NEW YORK, USA: Small and medium businesses (SMBs, or companies with up to 999 employees) are set to spend up to US$2.6 billion on conferencing solutions – including audio, web and video conferencing – by 2012 worldwide, up from US$1.8 billion in 2006. That would put the market at a compound annual growth rate of 5.9 percent between 2006 and 2012, according to the latest study by New York-based Access Markets International (AMI) Partners, Inc.

As SMBs become more mobile and geographically dispersed, they need cost-effective audio, web, and video conferencing solutions to keep in touch with employees, customers and business partners. These solutions will help SMBs improve communications and collaboration, reduce expenses, and enhance employee productivity.

"In today's tough economic times, driven by the global economic crisis, high travel costs, increase in gas prices, and natural disasters – the relevance of conferencing solutions increases enormously," says Sanjeev Aggarwal, AMI-Partners' New York-based Vice President for SMB Infrastructure Solutions. "SMBs are turning to conferencing solutions that will help reduce costs and provide clearly identifiable ROI and drive business growth."

Small businesses (SBs, or companies with up to 99 employees) have a definite preference for hosted solutions. This is based on feedback from SMBs and vendors, as the hosted pay-as-you-use solutions are easier to deploy and do not require significant capital investment upfront.

The use of hosted web-conferencing solutions is becoming easier as the new solutions do not require client software downloads and can now be used in an on-demand manner. Medium businesses (MBs, or companies with 100 to 999 staff) are adopting both hosted and on-premise solutions driven by increased penetration of on-premise IP-PBX systems from vendors like Avaya, Cisco Systems and Nortel.

"Most conferencing solution vendors provide some integration with Microsoft Outlook for schedule, contact management and e-mail functions,"  Aggarwal says. "Some of them are now integrating their technologies with Unified Communications and Collaboration frameworks from Microsoft, Cisco and IBM to benefit from underlying enabling technologies like presence and SIP and benefit from the growing momentum of unified communications."

The conferencing market is becoming very competitive as vendors and service providers are developing and implementing solutions specifically designed for SMBs. Conferencing service providers like Intercall, AT&T Connect and BT Telecom are making global audio conferencing bridging services more affordable and scalable.

Cisco-WebEx, Microsoft-LiveMeeting, Citrix Online-GoToMeeting and IBM–Lotus Sametime and Unyte are the leading worldwide vendors in the SMB Web conferencing market. Polycom, Tandberg and Lifesize are the leading SMB video conferencing segment. Several of these vendors have seen an upwards spike in their business in 2008, a trend which will continue over the next several years as adoption increases.

Vendors covered in this report include Intercall, BT conferencing, AT&T, Verizon, ClearOne, Cisco, Microsoft, Citrix Online, IBM, Adobe, Elluminate, DimDim, Yugma, Polycom, Tandberg, Lifesize, Vidyo, Speedsight, Avaya, Nortel, NEC, Mitel, Siemens Communications, Alcatel-Lucent, ConferencePlus, Copper Conferencing, and Radvision.

Some key findings from the new report, titled SMBs Employing Conferencing Solutions to Cost Control and Drive Business Growth - Worldwide SMB Conferencing (Audio/Web/Video) Solutions Forecast:

The worldwide SMB market for conferencing solutions – including audio, web and video conferencing – is forecast to increase from US$1.8 billion in 2006 to US$2.6 billion by 2012, a compound annual growth rate of 5.9 percent.
The web conferencing segment will grow from US$388 million to almost US$693 million by 2012, growing at a much faster compound rate of 10.2 percent per annum.
The video conferencing segment will grow from less than US$100 million in 2006 to US$164 million by 2012, with a compound annual growth rate of 8.5 percent.
North American SMBs are the leading consumers of these solutions. They spent US$965 million in 2007 (50 percent of worldwide spending). This will rise to US$1.3 billion by 2012, with a CAGR of 6.3 percent. The second largest market is Western Europe, which accounted for US$509 million in 2007 and will grow to US$651 million by 2012.
Increase in adoption and increased usage of audio/web/video conferencing solutions by SMB on a global basis, driven by the need to control costs in response to the current global slowdown and increasingly difficult and protracted economic conditions.