From $100,000 to $1,000 in Just Two Years

Disruptive Video Technologies Hamper the Market, Help Enterprises

Introduction

Change is afoot in the video conferencing industry, but it’s not the change that major manufacturers have been hoping for over the years. Growth in the industry has been down since early 2012, with overall revenues down ~2% from last year and endpoint revenues down 20%+ from 2013. The revenue spike from early adopters of telepresence is tailing off. Other telling stats are available from Infonetics.

Disruptive technologies are part of the cause. Enterprise purchases of expensive infrastructure (MCUs, gateways, traffic optimizers) to host conferences are down. Emerging bridging solutions like Polycom CloudAXIS and Pexip obviate the need for six-figure bridging investments on premises. Competitive offers from cloud MCU service providers allow multiple platforms to meet in the cloud. 

The disruption due to Microsoft Lync can’t be overlooked. Many organizations with traditional video systems froze further rollouts when Microsoft announced the Lync Room System. Polycom, Crestron, and SMART’s Lync systems register and behave natively as a familiar Lync endpoint. Lync’s A/V MCU is scalable (with meetings of up to 1000), interoperable (with Polycom, LifeSize, and others), and accepted by Gartner and other analysts.

More Choices Now Available for Buyers

When selecting video solutions, enterprises now have at least five endpoint categories to consider:

1)      High end immersive telepresence system

2)      Traditional multi-codec (i.e. SIP, H.263, H.264) based room system

3)      Single codec systems optimized for a specific platform (i.e. Lync Room System)

4)      Huddle room video assemblies

5)      End-user systems (desktop, mobile, browser)

Lower costs and more choice usually means good news for enterprises. The question is: will new corporate use cases develop as a result of the advancing capabilities?

The answer is yes, there are some pockets of growth and notable trends due to advances in video tools on desktops, mobile devices, and higher end web cams.  While desktops are the most commonly used endpoint, according to a study done by Wainhouse, the two trending growth areas are in single codec systems and in huddle rooms. 

Huddle rooms are typically small 3-8 person rooms meant for ad-hoc collaboration. We are seeing them equipped with a standard flat-screen display, VGA/HDMI cable, a webcam, a USB speakerphone, and a USB hub. Users enter the room with their laptop and plug into the USB hub (to connect the camera and speakerphone to the PC) and VGA/HDMI (to display their laptop on screen). They launch a Lync meeting and start collaborating. Other enterprise Lync users join and share audio/video/content, and external attendees can join via the Lync Web App. Excluding the furniture and floor space, these small systems cost only ~$1000USD to construct, so it lowers the investment significantly. We’ve seen Jabra Speak 410s and Logitech 900s being deployed (with its wide angle lens well-suited for small rooms). The laptop controls the meeting, so IT support is rarely needed. Since many expensive video rooms end up being used for standard (non-video) meetings much of the time, the use of floor space is more efficient. Even though the webcam’s fixed lens makes for a second rate video experience compared to a traditional room system, it’s “good enough” for the situation.

Lync Room Systems (LRS) improve the A/V experience with professional grade cameras, speakers, and microphones, and a touch-screen whiteboard. Think of these units as two components in one: a high-end touch-enabled panel with USB / HDMI inputs, and a computer running (only) the Microsoft Lync 2013 client. A tablet controls meetings and allows laptops to connect for local display.  Presenters can join from their laptop and control the meeting from their machine.

LRS’s price point is less than a traditional room system, but so is the quality of the video experience. The main reason is that the cameras’ lenses are fixed, per Microsoft’s current specs. So the elite pan/tilt/zoom cameras offered by video manufacturers, such as Polycom’s Eagle Eye Director, cannot currently be used.   Along the video quality versus collaboration versus cost continuum, the categories generally align as follows (see figure to the right). The size of the bubble indicates cost.

Figure 1. Video quality to collaboration experience and cost

Lync Room System Overview

Amongst the Lync Room Systems, each has its own differentiator. 

• SMART Room System (SRS) is unique in that all components have been designed and are manufactured by SMART. Among its advantages are the ability to annotate/ink on top of any application, whereas Lync itself is limited to annotating within PowerPoint files that have been uploaded to the system. If SMART’s Meeting Pro software is running on the PCs of the remote attendees, they can share and make notes within Visio files, spreadsheets, and other apps where inking is available. 
  
  Polycom and Crestron have collaborated to merge the best of each’s offerings into their LRS.
  
  
• Polycom has traditionally had the tightest alignment with Microsoft. Their CX5100 (aka Roundtable) camera is the most unique of the available options, allowing the camera to be located on the table. For longer rooms where people plan to sit on at least three sides of the table, Polycom’s camera makes furthest participants more visible than would a fixed focus lens at the front. It should also be noted that Polycom’s Group and HDX series also integrate with Lync as a registered endpoint, allowing calls back/forth, but the UX is Polycom’s, not Microsoft’s.   
  
  
• Crestron’s differentiator is that it enables integration to existing room lighting and sound systems with the addition of their hubs and controllers.

Conclusion

Enterprises have more choices than ever. Lync Room Systems and huddle rooms will spark some new use cases for enterprises. But they shouldn’t expect a one-size fits all strategy. For instance, one end user has deployed SMART systems in multiple rooms, but deployed a Crestron in one room due to the A/V integration requirements in the room. 

While the disruptions outlined here have had a negative impact on incumbent video market growth, new strategies and use cases are emerging that will spur a recovery and finally get video into business collaboration in a big way.

Christian Stegh is the VP of Strategy at Enabling Technologies.