Environmental Policies, Virtualization of Workplace Drive Web Conferencing Services in Europe: Report

Web conferencing services are reportedly seeing an increase in demand everywhere in Europe with companies looking for ways to reduce their travel expenses without harming their productivity, according to research firm Frost and Sullivan.

 

Interestingly, those who signed up for the service have effectively reduced their capital expenditure and have also spurred the growth of the service in the continent.

 

“Hosted services are the dominant model in delivering the service,” the analyst firm said in its latest report.

 

That is because the researcher said hosted services do not require expensive in-house maintenance and upgrades.

 

Frost & Sullivan (News - Alert) said hosted the Web conferencing service market in Europe earned revenue of $162.6 million in 2008 and estimates the revenue to reach $657.1 million in 2014, at a compound annual growth rate of 26.2 percent.

 

"The global recession and stringent environmental laws introduced by the European Parliament in 2008 are driving companies to reduce their travel expenses and comply with 'green' policies," Frost & Sullivan Research Analyst Iwona Petruczynik said. "Web conferencing services certainly help in achieving these objectives."

 

According to the researcher, the hosted Web conferencing services segment grew at 14.9 per cent from 2007 to 2008, mainly due to growing awareness about web conferencing and greater penetration among vertical, small, and medium businesses. More mature markets such as Germany, France and the United Kingdom may continue to see high demand for web conferencing because of the presence of several global companies in the region.

 

The researcher says markets like Italy, Spain, or Ireland, where conferencing services have been present for some time now, and emerging markets such as Poland and Hungary, where these services are only gaining in popularity, will see an expansion as they continue to adopt and implement web-based technologies.

 

“In the past, Web conferencing was perceived as difficult to use, with many SMBs regarding it as out of their reach. This outlook has significantly influenced the growth rate of these services in the SMB sector. However, with new, integrated solutions presently entering the market, this situation is changing; web conferencing is becoming more affordable,” Frost and Sullivan said.

 

Rising interest in Web 2.0 technologies -- such as wikis, blogs and social networking sites - in the enterprise sector is also changing the communication models between businesses.

 

Nevertheless, the market research firm warns that market is still facing many challenges such as intensifying competition, escalating pricing pressure and low-awareness on Web conferencing services, especially in the Central and Eastern European region.

 

 Furthermore, poor infrastructure and low penetration of the SMB market in Europe is also hindering the mainstream adoption of web conferencing.

 

"The entry of big, global web conferencing services vendors such as Cisco and Microsoft (News - Alert) into the European market is likely to threaten the smaller regional participants," Petruczynik said. "These local independent providers are responding by offering more competitively priced services which, in turn, will impel the larger vendors to lower prices."

 

Web conferencing services providers also have to deal with a highly fragmented European market. There is a considerable need for language integration and support, as many workers do not speak English - in which most services are supported. Additionally, a preference for conducting face-to-face meetings, especially among business people in the CEE region, is delaying the rapid growth of Web conferencing services in this region.

 

"For example, Web 2.0 tools in the large economies of Germany, France, and the United Kingdom are finding their way into enterprise sectors at a much faster rate than in the CEE countries," Petruczynik said. "Web conferencing services providers should customize their marketing strategies and their product offerings to take these conditions into account."