Annual Market Study – 2010 Market Sizing & Forecast · cell phone, or IP-based softphone to a...

Annual Market Study – 2010 Market Sizing & Forecast

Audio and Web Conferencing, Instant Messaging / Presence, and Team Workspace Infrastructure Products

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Annual Market Study – 2010 Market Sizing & Forecast: Audio and Web Conferencing, Instant Messaging / Presence, and Team Workspace Infrastructure Products

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Annual Market Study – 2010 Market Sizing & Forecast

Audio and Web Conferencing, Instant Messaging / Presence, & Team Workspace Infrastructure Products

December 2010

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Publication No. RE-RMC10-V1

Annual Market Segment Study: Audio and Web Conferencing, Instant Messaging / Presence, & Team Workspace Infrastructure Products

Page - 2 Copyright 2010 Wainhouse Research LLC

About the Author Andy Nilssen is a Senior Analyst & Partner at Wainhouse Research, LLC, where he is a consultant to rich media conferencing vendors, end users, government agencies, and venture capitalists. Andy's primary focus is on audio conferencing, web conferencing, IM/Presence, and team workspace solutions. Prior to WR, Andy held various management positions in product marketing, new business development, and market research at PictureTel Corporation. Andy was also Vice President of Marketing at Visual Technology, a maker of IP-based network terminals, and Product Line Manager of entry SPARC workstations at Sun Microsystems. Andy has over 30 years of experience in high-technology product marketing and market research, earned his BSEE and MBA degrees from the University of New Hampshire, and holds two ease-of-use related patents.

About Wainhouse Research Wainhouse Research is an independent market research firm focused on critical issues in IP communications. The company conducts research studies, provides strategy advice to vendors and end users, publishes a variety of reports, white papers, and a free newsletter, and organizes conferences on collaboration and conferencing solutions. Visit www.wainhouse.com for more information.

COPYRIGHT NOTICE Copyright 2010 by Wainhouse Research, LLC. All rights, including that of translation into other languages are specifically reserved. No part of this publication may be reproduced in any form, stored in a retrieval system, or transmitted by any method or means, electrical, mechanical, photographic, or otherwise, without the express written permission of Wainhouse Research, 34 Duck Hill Terrace Duxbury, MA 02332 (Tel 781-934- 6165) www.wainhouse.com. NOTE: The material presented in this report is based on both primary and secondary market data coupled with our professional interpretation of the facts. We believe that the basic information and recommendations presented in this study provide a basis for sound business decisions, but no warranty as to completeness or accuracy is implied. All market estimates and forecasts are those of the authors, except as noted. We welcome your comments on this report.

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Copyright 2010 Wainhouse Research LLC Page - 3

Table of Contents Chapter 1 – Executive Summary .............................................................................................. 5

The Conferencing Infrastructure Market ......................................................................... 6 Forecast Summary .......................................................................................................... 8 Suppliers Covered ........................................................................................................ 11

Chapter 2 – Industry Overview .............................................................................................. 12 Market Segments .......................................................................................................... 12 Audio Conferencing Bridges ......................................................................................... 12 Web Conferencing Servers ........................................................................................... 15 IM / Presence Servers ................................................................................................... 17 Team Workspaces ........................................................................................................ 18 Media Servers ............................................................................................................... 19 Deployment Options ..................................................................................................... 22 Twelve Drivers Shaping the Future of Audio & Web Conferencing & Collaboration ..... 24

Chapter 3 – Ten Significant Leaders, Twenty Four Influencers and Contenders ................ 27 Adobe ........................................................................................................................... 27 Avaya ........................................................................................................................... 29 Cisco Systems .............................................................................................................. 32 Compunetix .................................................................................................................. 35 IBM Lotus Software ..................................................................................................... 38 Microsoft ...................................................................................................................... 40 Novell .......................................................................................................................... 43 OpenText...................................................................................................................... 45 RadiSys ........................................................................................................................ 46 Twenty Four Influencers and Contenders ...................................................................... 48

Chapter 4 – Product Market Forecast .................................................................................... 63 Market Overview .......................................................................................................... 63 Definitions .................................................................................................................... 64 General Forecast Assumptions ...................................................................................... 64 Component-Specific Assumptions ................................................................................ 66 Methodology ................................................................................................................ 68 Audio Bridges (MCU) .................................................................................................. 69 Web Conferencing Software ......................................................................................... 74 IM & Presence Software ............................................................................................... 77 Team Workspace Software ........................................................................................... 80 Forecast Summary ........................................................................................................ 82

Appendix: Vendor Listing ..................................................................................................... 83



List of Figures Figure 1 Rich Media Conferencing Market Segments .................................................................. 6 Figure 2 Summary of Audio Bridges Forecast ............................................................................. 8 Figure 3 Summary of Web Conferencing Servers Forecast .......................................................... 8 Figure 4 Summary of Instant Messaging / Presence Servers Forecast ........................................... 9 Figure 5 Summary of Team workspace Servers Forecast ............................................................. 9 Figure 6 Summary of Infrastructure Forecast ............................................................................. 10 Figure 7 Rich Media Conferencing Market Segments ................................................................ 12 Figure 8 Web conferencing with PSTN audio conferencing ....................................................... 17 Figure 9 The Virtual Team Process............................................................................................ 19 Figure 10 NGN Media Server Configuration with Conferencing (source: RadiSys) .................... 20 Figure 11 Components of an IP Media Server Platform (source: RadiSys) ................................. 21 Figure 12 Three implementations of conferencing services ........................................................ 23 Figure 13 Interrelationship between real-time and asynchronous collaboration .......................... 64 Figure 14 Audio bridge market sizing & forecast ....................................................................... 69 Figure 15 Audio bridge revenues by customer type.................................................................... 70 Figure 16 IP and PSTN audio bridge port shipments vs. ASPs ................................................... 72 Figure 17 Audio bridge ASPs and market size by port type........................................................ 72 Figure 18 Audio port shipments by market segment .................................................................. 73 Figure 19 Audio bridge market size by network type ................................................................. 73 Figure 20 Web conferencing software market sizing & forecast ................................................. 74 Figure 21 Web conferencing software forecast .......................................................................... 74 Figure 22 Web conferencing software Major Players ................................................................. 75 Figure 23 Web conferencing software ASPs .............................................................................. 76 Figure 24 IM & presence software market sizing & forecast ...................................................... 77 Figure 25 IM / Presence software Major Players ........................................................................ 78 Figure 26 IM / Presence software revenue forecast .................................................................... 78 Figure 27 IM & Presence server ASPs ....................................................................................... 79 Figure 28 TWS Software Major Players .................................................................................... 81 Figure 29 Team Workspaces market sizing & forecast ............................................................... 81 Figure 30 Team Workspaces software revenue forecast ............................................................. 81 Figure 31 Conferencing Infrastructure Products Forecast Summary ........................................... 82 Figure 32 Conferencing Infrastructure Products Forecast Revenues ........................................... 82



Chapter 1 – Executive Summary The year 2009 continued the trend of what has been a series of strong growth years for the rich media conferencing infrastructure products covered in this report – despite facing a period of economic turmoil and limited IT spending. The marketplace truly responded with their wallets that these offerings are worthy of continued investment even in an economy that was bottoming out – no doubt expecting a return on travel cost savings and increased productivity. WR expects strong demand to continue for the short term, but believes revenue growth in particular will slow over the five year forecast covered in this report. The conferencing and collaboration market has multiple tailwinds propelling it along, and it appears that the economic turmoil that was threatening growth just a year ago is mitigating as the worldwide economy slowly recovers, unemployment bottoms out, consumers regain confidence, and IT spending increases. As explained in detail elsewhere in this report, we have identified twelve drivers that are forcing corporate, government, and educational institutions to look at audio/web conferencing, unified communications, and team collaboration solutions with greater interest than ever before: Globalization The Emergence of Virtual Businesses Re-thinking the Sales Function Continuous Product Improvement The Push from the Big Boys – Microsoft, IBM, & Cisco The Advent of Unified Communications IP Networks Mobility New Generation of Workers Disruptions to travel thru man-made and natural calamities Emerging from the worldwide recession / dealing with rising energy costs Climate change concerns

Balanced against these forces driving industry growth, economic forces include: Slow macro-economic recovery, with limited growth in IT budgets Frail consumer confidence, causing enterprises to monitor their spending High but slowly rebounding unemployment High but stable energy costs that have become a permanent cost to deal with

Businesses of all sizes are being forced to wrestle with the value of conferencing and collaboration solutions as a vehicle that can help catalyze the above forces – and thus justify continued investment in this area despite limited budgets. There is some good news: if the spending in 2009 is any indication, investing in these technologies is truly considered as part of the cure.



The Conferencing Infrastructure Market Our model of the conferencing and collaboration market continues to evolve, although we maintain our four-level structure with the first three levels corresponding to market research found in WR research reports. The four market segments covered in this report are shown as sub-segments of “Infrastructure” in the diagram below

Videoconferencing

Streaming

Web Collaboration

Audio Conferencing

IM / Presence

Enterprise Group

Enterprise Personal

Consumer

Call MgmtDevice Mgmt

Network MgmtDirectories

Scheduling & BillingServer Hosting

MultipointGatewayNetwork

IM / Presence Server

GatewayGatekeeper / PBX

MCU / BridgeNAT / Firewall

Applications

Web Conf ServerManaged Services

IP Telephony

VoIP

Verticals

Videoconferencing

Streaming

Web Collaboration

Audio Conferencing

IM / Presence

Enterprise Group

Enterprise Personal

Consumer

Call MgmtDevice Mgmt

Network MgmtDirectories

Scheduling & BillingServer Hosting

MultipointGatewayNetwork

Gateways & Gatekeepers

Video MCUs

VideoConferencing

Services

Applications

Managed Services

Infrastructure

IP Telephony

VoIP

Verticals

IM / Presence ServerAudio Bridges

Web Conf ServerTeam Workspace Server

Figure 1 Rich Media Conferencing Market Segments

Audio conferencing bridges A network infrastructure device that connects two or more participants that are using a telephone, cell phone, or IP-based softphone to a multiparty audio conversation. The audio conferencing bridge is typically a reserved resource that establishes the call (participants either call in or the bridge calls out), handles mixing the audio stream and muting, and keeps track of the minutes used for billing purposes. Audio bridges can interface to the phone network via a traditional analog “TDM” connection from a Telco carrier, or increasingly via an IP connection that can be provided by an IP-based network carrier or through an IP gateway to a TDM connection. While audio bridges traditionally consist of specialized hardware, they are increasingly becoming software-driven devices that can run on industry-standard PC server platforms with capacity that scales as the power of PC server platforms increase.



Web conferencing servers A network server that connect two or more participants to a real-time, multiparty graphics / data sharing session increasingly accompanied by PC-based VoIP audio and desktop video conferencing. Participants typically connect using a personal computer and a web browser, though connections using portable devices such as smart phones are increasingly supported. Most web conferencing servers are sold as software that runs on an industry standard server platform (though some are sold as hardware appliances); the server is then connected to either a corporate intranet or the public Internet.

Instant messaging (IM) and presence servers A network server that captures and displays the availability of people (or devices), and can establish real-time, text-based conversations between them. Participants typically connect using a custom software client that is running on a PC or mobile device, though connecting via a web browser is usually possible as well. Presence servers are sold as software that runs on industry-standard server platforms; the servers are then connected to either a corporate intranet or the public Internet. Presence servers increasingly can “federate” with other presence servers and the big-three public IM services (AOL, Yahoo, MSN) to increase the number of people that can be contacted. Presence information can also be integrated into applications such as team workspaces and productivity software via software API’s, and some of the more sophisticated presence servers can escalate IM sessions to audio and web conferences.

Team workspace servers A network server that provides a convenient virtual place to organize and store information and foster communication between members. Unlike the other three categories, team workspaces is an asynchronous (non real-time) technology, but is increasingly becoming of interest to the collaboration market through tighter integration with real-time conferencing and presence systems. Users connect to team workspaces using a PC and web browser or, in some cases, a custom client. While traditionally the need for team workspaces was provided by document management systems, new lighter-weight systems that focus on the specific features needed to foster on-line team collaboration and integrate with real-time communications systems have emerged.



Forecast Summary Audio Conferencing Bridges: After 5 years of strong growth (capped off with close to 19% revenue growth 2008 to 2009), we believe overall revenue peaked in 2009 and will stabilize over the forecast period despite growth in port shipments as the price per port decreases due to a number of factors (details in the forecast chapter), resulting in a 5-year revenue CAGR of -0.3%.

2009 2010 2011 2012 2013 2014 2015

Audio Bridge Revenues ($M)

Service Providers Enterprises

Figure 2 Summary of Audio Bridges Forecast Web Conferencing Servers: Revenue growth will continue to be robust through the first years of the forecast, then stabilize as price per user decreases and the rate of acquiring new use seats slows, resulting in a 5-year revenue CAGR of 5.0%.

2009 2010 2011 2012 2013 2014 2015

Web Conferencing Software Forecast

New user revenue $M Renewal & Maintenance $M Users M

Figure 3 Summary of Web Conferencing Servers Forecast



IM/Presence Servers: Revenue growth will be robust throughout the forecast, as the price per user remains stable (due to an increasing feature set) and the rate of acquiring new user seats remains brisk, resulting in a 5-year revenue CAGR of 17.7%.

2009 2010 2011 2012 2013 2014 2015

IM / Presence Software Forecast

New user revenue $M Renewal & Maintenance $M Users M

Figure 4 Summary of Instant Messaging / Presence Servers Forecast

Team Workspace Servers: Revenue growth will be very robust through the first few years of the forecast as the market is going through a stage of rapid adoption, then slow in the remaining years, resulting in a 5-year revenue CAGR of 10.6%.

2009 2010 2011 2012 2013 2014 2015

Team Workspace Software Revenue Forecast ($M)

Figure 5 Summary of Team workspace Servers Forecast



Overall, we forecast that the conferencing and collaboration infrastructure product segments covered in this report will grow from $1.8B in 2010 to over $2.8B in 2015, resulting in a 5-year revenue CAGR of 9.6%.

2009 2010 2011 2012 2013 2014 2015

Infrastructure Revenue Forecast ($M)

Audio Bridges Web Conf. Software

IM & Presence Software Team Workspace Software

Figure 6 Summary of Infrastructure Forecast NOTE: All graphs display Y-axis scale values in the purchased report



Suppliers Covered This report provides a short overview and analysis of the following ten significant leaders in the industry as measured by their market shares or as deemed by Wainhouse Research because of the supplier’s vision or emerging technology capabilities.

Adobe Avaya Cisco Systems Compunetix Dialogic IBM Lotus Software Microsoft Novell OpenText Radisys

In addition, this report provides a short synopsis for each of the following twenty-four Influencers and Contenders.

Alfresco Aonta Technologies AT&T Connect Audiocodes Metaswitch Networks (formerly DCL) Dimdim Elluminate EMC Documentum (eRoom) Forum Communication Systems, Inc iLinc Communications Indosoft Metaswitch Networks Mitel

Movius Interactive NetViewer Oracle Corporation Persony Polycom RHUB Communications Saba Centra Siemens Enterprise Communications SMART Technologies Sonexis Traction Software Vail Systems Wyde Voice

Appendix 1 of this report contains an exhaustive list of 100+ suppliers that we track in this space.

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