IDC reports that video conferencing revenue fell 2.6% in 2012. Telepresence revenues were down by 33% in the same period: they have been falling since 2010.
While 2010-style video conferencing seduced us into believing that the enterprise market was demanding a premium service, the demand in 2013 seems to be coming from cloud-based applications and a best-effort model. OTT video provider Blue Jeans Network is fond of pointing out that there are 200 million minutes of video conferencing every year - but 100 billion minutes of audio teleconferences. If you’re selling network, you might prefer the first category. If you really want to change working patterns and create a mass market, you might want to provide video to users of the sec ond category.
Joining a Blue Jeans video conference means not caring about the system used at the other end: click on the link that the meeting leader emailed to you, download the browser-based extension, and connect to the remote system. It works whether you’re connecting with Cisco, Polycom, Microsoft Lync (added in February 2013) or Skype, because Blue Jeans handles the interoperability problems in its servers. Therefore anyone with a browser can connect to almost any videoconference. By providing its “video dialtone” in a browser, Blue Jeans claims an addressable market of 2.3 billion users.
Interoperability standards, which the video conferencing market tried to live without for many years, are now in vogue. We know this, because there are consortia. In 2011 the telecoms industry established the Open Visual Communications Consortium (OVCC). Cisco Systems, AT&T, Verizon Wireless and Polycom among others are working to establish overdue interoperability standards. Trials are ongoing. Then there’s the Telepresence Interoperability Protocol (TIP), created and handed to the International Multimedia Teleconferencing Consortium (IMTC) by Cisco in 2010.
Blue Jeans, which claims that its business is growing 50% per quarter, is indifferent whether the OVCC succeeds or not. “It is good for the industry for people to work on standards, but standards are the slowest path to interoperability,” says Stu Aaron, chief commercial officer of Blue Jeans Network.
Aaron claims that his employer is “more friend than foe” for network providers, but he describes the sort of service they would provide as “Local language first level support and integrated billing”. It’s not quite reducing the carrier to a data pipe, but it is not far off. For example, Deutsche Telekom (DT) provides Blue Jeans videoconferencing through its VideoMeet service (“one of the results of Telekom’s innovation through partnership strategy”, as DT explained it at the time). DT sought out Blue Jeans early, in 2011, but it’s a marketing and billing agreement, with no enhancement to the network quality that users could get through Blue Jeans itself.
“The landscape is changing,” Aaron says, “the SPs traditionally had a capital intensive model, where they would build and roll out a service and manage the margin. Small upstart providers like us just do something, and then SPs provide it with first level support. That means a faster time to market, and a higher margin on services.”
Blue Jeans Network works with business software application developers, rather than network providers, to improve its service. Aaron argues that solving interoperability alone does not create a business case for video. Rather than provide classes of service or QoS guarantees, Blue Jeans first wants to improve the integration with apps like Saleforce.com or Microsoft Lync. “There’s a lot of value above business connectivity. There’s presentation sharing, document integration and collaboration, integration with applications. A lot of what we do is simply driving more value into business apps,” Aaron says.
IDC predicts that the video conferencing market will rebound in 2013. Yet by the time that enterprise customers reconsider proposals for room-based or immersive systems, thousands of their employees will be familiar with cloud-based “good enough” video calls from Salesforce.com, Microsoft Lync, Skype or Google Apps.
“A couple of year ago we were all being brainwashed by Cisco that unless it was immersive it was no good. But Skype proved the opposite,” Aaron says, “There are a lot of people trying to build a premium service. We are not a premium service: we are a viable enterprise service.”
