Cutting costs through conferencing

Roopam Jain, Principal Analyst for Unified Communications at Frost & Sullivan, explains how communication technologies are helping companies to weather the tough economic storm.

Economic conditions around the globe and rising environmental concerns are creating a groundswell in demand for collaboration. As organisations look at ways to survive during the recession, cost control is becoming top of mind. To fight the economic headwinds, several businesses have put strict travel mandates in place. Business travel has already experienced the biggest nosedive in five years (source: The International Air Transport Assocation). While fuel prices have come down significantly over the last few months, a bigger push to reduce travel costs and a sustainable interest in reducing carbon footprint means people are looking to communicate and collaborate by alternative means.

A high growth industry

Conferencing technologies have received increasing attention over the past few weeks and months. Revenues from conferencing systems and services, a US$6.6 billion industry, are forecast to reach US$11.9 billion in five years. The overall collaboration industry has received a boost from recent macro environment factors - globalisation, ongoing recession, rise in remote workers. Use of conferencing can have a direct impact on reducing travel costs while increasing efficiency. Implementing solutions such as web conferencing, video conferencing and telepresence allows people to hold meetings in real time over IP networks letting them share data, PowerPoint slides, live video, and audio. 

The new breed of web and video conferencing tools now offer improved price performance while delivering a high quality experience that includes high definition video, live chat, and rich multimedia experience. Telepresence, considered the high end of the conferencing market, offers an immersive visual communications room where participants can have eye-to-eye contact through use of multiple large video screens and careful design and implementation of furniture and critical audio video sub systems. Cisco and HP are positioning telepresence as the wave of the future pouring millions of dollars in development and marketing.

Attractive ROI offered by the current crop of conferencing tools will serve as a big driver. Audio, web and video conferencing usage is expected to go up as a result of massive layoffs and hiring freeze that will require workers to do more with less, an area where conferencing and collaboration investments are immediately justified. As IT budgets across enterprises of all sizes get slashed in preparation for a tough 2009, conferencing may be a business that will help ride through the economic downturn, bringing identifiable cost savings to companies who deploy it.

Going green is big

Besides the economic downturn, another factor that has thrown the limelight on conferencing is green initiatives. Environmental, social and good governance policies are driving end users as well as IT to have a big focus on adopting green products. While green is not a new subject, the amount of attention it has received throughout this year is unprecedented. The green movement is having a viral effect with companies making new announcements to increase their commitment to green, nearly every day. Concerted efforts in the future to reduce dependence on foreign oil and increasing energy efficiency will continue to bring forth the advantages of using conferencing by traveling less, working remotely, and reducing pollution. 

Conferencing and collaboration vendors are banking big on the bottom line impact the technology makes on environmental benefits. The combined effects of vendors pushing the green benefits and the impending arrival of regulations for energy requirements is making this a hot topic for corporate governance and for end users that want to proactively contribute to the environment. However, the label 'green IT' can become hyped and overused by vendors as a way to push new products and services. 'Greenwashing' will become a concern among users. Customers will keep an eye on companies that are not walking the walk and talking the talk.

Since joining Frost & Sullivan in August 1999, Roopam Jain has completed several research studies and consulting projects on audio, web and video conferencing markets. She also tracks developments in the fast evolving Unified Communications market and its impact on real time collaboration. Jain has received acclaim for her research through articles and quotes published in Business Week, CIO, CNN Money, Dow Jones News Service, InfoWorld, IT Week, Network World, Newsweek, PC World, USA Today, and Wall Street Journal.