Roopam Jain's Blog


Cisco Seeks to Compete More Squarely with Microsoft and Google

21 Nov 2014

At Collaboration Summit this week, Cisco made a host of announcements sending a clear message – it is looking to simplify collaboration by changing how it innovates and brings its next generation products to market. Cisco is focused on removing the traditional barriers to meetings by eliminating the silos between audio, video and web conferencing to make collaboration faster and easier. Cisco’s new found emphasis on design and usability has a more consumer like approach, it is very light weight and intuitive. Moreover, Cisco’s huge cloud and software push and yet continued focus on the iron-clad enterprise practicality that customers have come to expect from it, is a new turn for the communication giant’s multibillion dollar collaboration business. All this combined with a mobile first approach and a strong initiative to break down internal silos within its collaboration business bodes well for Cisco.

The product that received the most attention this week was Project Squared, a new offering that brings together discrete communications under a team collaboration environment. It is essentially a mobile-first virtual meeting room which offers always-on messaging; instant voice, video, multipoint meetings; and content sharing in a team-centric workspace. It is designed to overcome the challenges that users regularly face – instantly getting into any type of meeting across devices with internal and external teams. Squared is built upon Cisco Collaboration Cloud; it leverages and extends the value of (rather than replacing) Cisco’s existing web conferencing, video conferencing and UC products. Sounds familiar? Well, we’ve seen iterations of this in the past from Cisco. There are also solutions from other vendors in the market that address this need such as Acano coSpaces and the recently launched Circuit by Unify, among others, which are built on the premise of team workspaces to bring people and content together.

So what is Cisco doing different? The most appealing part about Squared is the ease of entry into the app and getting started on the fly – very consumer like. The experience is so simple that the time to start collaborating is instant. Nothing beats that ease of access and simplicity from a user point of view. While it is mobile-first, there is an equal emphasis on having a rich desktop app, which is often overlooked. The combination of a new alliance with Box and integration with Cisco’s other applications ensures a single place for all sync and async communications. Project Squared is available to download now; it will be commercially launched next year. Until then it is a “project” that will see constant iterations and improvements based on user, partner and ecosystem feedback. A full set of bells and whistles, and to a certain extent some required functionality for more meaningful conversations, is missing in this early iteration. However, the concept of launching it as an ongoing project is smart on Cisco’s part. Kudos to Cisco’s leadership team led by Rowan Trollope and the development team led by Jonathan Rosenberg for shifting gears to build a new face for Cisco.

The evolution of Project Squared is entrenched in emerging market trends. Users are looking for more than great online meeting tools. Meetings themselves are becoming more than “one and done” events. It’s about the continuity of collaboration - everything in one place, in a room if you may, even after the meeting has concluded. Users want persistent team collaboration and a single workspace where sync and async communication modes fuse to help them do the day to day work better. Secondly, users want to have that same experience regardless of the device or location. This triggers the need for solutions like Squared.

With Squared, Cisco is eyeing the bigger market for team collaboration to better compete with the growing footprint of Microsoft and Google that offer solutions such as Lync with Sharepoint and Hangouts for working across teams. And it is aiming to do so through an overarching cloud and mobile first approach, which is well aligned with how users want to procure and use collaboration. The end-to-end Cisco story is very much relevant for enterprise customers that don't want to deal with the hassles of acquiring the several pieces of their collaboration puzzle from multiple vendors. Also, Cisco has proven that it can offer flexible deployment models which address a big market need today (cloud, on-prem, hybrid). To that end, the most exciting aspect of Squared is integration with Cisco Fusion, which offers customers the ability to blend workloads from cloud and on-premise assets. Lastly, open APIs that Cisco will make available in the future will offer developers opportunities to build Squared into custom work flows. Having said that, the market for team collaboration tools is getting increasingly crowded. The piece I believe that can truly differentiate Cisco is rich content sharing and management capabilities that will directly address the growing content chaos.

Cisco’s announcements come in the wake of new and not so new competitors nibbling away at Cisco’s market share. The likes of Citrix GoToMeeting, Join.me and Blue Jeans are challenging Cisco’s video and web conferencing dominance. It seems the new Cisco is open to disrupting and reinventing itself before others disrupt it. However, Cisco needs to do more than make exciting products. It must find ways to simplify its channel strategy, solve the conundrum of complex licensing schemes it has built for its fast growing software portfolio, and take bigger measures to get deeper and wider into SMBs. Moreover, with the company’s ongoing collaboration revenue decline and gradually eroding market shares, it needs to do so with an eye on swift monetization.

Citrix Gets on the Freemium Bandwagon - Launches Free Version of GoToMeeting

08 Apr 2014

Citrix has launched a free scaled back version of its online meeting service, GoToMeeting, called GoToMeeting Free. This follows the launch of GoToMeeting Essentials in Q4 2013, which is a lower priced version of GoToMeeting allowing 6 participants to join a meeting at $19/month.

Freemium services have become an established business model in the fast growing and intensely competitive online meetings and web conferencing space. Cisco, Adobe, FuzeBox, LogMeIn (join.me), among others, all offer freemium versions of their service. Presumably driven by these competitive pressures and to widen its user base, Citrix has launched GoToMeeting Free to offer free, unlimited-use video conferencing for up to three people. It is currently available on Chrome browser (Firefox is next).

There is a big difference, however, between GoToMeeting Free and other freemium online meeting services in the market. GoToMeeting Free is a WebRTC based audio video conferencing tool that requires no software downloads or plug-ins and is therefore easy to launch and use. Emerging from an internal Citrix Innovation Lab project called Hutt, it is primarily targeted at users that want to have adhoc simple video sync-ups and not necessarily looking for deeper feature sets yet. It does not allow screen sharing which comes as a surprise, since GoToMeeting is primarily known for screen sharing/web conferencing. Citrix will look at adding that functionality at a later point if required. Like any other freemium service, Citrix is targeting users that it hopes will eventually convert to its paid-for services after initial exposure and use.

There has been no dearth of free or low-priced basic meeting tools which have saturated the low end of the market. The battle to grab users in the SMB space is fully on and is leading to growing price-based competition. While all Services have a standard free 30-day trial, a "free perpetual" offering is more attractive to users. GoToMeeting Free does not require an email sign up either. This move from Citrix is going to add fuel to WebRTC-based communications and will draw users that are looking for instantaneous and simple communications over rich functionality.

GoToMeeting has been growing at a good pace consistently beating the industry growth. However, the threat from "industry disruptors" has loomed large, be it Hangouts or Skype or providers like join.me and Zoom. Citrix has been tackling these threats consistently and is willing to disrupt itself to continue growing.

Emerging Technologies - Spotlight on Acano

17 Mar 2014

2013 was a year of turmoil for the video conferencing market. While video has been gaining mind share and becoming a key communications tool for business users, several large vendors have seen a decline in their video conferencing related business. Market revenues for dedicated video conferencing endpoints as well as infrastructure products such as video conferencing bridges, continue to nosedive even though broad user demand is growing. The ongoing seismic market shifts point at the growing need for new ways of implementing video which open up opportunities for established vendors as well as new market entrants.

There is clearly an unmet need in the market today for ubiquitous video that is scalable, affordable, and easy to use. The answer lies in software-based solutions and cloud services that power video anytime anywhere, be it from conference rooms, executive offices, huddle rooms, remote offices, or mobile devices. The emergence of flexible software-driven solutions is changing the game. Several new generation video solutions are emerging to lead the shift. Acano is one of those.

Launched in August 2013, Acano offers a software-based, scalable, multitenant solution for persistent audio, video, and web collaboration within work spaces called Acano coSpaces. Acano coSpaces are like team meeting rooms - each has a unique video address, audio dial-in and web link, as well as a persistent chat wall. A coSpace is always available to any team member and, since they are unlimited, users can create them on the fly for any group, topic, or project.

I recently had the opportunity to speak with two Acano customers - MedCom and Charles River Laboratories (CRL) - who provided interesting insights into their evolving video conferencing implementations and how they are working with Acano to enable better ways of deploying team collaboration.

MedCom is a publicly funded, nonprofit organization owned and financed by the Ministry of Health, Danish Regions and the Local Government of Denmark. MedCom implements eHealth solutions to deliver safe and efficient access to healthcare information. In 2009, MedCom established VDX, a national hub to support video conferencing that provides cross-sectorial communication in eHealthcare between the various governing bodies and between physicians and patients for telemed consultations and home health care.

Peder Illum at MedCom talked to me about their vendor evaluation and selection process. Medcom ruled out the traditional hardware-based MCU vendors early on, due to the high costs. The other criteria revolved around any-to-any interoperability, especially with Lync. Peder stated, "Medcom evaluated and acquired Acano not just for greater cost efficiencies but also for a better way to integrate with Lync and WebRTC. The traditional MCUs are way too expensive and do not scale up. New market entrants like Acano are delivering the right quality at the right prices".

MedCom's initial deployment of Acano includes a core and an edge server and 250 ports of HD video conferencing. Medcom has not started using Acano coSpaces yet. However, Peder sees exciting possibilities since they can have an unlimited number of coSpaces as virtual meeting rooms where health professionals can discuss treatment and get the patient/citizen involved.

The second customer I spoke with is Charles River Laboratories (CRL). CRL is a leading global provider of solutions that accelerate the early-stage drug discovery and development process. It provides the models required in research and development of new drugs, devices and therapies, and the services required to test drug efficacy and safety. CRL’s client base includes global biopharmaceutical companies, biotechnology companies, and leading academic institutions and government agencies. CRL currently operates 68 facilities in 16 countries worldwide. Its challenge is to provide communications between the various disciplines involving scientists, sales and marketing teams, and client firms.

Back in April 2013, CRL acquired Lync which became its go-to collaboration platform. However, CRL faced the challenge of extending Lync beyond the walls of the company for external communications and also needed a solution to connect their video conferencing room systems with Lync clients. Raymond Beaulieu, Senior Director of Network Operations and Infrastucture at CRL, evaluated a host of cloud and premise-based video conferencing solutions. "Each of the options we looked at required us to make some sacrifices – either they were very complex to implement or did not deliver the seamless user experience we were looking for. We want the technology to be an enabler and not be in the way", said Raymond.

CRL uses Lync over the Office 365 cloud. Several conferencing solutions they evaluated required them to bring Lync back on-prem. A heavy user of Lync in the cloud and of Cisco Unified Communications Manager, CRL was looking for a solution that worked with their current set up and allowed them to leverage existing investments. "Acano offers us a solution that not only ties into our existing deployments but also offers a single platform to manage across audio, video, and web conferencing. A huge additional benefit was that with Acano in place we were able to take out our existing audio conferencing bridging solution, saving thousands of dollars in audio conferencing charges every month. Now we have one invite with the same interface and same number, whether it’s an audio or a video call or content sharing", said Raymond.

Currently CRL’s Acano deployment is at 15 percent capacity, in terms of total Lync users. In phase one of the deployment, CRL is using the Acano solution mostly as an IT and executive communications tool. In future roll outs, it is looking at extending it to a broader set of business users over coSpaces. According to Raymond, while CRL’s decision to go with Acano was more of a functionality and productivity play, the cost efficiencies were a byproduct. CRL found Acano’s pricing model to be very attractive, unlike traditional fixed capacity bridges where customers pay for maximum capacity.

In addition to the above customers, Acano reports a growing number of deployments. With a rapid uptake by cloud service providers and enterprise users, Acano is aggressively expanding its global partner network. As an emerging vendor in a market dominated by heavyweights, like Cisco and Polycom, Acano needs to continue working on establishing credibility among large customers that look for a long track record when making their vendor selection. Acano seems to be solving several pain points that have hindered video conferencing in the past. The timing is right as user needs shift drastically. Backed by an impressive management and development team, Acano could shake up a few things for the more established vendors.

Google's Enterprise Video Aspirations

07 Feb 2014

Google has launched a video conferencing solution for businesses called Chromebox for Meetings. Chromebox for Meetings is a simple $999 bundle of a Core i7-based ASUS Chromebox with remote, camera, and microphone for conference rooms. The system uses Hangouts at the backend and is touting ease of use and management.

Google wants to tackle the complexity challenge that typical business videoconferencing users face. Chromebox for Meetings is tightly integrated with Google Calendar, which allows users to easily invite others, schedule meetings, and add rooms to video meetings directly from Google Calendar. It also allows the display to always show the schedule for the room. Supporting up to 15 video streams, users can join meetings from any device that can run Hangouts.

Chromebox for Meetings is targeted at small conference rooms and office spaces for up to 6 to 8 participants. Meetings in huddle rooms clearly provide a more conducive collaborative environment than larger boardroom type settings. The sweet spot for devices in this category is indeed the sub $1k price point. Logitech, Tely Labs and some others offer devices at less than $1k.

So what do we think? Well any enterprise announcement by Google has to get attention. Though there are enough skeptics to point out Google’s past failed attempts at enterprise collaboration, we view this as a good play for Google. Clearly it puts aside the notion that Hangouts is not for the enterprise user.

The video conferencing market today has become a confusing landscape for enterprise buyers and users. It is expected to sort itself out as we see solutions emerge that offer the right user experience at the right price point. Chromebox for Meetings can make an impact. But Google is getting into a space where Microsoft and Cisco are firmly grounded. It will need a whole new push including some much needed savvy marketing to put a stake in the ground.

In a separate but connected announcement, Vidyo a long time Google technology partner, has announced VidyoH2O. VidyoH2O is an interoperability solution to connect WebRTC-based Google+ Hangouts users to the installed base of voice and video conferencing users that have solutions from Cisco, Polycom, Lifesize, Avaya, Vidyo and others. It will be available both for on-prem deployment as well as for cloud consumption, a smart move by Vidyo to address flexible deployment needs. It is priced on a subscription basis at an attractive $99/month for on-premise deployment, or as a cloud-hosted service for $149/month.

While this partnership with Google is not exclusive, Vidyo is the first vendor to offer the interoperability and is also Google’s preferred partner. Since it will be promoted and supported by Vidyo and Google channels, it gives Vidyo exposure with Google apps customers and new partners. The interoperability also addresses challenges with any-to-any video in a market that’s clearly standing at the cross roads of consumer and enterprise solutions.

Vidyo is also working with Google on including Vidyo’s SVC technology in VP9 and client software in Chrome for scalable WebRTC. Vidyo’s software-driven approach positions it well and provides an opportunity to partner with Google on several fronts.

Citrix Gets Aggressive in Collaboration - Launches GoToMeeting Essentials

23 Sep 2013

Citrix unveiled several new developments for its SaaS business at its annual industry analyst event last week. Besides a new UC client and a fun whiteboard app, one thing that caught my attention is a new go to market approach and pricing for its successful GoToMeeting product. Though the web collaboration market has changed drastically over the last few years, GoToMeeting licensing had practically remained unchanged for a while now. Citrix is now going after a wider customer base for small group collaboration and has launched a new version of GoToMeeting called GoToMeeting Essentials.

GoToMeeting Essentials is a lighter version of GoToMeeting that allows participants to join a meeting at a low price of $19/month and $16 with an annual contract(http://www.gotomeeting.com/online/meeting/pricing). Essentials offers the same functionality as GoToMeeting, with two exceptions - instead of 25 people per meeting, you're limited to 6 and there is no recording functionality. While this is not the lowest price available in the market for meetings of this size, it’s going to make customers stop and think before they consider alternatives when looking for a basic collaboration service. Along with the new version of GoToMeeting, Citrix is making its ecommerce more flexible allowing users to buy multiple licenses online. In the past, its ecommerce engine had a limit of one license and users that needed more licenses were required to go through the sales team. To encourage adoption, Citrix has also instituted no-credit card trials making the process easier for customers. Additionally, Citrix is widening its channel partner and service provider alliances to get deeper into certain markets.

GoToMeeting has been growing at a good pace consistently beating the industry growth. The GoToMeeting family of products (GoToMeeting, GoToWebinar, GoToTraining) grew at 22 and 21 percent respectively in Q1 and Q2 of 2013, twice as much as the industry average. As a result, Citrix has climbed up the market share ladder and has been gaining 2-3 percentage points annually to become the strong number two vendor in the web conferencing space. That’s all good for Citrix. But the threat from “industry disruptors” looms large, be it Hangouts or Skype or providers like join.me and Zoom. Citrix is taking this threat seriously. With new leadership at helm for the SaaS business under Chris Hylen, the goal is to not only grow the top line but to also rapidly accelerate the customer base. As Sampath Gomatam, GM of Real-Time Collaboration at Citrix, rightfully observed “we need to disrupt ourselves before someone else disrupts us”. That also applies to new offerings like Project Zeus, a free UC client for chat, voice, screen sharing and video which could possibly eat into some of GoToMeeting usage and sales. Citrix in the past was challenged by a lack of presence in UC and did not offer hooks into IM/presence-driven multi-modal communications, a market that Microsoft and Cisco are grabbing. Zeus fills in that gap to offer simple ad hoc collaboration for small groups. 

A large part of these changes can be attributed to Citrix feeling the threat from unexpected quarters. A plethora of providers have come in to the market and grabbed large user base. Citrix’s key selling proposition from the past –ease of use and simple pricing – while appealing to SMB users needed a new push. Citrix is creating more bundles across its product line offering greater pricing flexibility as it leverages and cross sells to a vast user base for GoTo products, Sharefile, and Podio. Citrix must now, as the next logical step, simplify the product line and offer seamless integration between the various collaboration pieces.

The web conferencing market is experiencing significant disruptions resulting from a shift to lower priced services as well as freemium offerings. Users are rapidly adopting free/low priced no-frills offerings. The rapid influx of BYO has further reduced the entry barriers opening new revenue streams to a broad range of companies. These market shifts pose challenges for established vendors like Cisco and Citrix. The arrival of GoToMeeting Essentials coupled with a more flexible sales strategy and a rapidly expanding solutions portfolio is pointing at a more agile Citrix that will not hesitate to fire on all cylinders and take some risks along the way. 

Emerging Trends in Web and Video Conferencing - What's in Store for 2013 and Beyond

14 Jan 2013

2012 saw another solid year of growth for web and video conferencing among businesses. User demand is growing at a strong pace indicating that web and video meetings are going mainstream.

In a recent Frost & Sullivan survey of C-level executives in North America, web and video conferencing ranked high among key enterprise communication applications for awareness and usage. Eighty five percent of the respondents indicated that they are aware of the benefits of video conferencing with fifty eight percent using it within their companies. Seventy eight percent of the respondents indicated that they are aware of the benefits of web conferencing with sixty percent routinely using it.

Web and video conferencing are now a key part of enterprise communications, drawn into the buying decision by line of business users as well as IT decision makers. Additionally, prices continue to decline making virtual meetings a viable technology for all, including small and mid-sized businesses.

Several emerging trends are changing the face of virtual meetings. The plain old vanilla online meetings of yesterday are giving way to enhanced offerings that include HD video, advanced mobile capabilities, social media integration, and workplace collaboration tools. These trends are increasingly getting intertwined along with a continued focus on improving the user experience. Here’s what to expect in 2013 and beyond.

Mobility 

  • Mobility is all the rage right now and will continue to be the headline stealer in 2013. In 2012, mobile downloads of web meetings grew rapidly. We expect that joining web conferences from mobile devices this year will increase 2 to 3 times over prior year.
  • In 2013 and beyond, vendors will shift strategies and lead with "mobile first". As a result, mobile experiences will move from being second-tier clients to being the main focus of development. Vendors continue to lead with iOS followed by Android.
  • There will be a greater focus on improving the mobile user experience to offer robust host as well as user controls that are currently missing from most mobile extensions.
  • In the future, usage will mostly be driven by the move to "in-app" communications on mobile devices. Companies that lead in delivery of mobile collaboration and content will become the market disruptors. 

Video 

  • Video will continue to see tremendous growth. Bigger screens and 4G speeds make smart phones and tablets the device of choice for online collaboration.
  • As IT continues to tackle the headaches of bandwidth and network management, video usage will grow exponentially.
  • 2013 will bring accelerated growth for cloud-based video conferencing services.
  • We expect the attach rate of video in online meetings to reach 25 percent by 2015. In other words, one in every four online meeting will have a video conferencing component.
  • Video conferencing will move away from hardware-intensive, high priced boxes to "video-for-everyone" over iPads and web-browser based clients, which is how a bulk of users will connect in the future.
  • Users will show preference for communications solutions that offer any-to-any connectivity. A growing number of online meetings will interoperate with standards-based room systems as well as video chat clients.
  • Software-driven solutions, cloud services, and growing virtualization in video conferencing will push out traditional expensive hardware-based solutions and open the floodgates of adoption.

Emergence of Collaborative Workspaces 

  • The pendulum is swinging from discrete online meetings to integrated collaboration.
  • Collaboration is increasingly shifting away from siloed web meetings that are disconnected from user activities to web collaboration fully embedded in applications and services routinely used on PCs and mobile devices.
  • Web conferencing vendors in 2012 focused on combining the elements of project management, video and web chat, file sharing, and social media interactions into one unified experience.
  • In the future, users will increasingly move away from e-mail and rely on optimizing team communications within shared workspaces.
  • Shared workspaces remain dominant for intra-company communications for activities such as project and task management. In 2013, there will be a growing number of workspaces extended for inter-company communications across user communities from multiple enterprises. 

Web RTC – Growing Possibilities 

  • WebRTC is enabling easy browser-to-browser connectivity for real-time applications without the need for a software plug-in. There will be a rapid build-out of applications that will bring in a new level of commoditization in the already fast-changing video and web conferencing markets.
  • Several startups are delivering APIs enabling customers to build their own WebRTC-enabled applications, while others are already delivering browser-based voice and /or video services that leverage WebRTC.
  • While WebRTC lowers the barriers to entry to build real-time communication applications, the current version gives little control or information for sophisticated multiparty sessions. As such, multi-party web and video communication applications in use today will likely remain in demand.
  • As WebRTC technologies continue to mature, there will be growing convergence of the current crop of web conferencing solutions with the emerging WebRTC technology. The growing adoption of WebRTC will force vendors to leverage the protocol to connect users into existing communication experiences.
  • WebRTC is expected to have the biggest impact in customer facing applications that extend companies’ customer service and sales capabilities. Look out for rapid innovation of many new solutions for communications based on WebRTC.

Polycom's Recent Announcements - A New Direction for the Company

09 Oct 2012

At Polycom’s strategy day yesterday at the NASDAQ Marketsite, the Polycom executive team came out in full force to talk about the company’s new direction. After a lull of almost two years when it seemed like Polycom’s R&D engine had slowed down, the company has announced a set of bold new products and enhancements that hit on all key themes – cloud, browser based access, connectivity with Skype and GoogleTalk, and an improved user experience. All these areas strike a chord with anyone who uses video conferencing for business which, as it stands today, continues to be ridden with usability issues.

With these announcements, Polycom takes a direct shot at its competition particularly Cisco and market disruptors Vidyo and Blue Jeans. The details behind the new products including pricing are missing and will trickle in over the next several weeks and months. While there was a barrage of new information that left our heads spinning, what is getting the most attention is the CloudAxis Suite. With CloudAxis, Polycom provides a web interface from where Polycom users can connect with their contacts on commonly used video chat apps such as Skype, Facebook, or Google Talk and import those contacts into a global directory. This is a significant announcement extending the reach of traditional videoconferencing to a wider installed base and for new B2B and B2C applications.

Polycom’s competitor Blue Jeans currently offers interconnectivity between legacy videoconferencing systems and Skype, GoogleTalk etc. in a cloud-based model. Polycom is extending its solutions for any to any connectivity and offering flexible deployment models around it. CloudAxis will enable Polycom’s service provider partners to deploy video and web based collaboration as public and private clouds. Polycom also announced that it will launch a new VCaaS offering, powered and hosted by Polycom, which will be resold by service provider partners for customers that want to deploy an Opex-based model. Polycom emphasized that it will sell the service only through its channel partners to prevent any channel conflict.

Polycom is also introducing a new product called the RealPresence Collaboration Server 800s which essentially transports its videoconferencing bridge RMX ‘s capabilities on to general purpose servers for mid-market customers. The Polycom announcement refers to it as virtualized video collaboration. However, it should not be in any way confused with true virtualization of multipoint capabilities. Nor is it a standalone software-based bridge yet and remains a hardware appliance. In the future, it may be virtualized and licensed as software. When it comes to virtualization, Polycom’s competitor LifeSize has made a concerted move and offers LifeSize UVC MP which is a virtualized MCU that users can buy by the port.

Polycom is adding SVC support to both RMX and Collaboration Server 800s. The key market differentiator for Polycom is that it is supporting SVC and AVC on the same physical server (no gateways required) and offers native integration with Microsoft Lync. Additionally, Polycom last week announced that it is licensing its SVC implementation to ensure interoperability. Having a freely licensed specification that Polycom, Microsoft, and other vendors in UCIF can implement will be good for the market and will prevent formation of several "SVC islands" that can further hinder interoperability. In the SVC arena, the battle between Polycom and Vidyo is just beginning, and it will be interesting to see how it plays out. It is important to note that Polycom did not announce a standalone SVC media router which Vidyo offers. Instead, Polycom is software enabling SVC on RMX and Collaboration Server 800s and offering hybrid SVC/AVC. While this will raise the HD capacity 3x and bring down the cost per port significantly, it will not make Polycom’s SVC port price as attractive as Vidyo’s.

Among other announcements Polycom is introducing a new UI and user experience enhancements including the cool SmartPairing software, a new desktop client, and a new line of room systems. Andy Miller in his presentation talked about the strength of Polycom’s partnership with Microsoft and the power of their joint solution. This was aimed to diffuse concerns around Microsoft’s possible direction in the future with Skype, which some believe will remove the need for partner solutions. Sudhakar Ramakrishna talked about open standards-based approach being a key differentiator for Polycom. His statement around the new products being H.265 ready and being backward and forward compatible was broad but nonetheless relevant for customers that are looking at what’s next in video collaboration.

The products from Polycom’s announcements are out by several months and some will be available in Q1/Q2 2013. It almost seems like Polycom announced its six to nine month road map which leaves us wondering if that could lead some end users to hold off on current purchases. Also a lag of several months between announcing the products and actually making them available gives competition time to come in and make real products available.

As Polycom changes gears and moves towards cloud and software-based solutions, it will expand its go to market model from traditional hardware-focused video conferencing channels to broader collaboration SIs and VARs. Polycom would need to evolve its channel strategy carefully without alienating its traditional video conferencing VAR base and ensuring that customers continue to get the support and hand holding that most video conferencing deployments need.

Everyone agrees today that video conferencing is changing at a fast pace. It is moving from hardware intensive high priced solutions to video over iPads and web browser based clients, which is how a bulk of users will connect in the future. But how to deploy and manage secure business quality video conferencing to a large group of desktop and mobile users, without breaking the bank and blowing up the network, remains a key real-world challenge for users today. That’s where I think the current video conferencing vendors can create long term value and sustainable business models. Polycom’s announcements are a step in that direction and a significant evolution for the company.

The video conferencing space is clearly heating up. Without all the technology and pricing details behind Polycom’s announcements, it’s difficult to say to what extent these will be true game changers. However, directionally it all makes sense. Polycom was successful in making a big splash yesterday. It achieved what it intended to do - show to the market and users that it plans to continue leading in the video collaboration market and is willing and nimble to change the direction when needed. That in itself is a big message – the rest lies in execution.

Vidyo's Free Cloud-Based Connectivity Service - Could it be a Game Changer?

24 Jul 2012

Vidyo is grabbing the headlines this week with the announcement of VideoWay - a free cloud based connectivity service for anyone using H.323 and SIP-based video conferencing endpoints, Lync clients, and mobile devices to connect with each other and/or with Vidyo endpoints. Scheduled to launch this fall, the free service is targeted at users in the enterprise videoconferencing market which is currently dominated by traditional MCU and gateway solutions and services. According to our recent research, the market for video conferencing infrastructure systems continues to grow rapidly with global revenues reaching $746.6 million in 2011, growing at 26.8% over the prior year. The top two vendors – Cisco and Polycom– dominate the market with 75% of the revenue share. Vidyo aims to disrupt this space with its software-based routers that leverage H.264 SVC technology for delivering HD video over general purpose IP networks at lower costs. Growing at 82% in 2011 (albeit from a small revenue base), Vidyo is expanding its footprint for its branded products as well as non-branded offerings through service provider and OEM partners.

I was at the pre-briefing and demo of VidyoWay last week at an analyst event hosted by Vidyo in New York city. The process of joining a VidyoWay call seems extremely simple for even the most novice users. Users can click to connect from the email invite and join the video conference via the web interface with a meeting number and PIN, similar to using an audio conferencing service today. This takes away the complexity typically associated with multi-vendor environments connecting for B2B video collaboration. Users can invite participants from their own address book instead of a centralized directory. VidyoWay also offers a mobile client for smartphones and tablets.

VidyoWay being completely free will appeal to IT managers that are looking to extend the reach of their existing video conferencing systems for B2B connectivity without busting their budgets. This announcement will directly impact not only the traditional MCU market but also services offered by the likes of Blue Jeans (though Skype connectivity is missing), Vidtel, and Glowpoint.

When asked about the cost model and monetization opportunities, Ofer Shapiro Vidyo’s CEO and co-founder explained that VideoWay is strictly meant to connect existing video conferencing endpoints from providers such as Polycom, Cisco, and LifeSize (roughly measuring at a million endpoints today). Vidyo will monitor usage and through its fair use policy will require the use of the service only for the purpose of connecting traditional room and desktop based video conferencing devices. Vidyo is not giving away any free video conferencing clients, such as VidyoDesktop licenses, so it will continue to generate revenues for its product line. As a result, Vidyo will be able to contain the costs while being able to use VidyoWay as a platform to create awareness and get into the enterprise. According to Vidyo, the economics work out way better than the expensive marketing campaigns.

Vidyo has already created a buzz in the market for its solutions and its message against what it calls expensive legacy MCUs. While it does not publicly disclose in-depth revenue details, in Q1 2012 when most vendors reported a Y/Y revenue decline Vidyo grew revenues by 90% for its branded products. With VidyoWay, the adoption will escalate even further making it a key provider in this space.

B2B connectivity has been one of the biggest pain points for videoconferencing users. VidyoWay addresses that challenge directly and since it will be free for any number of enterprise users, it has the potential to immediately swing users from competitive offerings. However, the move is not without risks. It goes without saying that VidyoWay will catch on only if the service delivery is top notch and users don't face any technical  or usabilty issues. Moreover, Vidyo’s success will eventually hinge on its ability to have a sustainable monetization model and on conversion of free users to its paid-for solutions and services. While it remains to be seen if Vidyo will be able to significantly impact the well establised video conferencing businesses run by Cisco and Polycom, this announcement is sure to pose some serious headaches for Vidyo’s competition.

Economic Uncertainty Casts a Shadow Over Videoconferencing - Q1 Market Update

18 May 2012

Disappointing Q1 results from market leaders Cisco and Polycom, coupled with a mellowed guidance for Q2, do not bode well for the videoconferencing markets. Revenues nose-dived in Q1 raising the big question - can videoconferencing continue the phenomenal climb it has seen over the last several quarters?

Our recent research indicates that 2011 was a watershed year for videoconferencing. Revenues for endpoints and infrastructure systems surged to $2.8 billion in 2011, growing at 22 percent over prior year. Prices were stable and user demand remained strong throughout last year.

Q1 2012 Videoconferencing Revenue Highlights 

  • Revenues grew 10% Y/Y with endpoints growing at 11.4% and infrastructure at 6.6%. Most vendors with the exception of Cisco reported a Y/Y revenue decline. Cisco was an aberration primarily due to its low sales in Q1 last year. Q1 2011 was a weak quarter for Cisco, largely due to channel issues and delayed orders resulting from transition of its ordering system after the Tandberg acquisition.
  • Q/Q revenues declined by a whopping 22.6% from $830.7M in Q4 2011 to $642.9M in Q1 2012. Endpoints declined by 21.5%; infrastructure decline was 25.4%. This seems to be 2 to 3 times the seasonal dip normally seen in the first quarter of the year.
  • Among the major vendors, the biggest Q/Q decline came from Cisco followed by Polycom, leading to a market share loss for Cisco in Q1. Radvision reported better than expected Q1 earnings and LifeSize held its revenues stable.

Top Reasons for a Soft Q1

A confluence of several factors are coming into play in the videoconferencing markets.

  • An uncertain economic climate – Concerns about the state of the global economy and cautious spending is putting a damper on videoconferencing growth. Vendors are reporting longer sales cycles and delays in the approval process. Furthermore, with the exception of travel reduction, the soft benefits of videoconferencing make it a hard sell to decision makers that are focused on the overall bottom line.
  • Sales restructuring and channel issues – Major vendors have cited internal delays due to reorganization of sales teams as they move from selling point videoconferencing products to broader UC solutions. Polycom continues to show weakness in North America as it works on improving sales execution in the region.
  • Impact of alternatives - Microsoft's increased marketing efforts around Lync being enterprise ready for voice in addition to its collaboration offerings has led customers to evaluate Lync as an alternative, leading to delays in the decision making process. Microsoft reported a 35% revenue growth in Q1 for Lync. Citrix Online reported a 29% revenue growth for its collaboration products with strong adoption for HDFaces video over PCs and mobile devices. We expect customers will continue to evaluate and adopt alternatives to traditional telepresence solutions to meet their collaboration needs.
  • Pricing pressures - A significant slowdown in adoption of high end immersive telepresence suites as well as greater competitive pressures from vendors such as Huawei and Vidyo, that continue to nibble away market share, are leading to lower prices in the industry and impacting revenues.
  • Seasonality and buying patters - Q1 has traditionally been the weakest quarter for videoconferencing industry due to the buying cycles. Following on the heels of strong purchasing in Q4, customers are focusing on roll outs during the early part of this year. 2010-2011 was when wallets began to open up and now we are starting to see those deployments settle in. We expect to see a buy- deploy- use- upgrade cycle.

Despite the Q1 market performance we believe the long-term forecast for videoconferencing remains strong. Vendors are stepping up their game with a focus on stronger sales execution and investments in innovation. Video will continue to be top of mind as the next-gen mode of communications, with a bulk of the market remaining under penetrated. At the same time, it is now well understood that the face of videoconferencing is changing at a fast pace. End user discussions have shifted away from being exclusively focused on high-end telepresence to now include video to desktops and mobile devices and being able to do so economically. The emergence of tablets as a videoconferencing device and the impending shift to software-based solutions coupled with the impact of cloud-based delivery will open up new opportunities and at the same time upend established business models.

 

Avaya Buys Radvision - Dives Head-first into the Videoconferencing Market

15 Mar 2012

Avaya-Radvision acquisition rumors have been flying for months so it was barely a surprise when Avaya finally pulled the trigger and announced this morning that it is buying Radvision for $230 million. Avaya is paying about three times Radvision’s annual sales of $78 million in 2011. We see this as a technology acquisition that was a long time in the making after Avaya’s competition has clearly entrenched itself in the videoconferencing market.

Avaya offers a full portfolio of UC products but has been lacking in what is one of the fastest growing collaboration markets today – videoconferencing. Particularly after Cisco’s acquisition of Tandberg and Microsoft’s acquisition of Skype, Avaya was placed in a position where it was missing a key piece of the collaboration puzzle. While Avaya has been selling partner solutions from LifeSize and Polycom and offers its own desktop video solutions, this move places it in the middle of all the action in a multi-billion dollar enterprise videoconferencing space which grew at 22% in 2011, according to Frost & Sullivan’s latest research. Radvision in return will get a new home that it desperately needed after Cisco’s acquisition of Tandberg resulted in fallout for its OEM partnership, which at one point accounted for a whopping 35 to 40 percent of its revenues.

Having followed Radvision for years now, I had long ago reached the conclusion that its strength lies in its engineering and a well rounded product line but it could only go so far without a strong marketing and distribution channel backbone. With a fledgling channel strategy, particularly in North America, Radvision remains a distant player to market leaders Cisco and Polycom. In fact in recent years Radvision has been surpassed by stronger and relatively newer companies like Vidyo (co-founded and led by ex-Radvision Ofer Shapiro) and LifeSize and fast growing APAC vendors like Huawei. What Radvision lacked in marketing acumen and reach can now be made up by Avaya with its established UC channel network as well as a strong DevConnect community, Avaya’s developer ecosystem.

Radvision offers a full suite of videoconferencing endpoints and infrastructure products for room-based, desktop and mobile video applications. From a product line perspective, the acquisition will be complementary with little overlap.

-    Radvision’s Scopia videoconferencing products will enhance Avaya’s core UC capabilities integrating into the Aura architecture, allowing single user experience for multimodal communications over multiple media endpoints.

-    Avaya will also gain a platform in mobile video in a market that has been transformed by the strong emergence of video over tablets and smartphones. Radvision’s Scopia Mobile platform offers HD videoconferencing over iPhones and iPads and could add capabilities to Avaya’s Flare experience. Scopia Mobile is not available on Android yet. Avaya had originally introduced Flare over Android OS and recently extended it to iPad. Combined, these two solutions could open up interesting possibilities for a wide array of 3rd party mobile video apps.

-    Radvision’s recent products have been particularly targeted at the SMB space which will provide inroads to Avaya to penetrate new segments.

-    The acquisition will also offer Avaya opportunities in Europe where Radvision’s acquisition of Aethra has resulted in established channels and rapidly developing partnerships with leading service providers.

According to our latest research, Radvision holds a market share of 2.2% of a $2.7 billion videoconferencing endpoints and infrastructure systems market. While Avaya is not gaining a significant market player like Cisco did with the Tandberg and WebEx acquisitions, this move is strategic to Avaya. It makes Avaya a serious contender in the end-to-end collaboration markets where it can now offer a complete solution to its customers. It would be interesting to see if other UC vendors that do not yet own the videoconferencing piece will follow suit and move from a partner-friendly approach to a more self sufficient collaboration strategy. Anyone who uses videoconferencing today knows that the technology continues to face interoperability challenges. As a result, customers have shown a strong preference for end- to-end solutions from a single vendor. Both strategically as well as from a technology point of view, it places Avaya in a stronger position when competing head on with Cisco and Microsoft (which closely partners with Polycom for video). This is not a customer acquisition or a market share growth move by any means but a technology acquisition that will strengthen Avaya’s collaboration product portfolio. Moreover, as Avaya is preparing for its IPO, Radvision adds the highly valued video collaboration piece to its portfolio that positions it well in the eyes of investors.

Avaya’s three phase integration plan- starting with basic integration between Avaya and Radvision’s SIP and H.323 stacks followed by tighter integration of Radvision products with Avaya Session Manager and Avaya Aura and finally full integration of user interfaces - will take several months. However, Avaya is known for its nimble execution when it comes to integrating acquired companies into its fold.

The videoconferencing market, dominated today by Cisco and Polycom with a combined market share of over 75%, will have another large player to contend with. At the same time, Avaya has a challenging road ahead since both Cisco and Polycom have deep roots in videoconferencing through advanced product lines and strong channel and partner relations. Cisco announced this morning that it will buy NDS group for about $5 billion to accelerate its Videoscape platform. Cisco’s video vision in enterprise markets extends beyond videoconferencing to pervasive video through web presence, learning management systems, streaming, digital signage, surveillance, and video enabled smart boards. Bottom-line is that video collaboration in general is growing to become a key piece of business activities today. With the acquisition of Radvision, Avaya can further tighten its grip on the enterprise communications and collaboration market.

Web Conferencing Trends to Watch

27 Oct 2011

We recently published our 2011 web conferencing research which points at the strong demand and growth potential for web conferencing solutions. Global revenues in the web conferencing market reached $1.5 billion last year, growing at 10.8%. User demand is growing rapidly though revenue growth is starting to slow down due to increasing market maturity and the impact of declining prices. Revenues are expected to reach $3.1 billion in 2015, supporting a widening user base and a healthy 5-year CAGR of 15.3%.

Fast decline in prices and significant technology evolution are permitting customers to roll out web conferencing at a wider scale, going beyond traditional departmental-level deployments. The market is seeing early mainstreaming with penetration rates pushing up. Here are the key trends and findings:

SaaS Remains Dominant – Hosted services or SaaS contributed 81% of total web conferencing revenues. Based on an OPEX model, cloud technologies are creating time to market advantage for organizations of all size. The on-premise market showed strong momentum registering higher revenue growth than SaaS. The push toward UC is expected to lead to stronger growth for on-premise web conferencing. Cloud based UC services are evolving and do not yet offer the robust capabilities that their server-based counterparts provide. The need for customization and deeper integration are other reasons for adoption of on-premise UC.

Mobility and Video Redefine Collaboration – Enterprise communications is getting redefined as it centers around three new trends: mobile, social, and visual. End users will continue to win the "battle of choice" (BYOD, BYOA, consumerization of IT…). The mobility explosion, combined with growing demand for video and social media, has led to richer forms of web collaboration enhancing the end-user experience. Personal videoconferencing fueled by Skype, Apple FaceTime, Google Talk, is making enterprises more video-ready which has pushed video into all collaboration forms including web conferencing.

Software plus Service – Private clouds, hybrid solutions, and managed services are emerging to shake up traditional business models. As users move from an "either/or" approach to a hybrid ‘software plus service’ model, vendors are offering flexible deployment modes to meet changing end-user needs. Private clouds are the right answer for large enterprises that are risk averse and want to take small steps to cloud computing.

Growing Focus on Interoperability – Interoperability across multiple devices, networks, and applications will be critical to long-term viability of any offering. Vendors are offering SDKs, and open APIs for seamless integration with line of business applications, development of customized mobile apps, integration with telepresence systems, and so on.

Global Footprint – Growth in APAC far exceeds the annual growth in other regions. APAC is growing from a smaller base and remains under penetrated, posing strong opportunities over the next several years. Ensuring global availability and support of products and services will define the winning vendors and solutions. BRIC nations as well as countries classified as MAVINS (Mexico, Argentina, Vietnam, Indonesia, Nigeria, and South Africa) are the next hotspots for growth.

Pricing Pressures – While web conferencing continues to be a good growth market, revenue growth is not fully indicative of demand. Rapidly declining prices are bringing in  early stage commoditization. We expect price declines to be in the 15 to 20% range over the next few years resulting from heightened competitive pressures and an increased focus on selling larger communications solutions.

Strong SMB growth –  Cloud-based solutions are winning big among SMBs. SMB contribution in hosted web conferencing market continues to climb at a rapid pace. Vendors across the board are revving up ecommerce capabilities for better SMB penetration. While e-commerce is well established in North America, efforts are underway for ecommerce enablement and local language and currency support in several international markets.

Ongoing Market Consolidation - The web conferencing market has seen several smaller players and free conferencing providers gain significant traction. However, with the overall move toward UC, the market is getting more concentrated in the hands of larger vendors. Recent acquisitions include Dimdim by Salesforce, Elluminate and Wimba by Blackboard, Netviewer by Citrix Online, and more recently that of iLinc by Broadsoft. In the UC space, Microsoft’s acquisition of Skype further consolidated its position in the communications market. The well-established position and marketing muscle of communications giants pose threats for smaller players. However, larger vendors that are integrating web conferencing into their UC portfolio have to evolve their business models to continually innovate, offer attractive pricing, and stay agile to outsmart smaller more nimble competitors.

Keep it Simple – The dominant theme is simplification and creating easy-to-use stickier solutions at attractive price points. Feature explosion, or overloading a product with features, leads to explosion in complexity. What remain top of mind among customers are simpler intuitive yet rich user interfaces that deliver real business functionality. Open solutions are enabling an entire ecosystem of third party applications that run on top, so users can customize their user experiences and functionality.

For further information and in-depth market metrics, forecasts, market shares and valuable insights see the full study titled "Analysis of the Global Web Conferencing Market" (code N9D0-64) on www.frost.com.

Cisco's Growing Role in Mobility and Video - Thoughts from CScape 2011

16 Jul 2011

Early this week I attended Cisco Live and the adjunct CScape analyst event in high energy Vegas. Despite the press surrounding Cisco’s ongoing troubles (http://tinyurl.com/69hcuo7), the tone of the event was positive and the attendance was a record 15,000+ attendees in-person and 40,000+ attending virtually. Cisco’s executive team remains focused and committed to execute despite the distractions. John Chambers’ keynote was balanced – upbeat but realistic enough to make Cisco’s recovery path appear credible. It covered everything that one expected to hear as Cisco moves ahead, acknowledging the need to streamline the company and focusing on innovation around four key communication tenets – mobile, social, visual and virtual.

Cisco’s collaboration business has been a strong performer and was the focus of my discussions at Cscape. Cisco laid out a clear direction and roadmap for Jabber and WebEx, with Jabber becoming Cisco's next generation unified client that ties together multiple communication and collaboration applications. Mobility has long been center stage for Cisco and, as one of the four key tenets, is now even more prominent in the company’s initiatives. Besides the progress made by its own enterprise grade  collaboration-ready tablet Cius, Cisco also leads the market in providing extensions of its communication applications over multiple mobile devices and operating systems. WebEx offers High Quality video over ipads, iphones and Android devices. With more than 1 million mobile downloads already, WebEx mobile is clearly a point in case for the fast emerging world of mobile collaboration. Cisco’s overall mobility strategy positions it well for the post-PC era, a clear differentiator over its competitors.

Video as expected remains a key highlight at any Cisco event. During his keynote, Chambers set the tone for video’s prominent role in the future with a bold statement that video will not only be the next voice but will also be the primary form of IT. While one may question the ability or willingness of IT and the timeline for the transition, it clearly reflects a growing end user need and the direction that Cisco will continue to pursue. Video has been integrated into all communication clients offered by Cisco including Jabber. Jabber video clients will interoperate with Cisco TelePresence and other video solutions as well. High Quality video within WebEx will be enhanced to HD video, further putting the spotlight on the role of video in desktop collaboration. Lastly, Cisco’s recent focus on openness and standards based products removes several doubts around its ability to interoperate.

As one looks at Cisco’s pervasive video strategy, it's reasonable to question customers’ ability to deploy wide scale video and its impact over their networks. I saw demos of Cisco’s recently announced Conductor solution and Prime Software. Conductor, which acts as a traffic director to ensure intelligent conference placement and admin controls, and Prime a comprehensive network management tool could solve several IT headaches associated with broad video deployments. Expect to hear more from Cisco's infrastructure team as it works across several fronts to bring out advanced management and control capabilities. For customers looking at outsourcing videoconferencing, Cisco offers Callway, a cloud -based subscription service which was launched early this year. Interestingly, Callway remains little known and under-marketed. There is a growing need among customers to move video into the cloud for ease of use and management and to enable seamless B2B communications. B2B remains a key challenge for videoconferencing customers today. The Frost analyst team met with BT conferencing, a key Cisco partner, at the show. BT is doing significant work on B2B and managed services for video, providing an open interoperable environment between multiple vendors' solutions and is seeing very strong growth revenue growth for its managed videoconferencing services.

At the pervasive video roundtable discussion it was heartening to see a true case of pervasive video presented by West Texas A&M University which is using video for learning, security and communications to enable next generation learning. Video has been integrated through web presence, learning management systems, digital signage, surveillance, and video enabled smart boards using Cisco MXE and Show and Share. James Web, CIO at West Texas A&M University, mentioned that the new generation of students uses video and social media pervasively. As a result, they not only expect video in the class room but in some cases are demanding it.

I left CScape with a clear understanding of Cisco’s advantage in the industry as an end to end provider of all elements of collaboration to its customers – messaging, presence, voice, audio, video and web conferencing, unified messaging and mobility. However, Cisco’s collaboration vision is not without challenges. Its product lines today are a mish mash of multiple architectures and form factors. While consolidation is on Cisco’s agenda, we expect it to be a while before we see significant product simplification from an end user perspective. The multiple acquisitions have also resulted in operational challenges. Cisco’s channel integration issues, post Tandberg acquisition, have been well known. Cisco launched a new program for its AV channels early this year. However, its channel issues will be resolved only gradually as Cisco builds a well laid out plan, where each partner sees benefits in the bigger Cisco pond. Lastly, to ensure long term growth Cisco needs to aggressively address its lack of presence at the low to mid end of the market where competition is winning. Not only will Cisco need to redesign the products but also address a new level of price competitiveness that it is traditionally not known for.

Over the next several months a key focus at Cisco is streamlining. If Cisco stays focused on its execution plan, it can drive new growth through its collaboration portfolio which is very well positioned to lead in the post-PC era and in next generation  communications that will be supercharged with video.

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