Videoconferencing Market Thriving

Videoconferencing and telepresence becomes utmost necessity for large enterprises to reduce costs when the economy has started to recover from recession. Business enterprises are restricting their travel budgets as cost control measures. This makes high-definition telepresence solutions a cost-induced alternative in an increasingly interactive world. This market stands to gain in the near future since enterprises, governments, and educational institutions are increasingly recognizing the productivity-enhancing benefits of video conferencing.

In a recent study, Infonetics estimated that the worldwide videoconferencing market size will reach $5 billion by 2015. According to Infonetics, the global videoconferencing market size was $2.2 billion in 2010, up 18% year over year. Earlier, Gartner predicted an even rosier picture that videoconferencing market size will reach $8.6 billion by 2015.

We believe, in the long-run, the videoconferencing solutions market will see healthy demand as a result of several positive industry trends, including globalization and the proliferation of branch offices; concerns about time demand and high cost of travel; homeland security and other government initiatives; as well as distance learning and healthcare applications.

The two major players in this market are Polycom Inc. (PLCM) and Cisco System Inc. (CSCO), which gains a major foothold after acquiring Tandberg TV. These two entities together commands more than 80% of the global videoconferencing market with almost equal share between them. However, as of now, Polycom remains the only pure play telepresence solutions provider, which is yet to collaborate with another company. Logitech International SA (LOGI) also joins the fray through its acquisition of privately held LifeSize Communications Inc. Another major player is Avaya.

An improving global economy is now enabling several business enterprises to invest heavily on network infrastructure developments required to sustain huge bandwidth-consuming data. Videoconferencing is one such application. Rapid growth of high-speed fiber-based broadband networks is an indication that the videoconferencing market will be able to continue its current momentum in the long run.

LOGITECH INTL (LOGI): Free Stock Analysis Report
CISCO SYSTEMS (CSCO): Free Stock Analysis Report

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