With a single, savvy pickup, Cisco will now command, by most estimates, the No. 1 worldwide market share for video conferencing, adding to its already exceptional, but gap-filled video portfolio, and expanding opportunities for its galaxy of solution providers.
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Is that a good thing? Depends on who you ask.
Solution providers devoted to Cisco and video and UC see hot opportunity. They also wonder -- sometimes very loudly -- about whether having so much Tandberg exposure in the hands of so many Cisco VARs means that lucrative video conferencing margins are a thing of the past. Cisco is known for many things. Fat margins are not one of them. Is it that margins will disappear or that video conferencing VARs need to adjust their approach?
The New World Of Video?
Networking and infrastructure solution providers are being told left and right that video is a brave new world: much talked about in the past decade, and finally an explosive growth opportunity thanks to video's role in unified communications, the affordability and interoperability of video solutions, and the expansion of services opportunities around video, even as the resale of video hardware and end points has slipped out of fashion in line with video gear becoming commoditized.
The market is undoubtedly heating up. Gartner holds that the video conferencing services market alone is expected to reach about $3.9 billion by 2013, with a compound annual growth rate of about 24 percent from 2008 to 2013.
Sales of telepresence hardware, even with the general term "telepresence" loosely defined, are also on the rise -- $567 million in 2009, and projected to be $2.7 billion by 2015, according to ABI Research. And the power of videoconferencing was once again in the news this week, following the countless meeting snafus and travel headaches caused by the volcanic eruption in Iceland.
Cisco sees its role in all of this as the grand enabler. Cisco CEO John Chambers and his lieutenants have long-extolled the virtues of video, which according to Cisco is seeing growth everywhere from consumer video cameras to boardroom-ready TelePresence deployments, and in the services and infrastructure requirements for all points in between.
"Services make it successful and the network infrastructure makes organizations video-ready," said David Hsieh, vice president of marketing for emerging technologies at Cisco. "That's one of the reasons why this is one of Cisco's top three overall technology priorities, along with data center virtualization and collaboration. We have 40 to 50 different engineering projects all going on right now all focused on video technology."
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