Business spending on telepresence is poised for a massive increase as enterprises across the world continue to focus on cost-cutting and productivity.
The market for telepresence in APAC is growing at a CAGR of over 50% for the period 2008-2013 and is expected to reach $300 million (€205 million) the by end of 2013, excluding services. That represents a CAGR of nearly 25%.
The growth rate in India is in pace with that of its neighbors, with spending expected to reach $70 million by end of 2013.
While Cisco and Polycom are contending for the lion's share of the market, a number of new players have emerged in response to the opportunities in emerging markets.
Most vendors have something common in their go to market strategy – a vertical approach. Healthcare, public sector, education, financial services and high-tech are a few of the most targeted verticals. Tavess believes the targeted approach, if well supported by for-the-industry offerings, will help vendors make quick inroads.
Tavess believes that telepresence is an expensive proposition which limits the systems to a very high end niche. Further, we observe that most players target large enterprises due to the obvious affordability factor and relevance from a travel perspective, but the potential of the growing small-to-medium business (SMB) segment is often overlooked despite standing relevance from cost-control perspective. With an average list price of $300,000, cost is a concern in emerging markets like India.
In our view, ‘Telepresence-as-a-Service’ (TaaS) will be attractive not only in emerging markets but everywhere. Over time, TaaS can exceed traditional installations in both count and revenue. Few vendors are working on this already. One exception is VADS in partnership with Cisco in Malaysia, which are offering three- or five-year contract options.
Another example is the Cisco-Tata network of public telepresence meeting suites, mainly in the UK and USA, and many coming around the world including emerging countries like India.
These are available for business users and consumers for hourly bookings. Cisco and Tata have public telepresence sites at the Taj hotels in London and Boston, targeted at travelling business-users, at rates ranging $299 to $899 an hour.
Tavess notes that Cisco alone has over a hundred public telepresence suites and expects this count to multiply in the years ahead. Another vendor addressing the SMB opportunity is Vu Telepresence, with a low cost HD solution for SMBs designed to meet the three key constraints that stand to be alleviated through telepresence: lack of specialized IT resources, tight budgets, and limited bandwidth.
Giving a touch of telepresence to unified communications is an opportunity vendors can address by making UC interoperability a reality. Citrix is doing just that – giving its GoToMeeting a telepresence touch, a very recent development.
A seismic shift is expected in the way businesses - and even consumers - communicate and collaborate. The consumer market for telepresence cannot be ignored. While mega installations may not be frequently expected, public-suites can be attractive to consumers living far from family and friends.
Taking it home, last year, Cisco introduced a consumer edition of telepresence - ūmi -, which connects to HD televisions and a broadband internet connection, at a retail price of $499 with a monthly fee of $24.99 for unlimited calls.
While it may be argued that it is priced high to sell as a home commodity, there is no question that, with time, more options and competition against Cisco’s ūmi will emerge – and this can even replace traditional home/consumer-communications in the future.
Keerthi Chandan is senior analyst for ICT markets at Tavess. For more information contact: [email protected] or visit www.tavess.com/