Software and cloud-centric solutions have driven the video conferencing industry to morph significantly. Companies that have innovated at a fast pace are growing while others are becoming less relevant.

As video conferencing becomes 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 lead to a fast changing market. In H1 2018 user demand for video conferencing endpoints continued to expand. Unit shipments of endpoints grew by 14.1 percent over H1 2017, the highest in four years. The arrival of all-in-one collaboration boards/interactive digital whiteboards is providing a much needed boost to end points growth.

The consumerization of video has led to an exploding demand for simple and hassle-free video conferencing that allows users to connect with anyone from any device and location with a click of a button. Vendors enabling these simple and compelling user experiences are winning. Many technology vendors are reaping the benefits of the exponential growth in user demand for video. At the same time they are facing new challenge. The total spend per user is expected to decline even as overall usage and quality of experience is expected to improve. Moreover, as technological breakthroughs accelerate, new providers are entering the market with innovative business models and technologies, leaving existing providers to wonder whether they will be displaced.

The shift to cloud continues to negatively impact video conferencing infrastructure revenue along with declining on-premises investments. Growing virtualization and software-based solutions have led to declining price points further straining revenue growth for infrastructure systems. Revenue for the total market is forecast to remain in low single digits due to shifting market dynamics. Revenue for the total market is forecast to remain in low single digits due to shifting market dynamics. The total market is forecast to grow at a compound annual growth rate (CAGR) of 3.5 percent from 2018 to 2023 to reach $2.7 billion. Endpoints unit shipments CAGR will remain healthy with rapid adoption coming from next-generation devices in huddle rooms and open meeting spaces.

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: Vaishno Devi Srinivasan