Video comms market $52.6 million and growing

Gordon Peters
Tuesday, 02 November 2010 23:29

IT Industry - Market

There's continuing growing demand for services in the Australian video communications market, with modest growth taking the total value of the market to $52.6 million last year.

According to a report from analyst firm, Frost & Sullivan, the video communications market, including immersive telepresence, video conferencing endpoints and video conferencing infrastructure, has experienced moderate growth in Australia, 'despite many businesses being reluctant to invest in IT in 2009.'

Audrey William, ICT Research Director - Australia and New Zealand for Frost & Sullivan, said the 2009 value $52.6 million, represented growth of 3.5 per cent over the previous year, and suggested the increase, while lower than previous years, was significant 'as it is one of the few areas of IT investment during a year of otherwise cautious spending.'

'Government continues to be one of the largest video communications end-user segments in terms of revenue, with federal and state government contracts accounting for the some of the biggest wins of the year.'

William said that the professional services segment, which includes legal, accounting, hospitality and architecture firms, also reported strong demand for video solutions designed to boost productivity, and that firms in the legal and accounting segments, in particular, deployed a number of telepresence and video conferencing solutions in 2009.

According to Frost & Sullivan, new vertical market users to emerge included mining, energy and utilities, and media, and William said the report suggests that the ability to limit travel between remote geographic locations is one of the driving factors behind the growing demand for video within these segments.

'One notable change was a decline in revenue from one of the biggest adopters of video communications solutions, namely, the banking, financial services and insurance segment.  This was mainly due to a cautious approach towards any IT spending due to the impact of the global financial crisis (GFC).'

Frost & Sullivan anticipates a revival in video deployments over the next two to three years as businesses begin to re-invest in video communication to improve productivity and reduce travel. The report forecasts a compound annual growth rate of 15.7 per cent in the 2009 to 2016 period.

'Polycom and Tandberg dominated the Australian market in 2009, together accounting for nearly 80 per cent of overall market share. Among the other vendors, Cisco grew strongly, buoyed by major wins in the government and corporate segments. LifeSize also began to gain customer mindshare as a provider of low cost high definition video conferencing solutions,' William said.

William also reports that the major channel partners were the two carriers, Telstra and Optus-Alphawest, and large-scale systems integrator, Dimension Data, with other notable channel partners with specific strengths in audio-video or vertical markets included iVision and Rutledge Engineering.

One area of opportunity highlighted in the Frost & Sullivan report is the managed services segment. 'Although there is a strong preference among businesses to manage video maintenance tasks in-house, the complexity of running an immersive telepresence solution, combined with the increasing affordability of such solutions through bundled offerings, is expected to deliver an increased demand for managed services suppliers in the years ahead,' William said.