Software and cloud-centric solutions are driving the video conferencing industry to morph significantly. Companies that are innovating at a fast pace are growing while others are becoming less relevant. As video communications become an integral part of the digital transformation strategy, the user demand continues to expand. The impact of software-based room solutions, migration to cloud, and rapid adoption of lower priced devices including USB conference cams has led to a fast changing market.

Automation, globalization, and changing demographics are shaping the future of work. There is a growing demand for next-gen collaboration tools that fit the changing communication needs. New and innovative use cases are emerging. Video-enabled customer engagement, digital classroom, mobile and virtual banking, smart factories, digital talent acquisition, and ehealthcare are a few areas where video conferencing is fundamentally changing the face of business. In 2018, user demand for video conferencing devices continues to expand. Unit shipments of endpoints grew by 10.9 percent YoY, indicating continued market expansion. Revenue for video conferencing endpoints grew at a robust 9.4 percent YoY. Much of the growth in video conferencing has been captured by cloud providers which has increased the competitive pressures for incumbents as well as created new partnership opportunities.

The arrival of all-in-one collaboration boards is providing a much needed boost to end points growth as well as a slowdown in the ASP decline. A plethora of lower-priced solutions as well as a growing number of communication tools that offer video conferencing as a built-in feature will commoditize the market. Revenue for the total market is forecast to remain in low single digits due to shifting market dynamics. Endpoints unit shipments CAGR will remain healthy with rapid adoption coming from next-generation devices in huddle rooms and open meeting spaces.

Open offices are on the rise and businesses are looking to address workers’ need for disruption-free spaces by investing heavily in huddle rooms, phone booths, and "hybrid offices". A strong push to technology-enable the huddle spaces is creating rapid growth in demand for video conferencing. Growth in the future will be driven by a stronger adoption of video in multiple meeting environments - conference rooms, huddle rooms, open spaces, desktops, and mobile devices.

This report provides an update on market sizing, trends, forecasts, prices and market shares and offers an in-depth perspective on the dynamics of a changing market. It covers the market for video conferencing endpoints and infrastructure. It excludes conference room USB video devices; soft clients and cloud video conferencing services. Software- and cloud-based videoconferencing along with USB devices are covered in other research reports by Frost & Sullivan.

Author: Roopam Jain