Posted by Kathleen S on Mon, Jan 04, 2010 @ 09:07 AM
Even as the economy is trying to right itself toward a recovery, companies are still making decisions that will ensure financial strength into 2010. As a result, travel expense reduction continues to be a key budget initiative, while productivity remains a priority. For global markets, how does a company effectively balance the two?
Frost & Sullivan recently examined this phenomenon in the European market and found that hosted web conferencing services continue to be a focus tool as companies seek significant reductions in their capital expenditure (CAPEX). This has spurred strong growth across the enterprise communication sector.
European Hosted Web Conferencing Services Market, a report from Frost & Sullivan, found that the market earned revenues of $162.6 million in 2008 and estimates it will reach $657.1 million in 2014. The compound annual growth rate (CAGR) is projected at 26.2 percent.
Research Analyst Iwona Petruczynik said in a company release, "The global recession and stringent environmental laws introduced by the European Parliament in 2008 are driving organizations to reduce their travel expenses and comply with 'green' policies. Web conferencing services certainly help in achieving these objectives."
Web Conferencing Awareness Grows
In terms of hosted solutions, this segment grew at 14.9 percent from 2007 to 2008 as a result of the growing awareness of the value of web conferencing and a greater penetration throughout vertical, small and medium businesses (SMBs). A high demand for web conferencing services is likely in Germany, France and the United Kingdom due to high awareness of the tool, well-developed infrastructures and the presence of several global companies.
Traditionally, the perception among companies has been that web conferencing is difficult to use or expensive to implement. This perception kept many SMBs believing that web conferencing was out of their reach as a collaboration tool and stunted the growth rate in this sector. New integrated solutions now entering the market are changing the game, making web conferencing more affordable and within reach.
Challenges Remain
In the European market, continued globalization and the continued drive for virtualization are both boosting the growth of web conferencing services. At the same time, this market is also facing specific challenges, including intensifying competition, increasing price pressures and the general low awareness of web conferencing services.
"The entry of big, global web conferencing services vendors such as Cisco and Microsoft into the European market is likely to threaten the smaller regional participants," added Petruczynik. " These local independent providers are responding by offering more competitively priced services which, in turn, will impel the larger vendors to lower prices."
While price will play a role in selecting the preferred provider for web conferencing solutions, those companies who can deliver the best value in conferencing solutions will enjoy strong market performance.
