The worldwide Web conferencing markets continue to see healthy growth, driven primarily by the increasing recognition of real time collaboration as a key enabler of business performance. Organizations are, therefore, prioritizing technology investments in real time collaboration tools, including Web conferencing, to enhance productivity and reduce costs.

Keeping pace with these developments, Web conferencing vendors are now exploring new growth opportunities to extend the reach of the technology from departmental adoption to organization-wide deployments. Innovative ways to deliver Web conferencing are also gaining popularity, and integration of Web conferencing with business intelligence applications as well as instant messaging (IM), voice over Internet protocol (VoIP), video conferencing, and groupware, is becoming a major focus for vendors in this market.

Nevertheless, while the global demand is rising, the hyper growth seen during the early years of the technology is beginning to reduce. Pricing models are evolving to allow for the ’democratization’ of the technology and the resultant price pressures are the reason for this decline in growth rate. "While the benefits of Web conferencing and its impact on ROI are visible and tangible, it is critical to not ignore the human element," notes the analyst of this research service. "The success of Web conferencing and its adoption as a grassroots communication tool hinges on changing established work behaviors."

While Software as a Service (SaaS) Model Thrives, User Paradigms will Change in the Future

Between on-premise software providers and hosted service providers, hosted service providers have been the undisputed leaders in the Web conferencing market as they have successfully broken down the barriers of cost and complexity. Moreover, SaaS is now evolving beyond canned applications, into the hosting of components to offer custom-composite solutions. Due to the fast changing technology and anticipated new product developments in the area of integrated collaboration, many organizations are opting not to invest in an on-premise solution just yet. Moreover, when it comes to conferencing, end users are not yet ready to take the onus of in-house application management and are favoring hosted services. This ‘buy by the drink’ approach is favoring growth in the hosted services market, while on-premise solutions are expected to take off at a faster pace in two to three years.
Going forward, the worldwide Web conferencing market is expected to grow significantly as the market migrates from point products and online meetings to an integrated suite of collaborative communications. While large enterprises have driven the adoption of Web conferencing so far, true growth opportunities lie in the under-served SMB market. In 2006, major vendors announced clear strategies to address the SMB market and there could be considerable product, pricing, and marketing evolutions. "As the North American Web conferencing market sees greater penetration and competition, vendors are making a stronger push in Europe and Asia Pacific, seeking international growth to improve their position," says the analyst. "In future, ensuring global availability and support of products and services is likely to be a key differentiator among vendors."