Enterprise telepresence sales slide: More than economy at fault

Enterprise telepresence sales slide: More than economy at fault

Summary: Immersive telepresence sales have collapsed. Vendors blame the economy, but should probably look at the democratization of good enough video conferencing.

Immersive telepresence rocks, but in may cases cheaper alternatives will do. Credit: Cisco

The enterprise videoconferencing and telepresence market revenue pie shrunk 10 percent in the second quarter relative to a year ago, according to IDC data.

IDC reported that enterprise videoconferencing revenue was $564 million, the lowest mark since the first quarter of 2011. Immersive telepresence sales basically collapsed---down 38.4 percent in the second quarter compared to a year ago. Only Asia/Pacific showed growth in the second quarter.

Cisco's second quarter market share stood at 41.9 percent of the market, down from 48.7 percent in the first quarter. Polycom's market share was 32.5 percent, up from 27.7 percent.

The culprit for the weak sales, based on earnings conference calls and IDC, has been the economy and lower spending by governments and education institutions. However, I'd argue something else is behind the slide---good enough video conferencing.

Immersive telepresence is great technology, but there are back-end bandwidth costs as well as the need to retrofit conference rooms. In other words, the market is a bit limited to multinationals who have a bunch of employees flying around the world. Meanwhile, videoconferencing is going mobile as bring your own device and consumerization dominate enterprise IT. Where does immersive telepresence fit in that equation?

The average corporate cube dweller can get by with Skype, FaceTime, Google Talk, Microsoft tools, Citrix's GoToMeeting and a bevy of other technologies. Meanwhile, players like Logitech's LifeSize are bringing low-priced corporate systems to market. In other words, small workgroups don't need fancy video systems. And guess what? Most large corporations happen to consist of armies of small workgroups.

Videoconferencing will ultimately replace phone calls, but you're not going to need expensive projects to deliver that communication. Corporations will remain on the video bandwagon, but are likely to explore multiple---cheaper---options.

Topics: Unified Comms, Networking

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  • The "Company" and what it means...

    A company has its' roots in the old European mercenary military organizations. As such, a company has always worked better with a single, bold leader in command. We saw this at Apple, where one man wielded the power. The enemy of the company is the bureaucrat, which is an aspect of rot in an organization when a strong leader is absent. Enterprise telepresence is a way to extend the effectiveness of the bureaucracy and as such harms the company. the effect of a lack of meeting is stunning. At a large company I noted the effect of the company-wide meeting scheduler crash. Productivity went through the roof! People had to work instead of going to meetings. It was amazing!
    Tony Burzio
  • "democratization of good enough "

    Did the majority of the public, 51+ or more, decide that effort or going the extra mile isn't worth it?

    "'good enough' is good enough" is the mindset of the lazy, who want things done as cheaply as possible... that and nobody values effort anymore, except some colleges that will hand out "A" grades to those who work hard but otherwise fail every question... (or to any student who spends tens of thousands of dollars just to have to train their own H1B replacement at no cost...)

    Quite honestly, all the possibilities aside, one 20" monitor is going to suffice. The picture showed is merely pretentious bling on a self-aggrandizing and "gluttonized" scale.

    Even in Star Trek, they all huddled around 17" monitors if they had to... they kept it real... :)
    • A funny thing about this technology

      We have a telepresence conference room that looks almost exactly like the one shown. It is very impressive. It was installed about a year ago. My department is put on alert whenever it is going to be used in case they need support. I believe this has happened 3 times now.

      I have no doubt that the mere presence of telepresence cuts down on travel to meetings. But the technology is intimidating to many -- they will just use other means (like audo conferencing or web meetings) because if the technology doesn't work, nobody else is in their office to see them fail.
  • The future of Enterprise Telepresence is BYOD

    The reason telepresence is going down in my opinion is because we no longer need additional hardware or support.

    There is text messaging and calling on smarthphones/tablets. I believe mobile devices will begin to reign as they are portable, most employees are on the go, and most employees are distributed/scattered.

    There is a company called Damaka that has a software solution for mobile devices that allow them to do everything on a PC to a mobile device. You can even call from your mobile device to a telepresence system.

    Currently, Damaka now an ISV Partner with Microsoft for their iPad app Xavy, which extends the complete Lync experience to the iPad and other mobile devices.

  • Immersive visualization for telepresence

    Catopsys, our startup, has just released a 360° visualization platform for any image, any video or any 3D models, in any rooms. It is an important element to provide a fully immersive environment. More information on www.catopsys.com
    Do you believe that such technology can be useful to improve telepresence functionnalities ?
    Daniel Duhautbout
  • Telepresence and Tech

    Having also been in this business for years the reason the sales are sliding has less to do with the global economy (although that does not help) and more to do with the overall perception of telepresence and video conferencing in general. Archaic, expensive, difficult to use, expensive to maintain and well only for High Level (C) executives at Fortune 500s and 1000s. One of the responders mentioned "we had to have out tech team on standby when the telepresence room was booked" and this is the major issue.

    Telepresence and VC has been sold by techies to techies and only they can "maybe" use it. Telepresence... is like a rolls royce.. expensive and niche market oriented. VC on the other hands whether via the cloud or desktop (small system) or conference has NEVER been aimed at the real beneficiaries... the managers and the rest of the organization that could benefit from it. Then add the fact that few if any receiving "how to use" training and well.. the technology is good enough but it is NOT user friendly at all unless your are a CTO, CIO etc... and I have seen them struggle even at CISCO´s HQ!

    Change is coming and it is coming from the outside with cloud providers... some provide just pc/mac, tablet video conferencing like Vidyo, while others like Blue Jeans allow for traditional legacy systems to be included in the mix and others like an interesting company easymeeting.net also offer user friendly great price point hardware (if needed) and services bundles including easyNumbers instead of IP, ENUMS, vendor independent services... So change is coming and the market will grow but telepresence and high cost conf.room systems are on the way down.
    Evan J