As businesses all over the world slide deeper into the yawning chasm of recession, CEOs and CFOs must strike a delicate balance between the cost and benefit of travel.
Does meeting face to face outweigh the thousands of dollars spent for the business trip? In a recession, the answer is often no, even for companies with the deepest pockets.
One of the solutions is to cut out travel costs and leverage collaboration systems such as Web conferencing. Products in this category include Cisco WebEx, Citrix GotoMeeting, Microsoft Office Live Meeting and IBM Lotus Sametime Unyte-all of which let users conduct meetings via the Internet.
Often, these applications are grouped in a larger category of software known as UCC (unified communications and collaboration), an integration of e-mail, calendaring, VOIP (voice over IP), instant messaging, audio and Web conferencing, and other technologies.
But Web conferencing seems to be the big driver when companies-and employees-are tightening their belts. Akiba Saeedi, director of UCC for IBM, told eWEEK that she’s had four or five conversations with director-level executives who have told her that the sky-high fuel costs during the summer forced their employees to work from home.
Conventional wisdom has it that Web conferencing and UCC installations will jump during the recession. But, according to Roopam Jain, principal analyst with market research firm Frost & Sullivan, sales cycles are being affected by a spending slowdown, with cycles getting longer as customers drag their feet on making a purchase decision.
“People are taking a step back, and this is having a downward impact on video conferencing, audio conferencing, and unified communications and collaboration,” Jain said. “Yet there will be opportunities for vendors as people continue to go through tough times and cut back in travel. We are seeing some businesses that have a mandate to cut travel 30 to 50 percent. Yet they still have to communicate and collaborate by voice and audio conferencing.”
SAAS Boosts Web Conferencing
Web conferencing has been hailed as a panacea for companies during down times before, but the SAAS (software as a service) model may be the thing that tips the technology into ubiquity. With SAAS, companies no longer have to load fat clients onto end users’ machines, and can pay as they go.
In this area, Cisco’s WebEx is king, Jain said, noting that the subscription model will prove attractive to users who want to pay per month. While Jain wouldn’t provide specific numbers, she said Cisco WebEx is the market leader by a “wide margin,” followed by Microsoft Office Live Meeting.
Despite Cisco WebEx’s robust lead, June Bower, vice president of marketing in Cisco’s WebEx Technology Group, told eWEEK there remains plenty of green field in the market: Only 1 percent of the 80 million or so knowledge workers in the United States is using some form of collaboration software.
Bower refused to provide hard sales numbers, but she did say traffic to the Cisco WebEx site was up 20 percent in recent months, which she equates to digital window shopping during the recession.
Microsoft, meanwhile, believes customers in the current economic climate are worried not only about how to save money but also how to increase productivity. Betsy Frost, general manager for unified communications at Microsoft, said demand for Web conferencing and broader UCC software packages is strong among companies executing mergers and acquisitions in different industries.
These companies need to integrate different systems, and Microsoft aims to help them with the Office Communications Server UCC suite, or even just with Office Live Meeting.
Cisco and Microsoft easily hold half the Web conferencing market share, but Citrix Online’s GotoMeeting Web conferencing software is No. 3 in revenue market share in the hosted Web conferencing services market, thanks to a strong uptick among small and midsize businesses in the last few years, Jain said.
Bernardo de Albergaria, vice president and general manager of global marketing and e-commerce at Citrix Online, said Citrix is attuned to the recession, which is why the company is extending its 30-day free trial to 60 days to give prospective customers more time to try before they buy.
In the on-premises Web conferencing software market, IBM Sametime, which ties Web conferencing with presence and instant messaging, is the dominant market leader, followed by Adobe Connect. IBM’s installed base of approximately 20 million licensed Sametime users-and many more Notes users who have some Sametime installed-gives the vendor a tremendous reach and advantage, Jain said.
Yet, even IBM isn’t blind to the potential for SAAS gobbling up some of its on-premises market share, which is why IBM bought WebDialogs last year to add a SAAS distribution option to Lotus Sametime. IBM formally released this iteration, Lotus Sametime Unyte, Dec. 9.
SAAS Is Where Its At
SAAS Is Where It’s at
Bob Hersch, global managing director of Accenture’s Workplace Technology and Collaboration practice, told eWEEK that travel savings realized from Web conferencing solutions are a big deal for companies with employees who are frequently on the road.
Hersch declined to name specific clients he advises due to nondisclosure agreements but said clients in markets such as pharmaceutical and financial services are looking at SAAS options for Web conferencing.
So, what does Hersch advise for clients who currently use an on-premises collaboration solution but want to go with SAAS? Hersch said he tells customers to stick with vendors that are creating hosted counterparts to their on-premises solutions.
“If they have a lot of Microsoft technology, I urge them to think about Microsoft Online Services, or Cisco customers to consider WebEx Connect,” Hersch said. Ditto for IBM Lotus Sametime customers who may want to switch to Lotus Sametime Unyte.
Of course, while these vendors are giants, they’re not the only options. The market is littered with smaller Web conferencing vendors, ranging from Adobe to AT&T’s Interwise unit and Genesys, as well as a number of startups. (Yuuguu, Yugma and DimDim come immediately to mind.)
Hersch acknowledged that while these smaller companies may be reasonable options, he tends to advise clients to go with the name brands that have been around for a while (and probably will continue to be).