HERTFORDSHIRE, UK – Video conferencing hardware shipments increased 50% last year, reaching 1.4 million units, with a projected CAGR of 27% through 2022, according to Futuresource Consulting.

“The market is in a significant growth phase,” said Chris Mcintyre-Brown, associate director at Futuresource Consulting. “Revenues reached $3.8 billion last year, and the total number of meeting rooms equipped with video conferencing technology now exceeds four million worldwide. However, this still only represents around 10% of the available market.”

As technologies proliferate, the market is beginning to shift from high-priced hard codec solutions to accessible software-based solutions. Company budgets that were previously allocated to video conferencing technology for one or two larger meeting rooms are now spread across multiple smaller rooms. It’s a challenge impacting many of the high-end vendors, who are adjusting their business strategies to remain competitive. This includes building in new premium features, releasing lower cost versions of their systems with less functionality, and/or exploring cloud-based solutions. Acquiring companies with complementary technologies is also a route being taken, demonstrated by Cisco’s recent acquisition of Voicea, a provider of real-time transcription, voice search and meeting highlight software.

“What was once seen as a solution for the boardroom is now being harnessed by employees at all levels, pervading meeting rooms and having a huge impact on the demand for video communications,” said Mcintyre-Brown. “At the same time, companies are recognizing the benefits of collaboration and communication in small groups for rapid problem-solving, creating the need for smaller, more immediate and informal meetings. As a consequence, larger meeting rooms are being forfeited to make way for smaller meeting rooms and huddle spaces. This is further accelerating the uptake of video communication solutions.

“Our research shows that almost two-thirds of interviewees spending up to three hours per week in meeting rooms are using conferencing technology to include a remote participant,” said Mcintyre-Brown. “What’s more, nearly three in four companies are actively encouraging employees to increase their use of conferencing technology to communicate with colleagues, customers and third parties. Yet, there are still a number of issues that continue to surface. On average, one in three conference calls suffers from some sort of mishap. This could be problems encountered when people try to join the conference session, audio or video quality, or background noise from another user. We also found one in four conference sessions begin with some sort of delay. If left unchecked, such challenges may slow down user adoption moving forwards.”

Futuresource forecasts video conferencing hardware shipments will reach 3.6 million units in 2022. Cloud video conferencing solutions have been the single most important enabler of this explosive growth, addressing the need for AV communication at anytime, anywhere. Once these solutions have been tested with small teams, users then typically show the need to use them across the company, often trialing a wider range of technologies and investing in higher quality solutions, which helps limit some of the technical problems faced by users.