic for a whole different discussion on the misperception between activity and true productivity.

When AT&T presented its Picturephone, there were too many obstacles to overcome to make the video phone a success. Today, as videoconferencing becomes more cost effective, interoperability becomes a reality, and the workforce continues to push the need for multipoint videoconferencing, it appears that the market drivers are too strong for the industry to fail.  But it sure would help if someone created a lens that took 20 pounds off a video image.

Rob Bellmar is senior vice president of conferencing and collaboration at InterCall (News - Alert) (, a subsidiary of West Corp., and the largest conferencing and collaboration services provider in the world.

Edited by Braden Becker