Telcos should exploit Australian business video market

In a recent survey conducted here at Ovum, we identified a number of opportunities for providers of UC and business video services for large enterprises in Australia and New Zealand (ANZ).

The quantity of video solutions has considerably increased over the last few years and this momentum is expected to continue. Although there is growing demand for greater interoperability across multiple devices and different access technologies, there is enormous customer acceptance of high-definition (HD) videoconferencing.

Room-based videoconferencing is showcasing the benefits of video collaboration

With the life-sized images found in telepresence offerings (or near life-sized images found in other videoconferencing offerings), superior audio and visual quality, and a strengthening business case built around travel cost and time savings, room-based videoconferencing is the most popular video solution among large enterprises.

These solutions are also playing a key role in increasing awareness about the benefits of video collaboration, which is now expected to spread across the enterprise through more economical low-end solutions (eg, PC based). Not surprisingly, desktop video is expected to show the greatest growth, with 21% of survey respondents expecting to deploy it in the coming year.

This percentage is greater than in other developed regions and can be explained by the fact that sites of enterprises in ANZ are more likely to be located in remote areas that are not served by MPLS or ethernet nodes that would support high-end video services.

B2C video is on the agenda

More than in other developed regions, companies in ANZ realise the importance of increased customer contact when deploying HD videoconferencing solutions. We think the potential for this is enormous.

Deploying video for B2C communications can add new capabilities and help enterprises distribute their workforce by concentrating their services staff in places where certain skills are more available and cost less. In addition, an investment in serving customers is normally better perceived by executives signing off IT purchases.

More interoperability and standardisation are still needed

For companies that use or plan to use HD videoconferencing solutions, interoperability across different companies and multiple equipment vendors are important factors for choosing suppliers. Enterprises are realising that they need to communicate with customers and stakeholders connected through different endpoint equipment and carrier networks. Video will need to be ubiquitous and interoperability is critical.

Vendors and service providers have been working to provide more standardised offerings and we expect the case for B2B video communication to be validated in the near future. We have seen vendors developing an increasing number of bridging/transcoding services and telcos providing solutions where they ensure bandwidth and QoS within their own networks and bridge video traffic from the equipment of different vendors.

There are also agreements (eg, between BT, Tata and Telefonica) to deliver HD videoconferencing globally in a multicarrier environment. This is a good start for the video industry but there is much more work to be done in providing the full interoperability that is required.

Large enterprises in ANZ are slightly more interested than those in other developed regions in the ability to extend their videoconferencing over public internet connections. This is likely to be because enterprises in ANZ have more sites located in remote areas that are poorly served by corporate data networks.

Telcos are well placed to deliver video services to ANZ enterprises

Local and national SIs are the most trusted providers of managed HD videoconferencing services for large enterprises in ANZ (29%), but this preference is not as high as in Europe or the US. Telcos come next with 26% of the preference.

This is good news for telcos in the region, whose ability to provide this service is well perceived by customers compared to other developed regions. We expect this preference to grow as we see telcos increasing their SI capabilities in video by either investing in existing divisions or by acquisitions. Telstra, for example, has recently acquired the video integrator iVision in a bid to lead the videoconferencing market in Australia.

Telcos should explore the lack of relatively strong local and national SIs specialised in this market to develop a sound customer base. Combining HD videoconferencing with network services in an integrated managed proposition with end-to-end SLAs will provide an additional strong differentiator against other types of providers.

*Claudio Castell, Senior Analyst, Ovum