The business case for video conference technology just got easier

Use cases for video conference technology have transformed recently, as the software-as-a-service model provides greater flexibility, lower cost of ownership and easier deployments.

Video conferencing has been a viable option for many organizations for about 20 years, but few companies use it on a regular basis. Even if organizations embrace video conference technology, they typically have a limited rollout, primarily to connect larger offices and for executive management use.

Historically, video conference technology has been sold as a travel replacement, alleviating travel costs and the wear and tear on senior executives. This sales strategy, however, has failed for several reasons: Many people see travel as a perk to their jobs, video conference technology was considered inferior to face-to-face meetings and companies did a poor job of promoting the technology internally. As a result, potential users bypassed video conferencing as they left for the airport.

Additionally, and most importantly, many organizations struggled to find other companies to communicate with in their supply chain. So, until recently, most video communications were for internal use.

As video conference technology improves, so does the business case

So, why is video conferencing worth investing in now when it previously had such limited deployment? In the last few years, several technologies have had a dramatic effect on video conferencing, which suggests explosive growth in the sector.

For example, the internet's quality and ubiquity have improved, so video conferencing is practical without major network upgrades. For most use cases, standard broadband IP connections are sufficient for video conferencing. Rarely do enterprises need to install technologies such as MPLS or dedicated IP connections.

Smartphones, tablets and laptops can also run high-quality video communications. Every iPhone, for instance, has FaceTime built in. Although it's limited, FaceTime is available to all users and fosters familiarity, which helps users understand the power of visual communications and makes them comfortable using it.

Software as a service (SaaS) delivery of video services dramatically lowers the complexity and cost of initiating a video conferencing environment. All the growth in the video conferencing market in the past couple years has come from SaaS suppliers.

Costs drop, availability on the rise

Customers can either install video conference technology themselves in their own environment, or pick a supplier who can host the infrastructure as a SaaS model. Due to security or other requirements, some customers will opt for on-premises systems.

Most greenfield sites for visual communications are embracing the SaaS model. The increased flexibility, lower cost of ownership and ease of deployment are enabling customers to install the technology at a rate and in a manner previously impossible.

Video conferencing is poised to transform from a niche tool based in boardrooms to an everyday tool for entire organizations.

Much of the market is moving away from hardware-based endpoints in meeting rooms. Instead, users are using PCs coupled with high-quality webcam-type technology. These devices, considered oversized webcams, can pan, tilt and zoom, and are often equipped with microphones and speakers. Such low-cost, add-on devices enable flexibility and mass deployment, and are well-suited for smaller meeting rooms.

Video conferencing is a classic example of the power of the network effect. As more users embrace the technology and the number of potential participants increases, the power of the network increases exponentially. For much of its history, video conferencing has had a relatively small number of users -- this is changing fast, and all users are benefitting as a result.

Moving from internal to external participants

On-premises video conferencing encouraged a product best suited for internal communications. Getting a call to connect between two organizations' networks was complicated, and most users did not want to deal with that hassle.

SaaS has changed this approach. It is as simple to dial a customer or supplier using SaaS technology as it is to dial users within your organization. This transforms the use cases and empowers users to use visual communications in all aspects of their business.

As these technologies converge to enable mass deployment of visual communications, a wide variety of services and business models have also emerged. With so many players in this market, some vendors will likely fail and many others will consolidate.

The video conferencing market is at an inflection point. In the coming years, it's poised to transform from a niche tool based in boardrooms to an everyday communications tool for entire organizations. Many different technologies and business models are being tested, not all will succeed. As a result, enterprises should look for the most flexible service possible and not get locked into any one path. Each enterprise needs to determine its own business case for video conferencing.

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