While corporate travel budgets have all but evaporated over the last two years, the use of Web conferencing has grown by leaps and bounds. Jacqueline Emigh takes a look at the options currently available and explores what's on the horizon for the Web conferencing software and services market.
With corporate travel budgets getting slashed right and left, Web conferencing is one market that's been growing by leaps and bounds. Systems administrators are being bombarded by an increasing variety of Web conferencing and collaboration offerings for enterprise use, ranging from software to outsourced services.
Overall revenues from Web conferencing applications will soar from $513 million in 2002 to $1.15 billion in 2006, according to IDC's latest statistics.
Likewise, Frost & Sullivan predicts Web conferencing revenues -- from both products and services -- will shoot up from $427 million in 2002 to almost $2.2 billion in 2008.
"A good Web conferencing product or service has features that are based on real line-of-business needs, such as marketing, training, and the ability to share presentations," said Robert Mahowald, an analyst at IDC.
Manageability issues are also key. "Vendors are hoping that, if they make things more manageable, Web conferencing [products and services] will get even more use," according to Mahowald.
Page 2: Travel Cuts Drive the Web Conferencing Surge
Travel Cuts Drive the Web Conferencing Surge
Recent travel cuts are one of the major reasons for the Web conferencing surge, analysts agree. "The most obvious driver is that, for a variety of reasons, people don't want to travel as much these days," Mahowald said. "A sales transaction, for example, typically requires several meetings, from the initial meeting with the customer, to the closing. If you can eliminate any of those meetings, you can save money."
"With the recent downturn in the economy, all companies need to tighten their corporate purse strings and find new ways to cut cost out of sales, education, training and support. And, in the months following the [September 11] terrorist attacks, all companies have taken measures to reduce corporate travel and find ways to accomplish the same goals without leaving the office," concurred analysts from Summit Strategies, in a recent report.
Honeywell, a PlaceWare customer, is conducting Web conferencing on a global intranet used by thousands of company engineers. According to R. Lee Allen, Honeywell's manager for eBusiness Operations, Web conferencing saved the company $10 million in travel time and expenses over the first six months alone.
Allen cited another advantage of Web conferencing. "With PlaceWare, we can meet more frequently from anywhere more effectively. I think it's really allowed us to accelerate our projects as well."
More Useful than Videoconferencing?
Videoconferencing, another alternative to corporate travel, is not that feasible yet over the Internet, many experts say. Of course, video isn't always necessary.
"Web conferencing can be a great enhancement to traditional audioconferencing. It can also be a cheap alternative to videoconferencing. There are certain situations where video is very useful. If I'm an engineer, and I want to show you how to work a locking mechanism on a gadget, videoconferencing can make sense. Most meetings, though, don't require face-to-face communications. I don't need to be able to see your face in order to share data with you," said David Alexander, an analyst at Frost & Sullivan.
Page 3: Collaboration "Growing Like Wildfire"
Collaboration "Growing Like Wildfire"
Collaboration is another driver behind Web conferencing. "Collaboration is growing like wildfire, and all collaborative technologies are starting to find a home," according to Alexander.
The top four players according to Frost & Sullivan's numbers are WebEx, PlaceWare, Raindance and Genesys, in that order. All four focus on Web conferencing as a hosted service. PlaceWare also produces bundled hardware and software products for use on corporate intranets.
Some organizations are turning to hosted services for external as well as internal purposes. Burr Wolf, a tax software and consulting firm, relies on WebEx's services for performing customer software demos and support functions. In addition, WebEx is used internally "whenever presentations from Microsoft Office are part of the content of a meeting," said Chuck Harris, Burr Wolf's executive VP and former CTO.
Other collaborative tools deployed internally at Burr Wolf include Salesforce.com ("for knowledge-based information sharing") and Microsoft's NetMeeting, Instant Messenger, and Outlook software.
Yet some large enterprises, particularly in the financial services industry, are using hosted services for public-facing Web conferences only, Alexander observed. In the interests of privacy and security, these organizations opt instead for commercially available Web conferencing products for hosting their own internal Web conferencing sessions. "They don't want any of their data to leave the company," he elaborated.
"The Web conferencing software market is growing, too, but not as fast as services," according to Alexander. Aside from Microsoft, makers of popular software products for Web conferencing include IBM/Lotus, Latitude, Interwise, Centra, Spectel, and Sonexis, to name a few. Most of the software products can also be obtained as managed services, either direct from the vendor or through third-party partners.
IDC's latest numbers give WebEx the lead for Web conferencing applications (at 20.7 percent), followed by Lotus Sametime (18 percent), PlaceWare and Centra (tied at 10.6 percent each), Latitude (7.9 percent), and "other" (32 percent).
Page 4: App Sharing, Whiteboarding, Audioconferencing
App Sharing, Whiteboarding, Audioconferencing
Leading-edge features in Web conferencing include application sharing, shared whiteboarding, integrated audioconferencing, realtime participant polling, streaming media, record and playback, and support for 3D objects, for example.
Products and services vary, though, in terms of feature support. "Latitude, for example, has its own audioconferencing. Others provide audioconferencing through agreements with other vendors," said IDC's Mahowald.
"Web Event Management"
Vendors also play up various sorts of management tools. Centra, for instance, cites "robust Web event management" features such as a Web event creation wizard, custom event registration pages, an event management calendar, and "lead source and marketing campaign tracking" for measuring the effectiveness of direct mail, e-mail, and advertising promos for a Web conference.
Is Outsourcing Right for You?
Outsourcing to a service provider can be a cost effective choice for small to mid-sized businesses, as well as for large enterprises that only occasionally need to use Web conferencing.
"All you're buying is capacity, as opposed to a software license. So you can scale up and down as much as you want. Also, especially if you're an SMB, you might not want to have to hire an extra administrator to manage Web conferencing software," according to
PlaceWare is one Web conferencing vendor that sells both services and products. Large enterprise customers can buy hardware and software product bundles in two different flavors: Sun Solaris or Microsoft Windows. Next month, PlaceWare plans to release an update on the Windows side that will feature "a much richer set of tools," including dropdown windows and additional ActiveX components, according to Dustin Grosse, PlaceWare's senior VP of worldwide marketing and strategy.
PlaceWare's main emphasis, though, is clearly on Web conferencing services. Grosse claims very high scalability for PlaceWare's services -- specifically, support for up to 2,500 simltaneous users. PlaceWare offloads its data center to a partner, Cable & Wireless.
PlaceWare's services are based on a centralized architecture, in which different servers are dedicated to different functions, such as recording or user verification, for instance. "By tuning specific servers for specific functions, PlaceWare is able to assure better performance and reliability, reduce bandwidth requirements, better isolate problems, and more quickly resolve them," according to the Aberdeen analysts.
"We use patented technology that opens up a public port to stream data across firewalls," Grosse contended. The PlaceWare platform also uses multiple layers of encryption for security, along with APIs for facilitating integration with enterprise software.
Plug-ins are available for both Microsoft Instant Messenger and Lotus Notes. The plug-ins handle tasks such as coordinating calendars, launching meetings, and sending out reminders to participants. PlaceWare charges customers a one-time setup and branding fee, along with additional costs based on concurrent seats. Seats run about $100 each per month.
Page 5: WebEx's "Realtime Switching"
WebEx's "Realtime Switching"
WebEx -- the number one service provider according to both IDC and Frost & Sullivan -- tends to emphasize its "realtime switching" overlay network, which rides on top of the Internet.
"You're passing data in realtime through a switch. Instead of uploading a PowerPoint presentation, you can share the presentation spontaneously through the WebEx switch. The content won't be stored [elsewhere], and it won't be persistent in any way," maintained David Thompson, VP of worldwide marketing.
"We have a lot of control on the back end. We can detect what kind of connection you're on -- fast or slow -- and which client platform you're on. We can throttle the bandwidth and route you to the best hub." Big enterprise customers include Verizon and Boeing, among many others.
Burr Wolf: "WebEx Better than Citrix"
Burr Wolf, another customer, first turned to WebEx as a manageable way of interfacing remotely with customers. Previously, the company used a Citrix terminal server.
"Citrix, though, requires a not insignificant amount of access through the firewall. Furthermore, its connectivity features require several ports to be open at a time. Citrix just wasn't conducive to our purposes. About 25 percent of the time, we needed to call in an IT administrator to open up a port," Harris recalled.
The software specialist also took a look at NetMeeting. "There are security holes, though, in IM, and network managers have come to realize this. Consequently, a lot of our customers are starting to ban products like Instant Messenger," he added.
On the customer support side, WebEx enables Burr Wolf staffers to share applications on end users' desktops. "Sometimes, users don't explain a problem in language a support person understands."
Meanwhile, WebEx keeps improving its Web conferencing offering, according to Harris."What we like best about WebEx is its simplicity. WebEx has continued to bring out enhancements, too. The [WebEx] client keeps getting thinner and thinner, which helps out with firewall issues. Stage by stage, the visual look-and-feel gets better, too."
Since first starting out with WebEx, Burr Wolf has begun holding regional meetings over the Web. "This has reduced our travel expenses," Harris affirmed.
Page 6: More Manageability Around the Corner?
More Manageability Around the Corner?
For the future of Web conferencing, IDC's Mahowald foresees increased manageability, more integration with other collaboration tools, and support for more types of mobile devices.
According to Mahowald, vendors are now pushing to minimize "go to" issues, whether the point person is an internal network manager or an outside service provider. "Their hope is that [end users] will want to start Web conferencing even with people a few offices away. Users don't like to call somebody over to help them with applications."
"People would also like to be able to access [multiple] collaboration tools from the same interface. Lotus has already been a big innovator in this area," Mahowald said.
"Vendors are going to support conferencing on 2.5G and 3G phones, when those devices become available," the analyst added. Meanwhile, in November, WebEx became the first Web conferencing service provider to announce support for Tablet PCs.
See All Articles by Columnist Jacqueline Emigh