Analyst: Video Conferencing Industry Could Lose A Major Player

Most lists of New Year predictions are boring. Everyone’s too worried about offending someone. Not Wainhouse Research’s Andrew W. Davis.

Telepresence Options magazine quizzed a bunch of analysts at Wainhouse, perhaps the top communications-focused analyst firm around. Asked to be “bold” and “daringly provocative,” Davis, the co-founder of Wainhouse and one of the Deans of the Unified Communications analyst community, definitely delivered:

Cisco will exit the hardware-based group video conferencing and telepresence business and concentrate on voice solutions, UC, social, and software clients for all forms of collaboration,” Davis wrote, seemingly unconcerned about ruffling any feathers in San Jose.

Davis continued: “This will take one of three forms: 1) a shutdown, as was the case with Flip video; 2) a sell-off to a third party much like HP did in 2011 when it sold its Halo business to Polycom; 3) a spin-off into a new company (how ironic were it to be named Tandberg) much like AT&T did years ago with Lucent.”

(Full disclosure: Avaya is a spinoff of Lucent and competes in video conferencing against Cisco with its Avaya Aura and Radvision Scopia lines. And as always, any opinion here is strictly my own and does not represent my employer.)

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Cisco senior director for collaboration solutions marketing Roberto De La Mora dismissed Davis’s prediction last week as “very imaginative…Our prediction: Cisco will remain focused on delivering a full portfolio of video collaboration tools, including hardware and software, so that enterprises will always have the right tool for the right task. We also predict these video solutions will continue to be a vital and integrated component of our market leading portfolio of collaboration offerings that enable anytime, anywhere communications.”

But there is some precedent for Davis’s bold prediction. Cisco already decided a year ago to stop selling its Umi personal video conferencing hardware.
And in a No Jitter blog from November, Davis made similar comments about Cisco, while giving more rationale. For one, the global market for room and executive video conferencing systems in the first half of 2012 was down 7% year-over-year.

The reasons? A weak global economy combined with a plethora of choices, wrote Davis, which include, “lower cost software-based codecs for conference rooms, highly-convenient mobile solutions for individuals, including UC solutions, and no-up-front-cost cloud services for all of the above.”

As a result, as another Wainhouse analyst Derek Abrams predicts, personal video conferencing is on the upswing. This involves using laptop PCs, tablets and smartphones to video conference anytime, anywhere, thus replicating the convenience of Skype and FaceTime, but with an enterprise experience and QoS (Quality of Service).

For instance, California governor Jerry Brown is advocating the increased use of online teaching to alleviate overcrowded classrooms and trim costs. This would obviously rely heavily on students watching lectures and ideo conferencing via their computers or mobile devices.

Davis concludes that for Cisco, “Sinking or abandoning ship is not out of the question. The videoconferencing industry has a somewhat unique history of seeing its leaders disappear–just ask the people who used to work at CLI, GPT, PictureTel, and VTEL.”

As Cisco is such a direct competitor to Avaya, I’ll avoid speculating. So what do you think?

  Discuss This Article

Comments: 2

  • greg macarthur says:

    Should be noted Vtel is still alive and growing

  • AnonE says:

    Cisco came into a great, improving and growing market and many would say has destroyed the best of the best, allowing price trashing to take place online, not supporting customers or resellers at all well, not undestanding the market but dictating how it must go, and I think most of the Telepresence industry would welcome them dropping out as soon as they can. However much we are told the market is dipping due to a weaker economy, a plethora of choices etc. etc. many genuinely believe it is actually the confusion caused by Cisco that has caused the downturn, along with the poor ability to create quality and lasting relationships, the removal of key account managers, support team members and leaders that were brought across from Tandberg, and the bullish attitude to them thinking they know best, along with their way of marketing, not how great they are, but how bad everyone else is. Not to add the threatening emails often sent to the wrong people, their confusing communication with customers who didn’t ask to be communicated with in the first place, their inability to return 1/2 of their basic support calls, empty boxes being shipped, wrong cables & equipment being shipped at least 1/2 of the time, and their way of hiding behind “non replyable” emails.

    I, as do many others in the industry, believe we would all be better off without them here.

    Such a shame. Everyone loved Tandberg, loved to work with them, enjoyed being certified, worked hard to reach accreditation levels and build relationships and that is just a scratch on the surface. Now, the word Cisco is mentioned and people shudder. Not just resellers, but distributors, partners and customers, along with most the Cisco employees, who I hear joking many a times about how they can’t wait to get out of such a mess of a division as Telepresence is.

    I am sorry to say it but Cisco, go back to doing what you know best. And thats not Telepresence. Not now, not tomorrow and not in the future.

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