Web conferencing is proving to be a smart way for businesses to strengthen collaboration and trim costs.
Andrew Nilssen, senior analyst and partner at Wainhouse Research, said web conferencing services raked in $315m last year. Nilssen expected the industry to grow 22% a year over the next five years, as it moves from "a renegade to a blessed stage".
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One reason Nilssen and others take such a bright view of Web conferencing is its ability to help IT managers keep costs in check while offering a range of pricing models. All players offer a laundry list of collaboration services, such as audio and videoconferencing, application sharing and whiteboarding. But technologies and approaches vary.
Of the pure service providers, WebEx Communications leads the pack. PlaceWare and Raindance Communications offer hosted software services, while IBM, Spectel and Microsoft offer enterprise collaboration software.
Robert Mahowald, research manager of Collaborative Computing at IDC, said IT managers should consider their company's size, its existing IT infrastructure, and how the technology will be used.
Mahowald added that small and midsized businesses tended to stick with a services-only approach because there is no heavy up-front investment and meetings can be arranged on an ad hoc basis. "Very small businesses don't think strategically, but tactically, and will go after services nine times out of 10."
Many large firms, on the other hand, see web services and hosted software offerings as a convenient way to bring together global workers, shave travel costs and strengthen virtual teams.
Nilssen said firms that want to use the technology as part of their daily workflow should think about investing in enterprise collaboration software that integrates with other business applications and sits behind the company firewall.
Most major web conferencing services can transgress company firewalls, and offer security, Nilssen said, but some industries, such as healthcare, are required to have their data sitting inside the company firewall, making software a better solution.
In the realm of collaboration software, IBM Lotus Sametime stands out. Sametime posted year-on-year revenue growth of 30% in 2002, and has more than eight million users.
Many believe that Microsoft's real-time collaboration project, codenamed Greenwich, will challenge Sametime when it launches later this year. Greenwich is expected to combine peer-to-peer voice and videoconferencing with instant messaging, one-click e-mail generation, authentication, logging and alerts.
Microsoft agreed to acquire conferencing service provider PlaceWare in January, and analysts expected to see PlaceWare technologies in Microsoft products in the next year or so.