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Enterprise Equipment: Audio-Video Conferencing: All Round Growth

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VoicenData Bureau
New Update

Over the years, the Indian conferencing market has come a long way. From the

early days of low-cost, vanilla audio conferencing the market has moved ahead

and diversified into newer offerings such as video, and now real presence

teleconferencing, catering to diverse segments of the enterprise. The country's

video-conferencing endpoints market has seen phenomenal growth year-on-year,

mainly because of a government-led program to develop an Internet protocol

infrastructure. This has resulted in increased availability of broadband, and a

significant reduction in communication costs.

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The conferencing market is moving toward higher quality products such as high

definition conferencing and telepresence. It is relatively new phenomenon of

video communication that enables users to be able to communicate and collaborate

in a virtual environment, giving an almost real experience.

The growth of the overall Asia Pacific videoconferencing endpoints markets is

expected to be led by the corporate sector, where converged voice, data, and

video solutions are likely to have their strongest appeal, primarily as

productivity tools for knowledge workers. According to VOICE&DATA estimates, the

total market for audio-video conferencing products and solutions during 2006-07

was Rs 100 crore. In terms of units, 4,000 videoconferencing units were sold.

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The Players



Polycom continued to enjoy the leadership position with about 50% market share,
and total revenue of Rs 50 crore. In the audio conferencing market, Polycom has

91% market share. Over the years, Polycom has forged major distribution

alliances with Bharti Teletech in FY 2006-07, with an aggressive focus on the

Indian market. Government verticals contributed hugely to Polycom's revenue.

Polycom has also aligned its channel and distribution strategy to reach out to

the SMB and SOHO segments.

It made efforts to increase its presence from sixteen cities to thirty-two

cities targeting the SOHO segment. It also strengthened its distribution

partnership, and devised a retail strategy to increase its presence in the

country.

In FY 2006-07, European vendor Tandberg stood at second place with 24% market

share, and revenue of Rs 24 crore. Italian conferencing giant Aethra

Telecomunicazioni made substantial inroads into the market, clocking a revenue

of 14 crore. It was able to garner 14% market share. It has distribution

alliance with Siemens wants to expand its clientele across the spectrum from the

entry level to advanced level at affordable prices. Aethra has significant share

in the banking segment, and for the next year it is expecting significant

results in the government verticals such as NIC, NHAI, defense etc. It aims for

40% of the Indian market share, and plans to introduce new product range in

India. Revenue of other players such as Sony, and Vcon could not cross the

single digit mark. Avaya, which markets Polycom, and Sony earned Rs 39 crore in

revenue in this fiscal.

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Latest Arrivals



This year, two major players are entering the Indian market, the most
significant being Cisco. Cisco has introduced, telepresence meeting solution,

which offers life-size images of meeting participants, high-definition video

(1,080 pixel), and spatial audio. The full-duplex near-zero latency allows users

to communicate in real time. Cisco has recently acquired Webex, and Latitude,

which provides additional know-how of a very competitive market. Cisco's

telepresence solution is generating a lot of interest in the market, and it has

already got few big orders. The latest entrant in the market is Lifesize, which

has got high definition videoconferencing endpoints. It has a tie-up with

Radvision for MCUs. In August 2006, it established its subsidiary in India, and

also announced engineering operation in Bangalore. The Bangalore design center

focuses on software development, and contributes to engineering efforts across

the company's high definition video product line.



















The Top Players (FY '06-07)

Rank

Companies

Revenues (in Rs crore)

Growth(in %age)

FY '05-06

FY '06-07

1

Polycom

34

50

47.1

2

Tandberg

20

24

20.0

3

Aethra

10

14

40.0

4

Others

10

12

20.0

Total

74

100

35.1

Others includes Radvision, Cisco, Sony, Vicon, Samsung and

Codian

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The Buyers



The traditional buyers are the corporates, especially the IT and ITeS
segment. But, now the conferencing market has diversified into different other

areas. The most important buyer for conferencing solutions are service providers

(Reliance, Bharti, and VSNL), who are into providing videoconferencing services

along with the bandwidth. The BFSI segment aggressively invested in conferencing

solutions in FY 2006-07. Major buyers were RBI, UCO Bank, Indian Bank, Canara

Bank, Punjab National Bank, SBI, and Syndicate Bank. And cost savings. Another

major vertical which pushed up the conferencing market this fiscal, was

pharmaceutical companies. Like banks, pharma companies have very wide

operations, propelling the demand for conferencing solutions.

Educational institutes are increasingly becoming a major area for solution

providers. Increased cost of education, and demand for doorstep service in

education have led to a boom in distance learning, resulting in adoption of

conferencing solutions in the sector. Telemedicine also saw a lot of interest in

it. Shortage of doctors, high specialization needs, high cost of medical care,

and remoteness of patients have led to the booming market of telemedicine in

developed countries, which is increasingly being outsourced to countries like

India. This has resulted in increased demand for conferencing solutions. On the

domestic front India is facing a problem in providing medical care to the

masses, particularly in far-flung areas. Now, with the increased availability of

broadband services even in smaller towns and cities, it has become possible to

provide telemedicine services to these remote areas. The government and private

hospitals are contemplating the idea of providing these services to offer better

and specialized health care facilities to patients.

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Defense vertical has also invested in conferencing solutions. Increasingly,

service providers are focusing on this vertical. Need for real time

communication between command and frontline force has led to this, and we will

see increasing interest for future deployment of conferencing solutions.

The latest and expanding buyers are the state governments that are building

their SWANs (State Wide Area Network). With increasing interest and pressure on

the various state governments to provide transparent and efficient

administration, they are aggressively investing in e-Governance.

IP has made it possible to extend communication privileges to

every nook and corner of the world

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Bright Future Ahead



Globalization is happening fast, and communication technologies are
helping to eradicate geographical boundaries. Video is gaining importance due to

cross-cultural engagement between employees and organizations. As convergence

brings voice, data, and video onto the same network, new technologies are

rewriting the rules of collaboration. In the past, videoconferences, in

particular, have been difficult to set up, challenging to use, and frequently

unsatisfying in its ability to replicate in-person meetings. To improve this

situation, companies are working on new technology that delivers a unique,

in-person experience over the converged network. In the coming years, cost of

ownership will reduce, maintenance of infrastructure will not be a burden, and

the general perception that people had about conferencing as a luxury will

slowly be dying. Also, with the wide scale adoption of ICT technologies, we are

headed for a bright future. Globally, with the onset of 3G videoconferencing as

well as increasing popularity of software-based solutions and interest in

enhanced collaborative tools, the markets are providing vast opportunities for

growth, as videoconferencing is increasingly offered as part of the product mix

by solution providers. While developments in telemedicine, distance learning,

and e-Governance are also likely to contribute to the spread of video as part of

unified communication solutions, there is strong evidence that point-to-point,

standalone videoconferencing solutions are expected to disappear, as the shift

to IP accelerates, and vendor partnerships continue to drive the convergence

landscape. IP has made it possible to extend the communication privileges to

every nook and corner of the world. Potential applications would span across

areas like boardroom meetings, corporate conferences, high-end surgeries,

operation theaters, education and distance learning, etc. 

In terms of technology innovation, convergence and collaboration technologies

will be taking off in the coming years. More and more enterprises will move to

IP-based platforms from existing ISDN, and the need for mobility technologies

would increase.

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However, the industry faces some challenges. Though they are increasingly

being eliminated, they need more attention. Taking into account the convergence

of IT, media, telecom, and consumer electronics needs, a modern and efficient

telecommunications infrastructure should be created. Management of interface

support is another challenge. There exists number of standards; separated

communications and conferencing technologies reside on different networks and

platforms, requiring different management interfaces for support.

Standardization is yet another area of concern. Most of the communication and

collaboration technologies are proprietary platforms that did not integrate with

the existing network infrastructure. It will be important for companies to focus

on increasing the overall pie rather than just fighting for the market

available.

Nilabh Jha



nilabhj@cybermedia.co.in

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