Today's Videoconferencing Landscape - Connectivity vs. Collaboration
Video takes many forms, and all of them have a role to play with Unified Communications. Some UC solutions are very - or even wholly - video-centric, while for others it's just one of many applications that make the overall experience worthwhile. This variance is not surprising when you consider how amorphous the definition of UC is, and that can be a good thing for vendors looking to make a distinct mark on this space.
Last week, I attended a Tech Day event for LifeSize at their Austin, TX, HQ, and it was a great opportunity get immersed in their story, but also to see where they fit in the bigger scheme of things. I've written often about video, but this event has been a good catalyst for me to consider the overall landscape and the challenges of making a go of it in this space.
Whether you choose to view video as a business unto itself or as part of a UC solution, the technology sure has come a long way. Like all other modes of communication, video is also being shaped by current forces bigger than any of us, namely mobility, the cloud and perhaps even WebRTC. We all know that video is a powerful tool, but monetizing it hasn't been easy - and getting employees comfortable using it has been another core challenge.
At the LifeSize event, they did a great job outlining the various use cases for video, with two attributes defining the most suitable type of solution. One is cost and the other is QoE - quality of experience. This is pretty easy to visualize as a 2x2 matrix, where there's a spectrum of offerings to consider. At the bottom end, you have lots of choices where both the cost and QoE are low, and there's definitely a market there. Moving up and to the right, we go up-market where cost and QoE are high, and that's a different opportunity altogether.
I found this matrix a useful way to look at the overall market, and it helped me better understand the distinct challenges that LifeSize faces. If you try to picture where vendors might fit on that 2x2 matrix, you also have to think about what you're using video for, along with what tradeoffs you'll need to make. To illustrate, here are some of the key decision points that will dictate the path you take for video.
Hardware or software? There's a lot of legacy video out there, and it's still easy to think of video as a hardware purchase. Conversely, it's all software today, and if you're comfortable with that, the range of options becomes much greater.
Cloud or premise-based? This largely goes hand-in-hand with the above, and there is a distinct set of vendors and offerings at both ends of the market. Some of this is driven by cost, but are also important IT considerations given the inherent complexity of video.
Best-of-breed or integrated solution? All elements of UC face this question, and given the range of hardware pieces and endpoints that can go into a video solution, this is a pretty fundamental decision point. Best-of-breed provides the most flexibility, and these vendors need to have strong interop capabilities.
Showing or sharing? This speaks to what you plan to use video for, and most businesses haven't really thought this through. The former is more passive and doesn't require a sophisticated solution. Sharing, however, is a real sweet spot for UC, and that's where the discussions about using video for effective collaboration get more interesting.
Connectivity or collaboration? Each of the above would make for a great series of 2x2 matrices, but that's not where I'm going here. After taking in the various presentations, roundtables and demos at LifeSize, this is the key value driver for me when looking at the vendor landscape.
My view of the landscape
There's a lot to consider here, but I see connectivity and collaboration as the clearest way to understand where and how the various vendors fit. I'm keeping the language simple, but basically connectivity-based offerings give you the core video experience, but without the bells and whistles of telepresence. Collaboration-based offerings deliver a rich experience, and in the spirit of UC, video is integrated with other applications and processes. Building on the above points of difference, here's how I would characterize these ends of the market.
Mostly or entirely software
Mix of both, especially for room-based systems
Mostly or entirely cloud/hosted
Mix of both, but trending to cloud
By nature, best of breed, especially for endpoints/peripherals
Primarily integrated, not just for the video pieces but other elements as well
Showing - easy to deploy and use, which helps drive mass adoption
Sharing is more involved, but is higher value and supports the UC story
Low or even free, often on a simple subscription basis, making it attractive to a broad audience
Can be very high, including Capex if using telepresence; may also be bundled with other solutions/services
Simple, requiring little or no IT
Complex and often requires specialized outside expertise, both for network planning and room design/installation
"Good enough" for everyday needs, and HD is becoming common
Very good and even incredible depending how immersive you go
Vidtel, Blue Jeans, Zoom, Vidyo, Adobe - along with consumer-grade services like Skype, Google Hangouts and Apple Facetime
I'm sure there's a lot you could quibble with here, but I'm just trying to provide a basic bifurcation of how I see the two main ends of the market shaping up. From this, I now ask the question, so what about LifeSize? Connectivity versus collaboration may seem like an oversimplification, but to me, that differentiates the top and bottom ends of the market. Connectivity offerings provide a solid service that's reliable, affordable and easy to use. A key driver here is the limited need for onsite infrastructure or IT expertise, and that goes a long way to getting people using video. During the LifeSize event, we heard a few references to the network effect, and that definitely holds for video. The more people using video makes the application more valuable, and to get this going, ease of use and affordability are essential.
From there, however, the leap to collaboration can be pretty big, especially where hardware is involved. Along with this comes cost and complexity, but in return the business gets an end user experience that can really help UC pay off. Interestingly, vendors at both ends of the market are moving to the middle to broaden their appeal. As connectivity players build critical mass, they must enrich their offerings to make them more engaging and ensure they can scale effectively. Collaboration players, on the other hand, need to bring more cloud into their story, not just to make video more affordable and easier to deploy, but also more adaptive to the growing ecosystem of cloud-based applications that can add value to video.
For now, however, most video players seem to fall squarely into one of these two camps. LifeSize, however, is more of a true hybrid, which makes them harder to peg. In my blog post reviewing their event, I noted their strengths in engineering and R&D, and they have a great history in building their expertise from the bottom up. In that regard, I liked their comment to the effect that in order to build great software you need to build great hardware, and I think that has a lot to do with their success to date.
They may well have solid hardware and software - much like vendors in the collaboration grouping, but in terms of applications and utility, they're very much in the camp of show, not share. LifeSize doesn't talk much about UC and integration with UC solutions. They have a play with Lync, but based on the latest updates I've seen and heard, Microsoft is working more with other partners for video. I'm being very matter-of-a-fact about this, as video provides value in many ways. There are plenty of businesses that are perfectly happy investing in video primarily to show rather than share.
The sweet spot for LifeSize has been the SMB market, and they believe there's a big opportunity waiting to happen for video-enabling meeting rooms. Their systems are priced right for this need, and if they can execute on go-to-market, they'll do well. The ideal LifeSize customer would love the sizzle of telepresence but can't afford it; but they also are willing to pay for a solution that goes beyond what the connectivity players can deliver.
I don't really know of any other video vendors that straddle this middle, and it makes me think of ShoreTel and their dual focus on offering both hosted and premise-based VoIP. This is not the conventional route to market, but if you can provide the best of both worlds - and get the market to see the value in that - then your odds of success are pretty good.
The biggest challenge I see is not from the collaboration players above them - it's the more nimble connectivity players down under. They have been the first movers with cloud, and most recently, WebRTC. LifeSize knows they have to move faster to incorporate these trends, as they will drive down costs, accelerate time to market and enable the innovation needed to keep the video value proposition fresh. If last week's $50 million funding round for Blue Jeans is any indication of what's coming, LifeSize probably needs to get more aggressive on their go-to-market.
Video may well be a great growth opportunity, but if the success drivers are being defined by others, your value proposition become diluted and more difficult to defend. Here at UCStrategies, we see some of that happening with UC, and there's no reason it can't happen as well with video.