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The Future of Video Conferencing

The following commentary is provided by Nefsis regarding the general outlook for business video conferencing.

Future of Video Conferencing

The Stage is Set

Business communication has come a long way since the advent of the PBX phone system and hand-written messages. The lightening speed of conducting business today requires immediate answers to problems, issues, concerns and more efficient communications overall. One missed call could mean the difference between locking in a new account or losing the deal to your competitor. Cost reduction has driven globalization, telework, outsourcing, and decentralized company structures that demand better communications infrastructure. Luckily, technology advancements have risen to the occasion. HD multipoint boardroom video conferencing, once the domain of Fortune 100 boardroom, recently became available to consumers and desktop computer users worldwide. And in the near future, video conferencing will take its rightful place next to phone, FAX and email as an essential business tool.

Before looking at the future, let's take a quick look at the past. Boardroom video conferencing systems have been around for decades. These were primarily hardware devices, connected in pairs, over multiple leased telephone lines. They evolved and later used standard network connections, though still in matched pairs over "fixed routes" or in groups using highly specialized video switching equipment. The task of digitizing video was so computationally intense, that these devices used dedicated processors for video encoding, decoding, and transmission.

Moore's Law Catches Up to Video Conferencing Hardware

That was the past. Today, Moore's Law recently caught up with the video conferencing industry. A desktop computer with an Intel Pentium processor is far more powerful than the video encoders and decoders (codecs) of the 1980s and 1990s. Today's PC is not only more powerful, but virtually all business computers ship with dual-core, quad-core and eight-core+ processors and multimedia processor extensions. This dramatically increases the ability of everyday computers to process multiparty video, digital audio (VoIP), and live sharing data.

It has been more than 40 years since Intel co-founder Gordon Moore made his now-famous observation. In the April 19, 1965 issue of Electronics magazine, Moore stated that innovations in technology would allow a doubling of the number of transistors in a given space every year and that the speed of those transistors would increase. About 10 years later, Moore adjusted the rate to every two years to account for the growing complexity of chips.

Moore's Law had some profound implications at the time, predicting that computing technology would increase in value at the same time it would actually decrease in cost. In 1965, this was simply a prediction, but after 40 years of technology advancement, both in PC hardware design and TCP/IP networks, not to mention the multitude of standards that are responsible for most of the software and web services available today, we can now say without any hesitation that Moore's Law has stood the test of time.

There is no better example of Moore's Law than in video conferencing. Today, even a mobile device such as a cell phone or tablet can process and display video; and most desktops can easily process multipoint HD, VoIP audio, and live sharing data. Indeed, a good parallel processing application such as Nefsis brings multiple cores and processor extensions to bear, far more compute power than hardware-based codecs of the prior two decades — and at incrementally zero cost, as most users already have a desktop or conference room computer.

Economies of Scale Lower Peripheral Prices

Another dynamic closely related to Moore's Law is the logarithmic, or near-logarithmic, decline in the per-unit cost of manufacturing, also known as the manufacturing learning curve and economies of scale. This is especially pronounced as once-specialized equipment becomes a high volume, PC peripheral or consumer-electronics device. Today, cameras are widely available as plug-and-play video conferencing equipment.

Organizations throughout the world are turning in droves — as of March, 2005, LogiTech shipped 25 million webcams — to services and software that provide all of the functionality of a boardroom system, and more, at a fraction of the cost. What could only be done with a complex, expensive boardroom-quality video conferencing system years ago, can now be done with a standard multicore processor desktop, a high-speed Internet connection and conferencing software or cloud-based video conferencing service that can easily be deployed and managed with little or no capital expenditure.

More importantly, this application area, once restricted to sharing two video feeds, has now grown through software advances and increasing processing power, to include HD multipoint video, advanced collaboration features, desktop sharing, and cloud-based deliveryas an integral part of the "conferencing" experience. This so-called convergence can provide business, education and government with a multi-purpose application that provides value to nearly every department – from upper management, to human resources, payroll, sales, training and IT/IS.

Business Benefits Hard to Ignore

The efficiencies of web and video conferencing are becoming increasingly hard to ignore. The reduction of business travel and associated costs, the ability to meet and interact in real-time with customers, business partners and employees located in other states or countries are just a few of the business and financial benefits. In terms of reducing capital expenditures, some organizations can cut their travel budgets in half, or perhaps more by depending on web and video conferencing to meet, train and provide sales presentations in lieu of in-person visits. The software can pay for itself in a short period of time and be a communications necessity, like the phone and email, rather than a boardroom luxury.

As more businesses get exposed to the value of video conferencing, many will explore the full gamut of products and services. Many will quickly determine that consumer products are often designed for unsecure applications, almost always limited to two people, and generally use peer-to-peer connections. Security and two-party limitations aside, the damper for business purposes is direct peer connections, which simply do not work for the 99.99% of business users that are on private IP addresses and behind a firewall (that blocks these types of connections). Seasoned IT managers realize a commercial, not consumer solution is required for business-to-business multipoint video conferencing.

For these reasons, and many more, the future of video conferencing is very bright. Multi-core processors have plenty of compute power, video peripherals are inexpensive, and cloud-based services such as Nefsis have eliminated the requirement to install complex, video-specific switching equipment. Both consumers and businesses enjoy a variety of immediately available video conferencing products and online services. All told, this makes delivering CPU-intensive applications such as high-quality HD video conferencing, desktop sharing, and web collaboration to almost every organization and employees at all levels an everyday reality.

Visual Communications Forecasted to Grow

As leading industry analyst groups, such as Wainhouse Research and Frost & Sullivan predicted, much of the increasing market demand for conferencing services triggered increased IT spending, better system and software interoperability, and increased acceptance of the technology itself. From a September 2004 report, Frost estimated that by 2009, web conferencing software and services, including video, voice, and data would be a $9 billion industry. Wainhouse Research noted in its 2005 report, "Rich Media Conferencing," that web conferencing software sales soared with a growth rate of 48 percent in 2004 and a notable movement away from managed services to self-hosted applications.

Currently, the traditional business-to-business video conferencing market is a $3 billion industry, predicted to grow to $5 billion by 2015 (Infonetics estimate, as of June 2011). Incorporating other forms of visual communications including unified communications, online collaboration and web conferencing, rich media communications is a $10 billion industry forecasted to reach $15 billion by 2015.

Companies are becoming more distributed, there are more outsourced partners, telecommuting employees, and networks with remote branch offices, while at the same time the need for real-time interaction has grown. Multipoint HD video conferencing is taking place of meetings that used to have to occur in person, while making businesses more efficient by cutting travel time and related expenses.

Video Alone is Not Enough — Online Meeting Tools are Required Too

Video Conferencing TodayThe applications for web and video conferencing are virtually limitless. Today, video conferencing is a standard communications medium for many companies. For example, video conferencing is used for inter-office meetings, training sessions, online project reviews, and ad hoc long-distance meetings. Not to mention specialty applications such as video arraignment, video remote interpreting, and telemedicine just to name a few.

As predicted, more industries and markets have taken advantage of video conferencing. Manufacturers, healthcare organizations, engineering and business service providers, and virtually every organization with complex subject matter use video conferencing to meet and collaborate, instead of flying and driving, or suffering the tedious and error-prone process of emailing files back and forth to resolve a simple issue.

As video conferencing adoption grows, more line employees will conduct online meetings where they seek to accomplish day-to-day tasks — versus previous decades where boardroom applications were comprised of executive talking heads, audio and video alone. As such, the demand for more productive web collaboration, live sharing, and online meeting tools will expand. It is not enough to simply appear on video anymore. For meaningful problem solving, sales presentations, and training, a full suite of web collaborations tools will be required. The professional software tools, documents, and presentations at one's disposal will be brought into any online meeting same as meeting in-person or at one's workstation.

Video Conferencing Everywhere: Desktops, Rooms, Mobile...

The movement has already begun, but in a just a few short years, online video conferencing providers will make their services available on all desktop platforms and mobile devices. Video conferencing will then be available in virtually every business conference room, desktop and laptop, plus smart phones and tablets. This will include Windows and Macintosh computers along with any cell phone and tablet with a camera and Internet connection. The barriers of different operating systems, mobile devices and interoperability will be solved and virtually anyone will be able to videoconference from anywhere.


The long-predicted videophone of the future is not a video phone at all; it is your desktop computer, a standard video peripheral or built-in camera, Internet access, and your video conferencing online service provider.

The long-term outlook for business video conferencing adoption is strong, driven by competitive pressures for speed, soaring fuel costs and travel limitations, while more complex products and services everywhere require better visual communication tools.

The enabling technologies are still improving: economies of scale will further reduce HD peripheral prices, while bandwidth and processing power are in increasing supply.

For business applications, video is not enough. A full suite of web collaboration tools are required for productive online meetings.

Video conferencing will soon be everywhere: desktops, conference rooms, and mobile devices, plus consumer video calling from home and virtually any Internet-connected device.

Consumer video calling and commercial, cloud-based online services such as Nefsis will play a key role in expanding video conferencing adoption from corporate boardrooms to all employees at any-sized business. Anytime, anywhere, 'any device' video conferencing is on the way.

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