Growth in Video Communications will continue in 2012

LifeSize CEO Craig Malloy says ten years ago video communications was considered technology for the early adopters. Today, businesses and consumers are using video communications as a mainstream way to communicate.

Over the past five or six years, the video communications market has shown strong growth and analysts’ expectations have been 15 to 20 per cent per year on year. A high growth area of the market is going to be Infrastructure as a Service (IaaS), cloud services or hosted services rather than customer files on premise infrastructure equipment to handle bridging, firewall traversal, addressing management and those types of functions, which will be handled on a monthly service basis and hosted in datacentres.

(I believe…) The next phase of growth for Video Communications is going to based on; the notion of cloud services that allows more and more customers to get a full enterprise experience without shelling out hundreds and thousands of dollars for infrastructure equipment. Growth will also be based on low cost high-performance end points, cloud based infrastructure and the mobility aspect of it, be it communications on tablets, smart phones or a high quality experience on a Mac or PC platform, wherever you are it automatically traverses the firewall, whether you are at home, in a hotel room, at an airline club, in the office or on a wireless network. Mobility and cloud services will underline the growth over the next few years.

Video Communications is becoming a very competitive market; large companies like Cisco, Microsoft and Google are entering the market. A shift is occurring in Video Communications – becoming a mainstream market into a large industry that attracts large competitors in adjacent markets like networking or enterprise software. We are seeing it become an increasingly competitive market, which is good because that raises the demand for video communications. Like any market, as it grows and starts tomature, the competitive nature of it becomes more challenging.

In the last year we have seen emerging markets start to have some very good growth, which has led to more investment in these areas. Russia and China are examples of the highest growth markets right now. South East Asia, the Middle East and Eastern Europe are all areas of strong growth. Companies with plans to enter the emerging markets or BRIC countries like Brazil need to be aware of the regulatory environment, which is important but can prove challenging.

We continue to expect to see strong growth in 2012 as many emerging market deals will probably involve cloud services andwill be less willing to buy and manage very expensive on-premise infrastructure. There is of course growth to be had in developed countries because there are some that are still in the early stage of market maturity. However these markets are a little more price sensitive, bandwidth sensitive and don’t always have the network capability, but are getting better at a rapid pace.

With the winter months and the 2012 Olympics just around the corner, its events like these, whether planned or unplanned that has a reinforcing impact to use Video Communications. Everything from SARS, bird flu, 911, the Tsunami, the earthquake in Japan to the ash cloud over Europe last year have all been contributing factors. All of those situations have an incremental self-reinforcing effect on the value of video communications but will never replace all travel. People like to come in contact with others, which is important. However, it does highlight that companies should have the capability to do this as anormal course of business, whether it’s for speaking to remote employees, telecommuters, vendors or customers. At LifeSize we use it for all of the above . We are a good example of a medium-sized business; we have 500 people in the company who use video communications as a normal collaboration tool . If we did not make video, for example if we made coffee cups, we would still use video in the same way that we do business. We don’t make video calls because we are a video communications provider, we need to have conversations and because we need answers like any other business.

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