U.S. Videoconferencing Systems Market: A Strategic Analysis of Distribution Channels

Published by: Frost & Sullivan

Published: Apr. 9, 2003

Table of Contents

1. U.S. Videoconferencing Systems Market, Gaining Competitive Advantage through a Channel-Centric Approach

A. Overview

1. Competitive Advantage of a Channel-Centric Approach

2. Background

3. Project Scope

4. Market Definition

5. Research Methodology

B. State of the Videoconferencing Systems Market

1. Market Overview

2. Revenues and Units

3. Market and Technology Trends

C. Distribution Channel Analysis

1. Primary Types of Distribution Channels

2. Revenue Breakouts by Channel Type

3. Channel Revenues and Growth Rates

4. Major Findings

5. Strategic Recommendations - What?s a Vendor to do?

D. Channel Strategies of Primary Vendors

1. Polycom

2. Sony

3. TANDBERG

E. Channel Profiles & Recommendations

1. Applied Global Technologies

2. GBH Communications

3. International Video-Conferencing Inc. (IVCi)

4. ReView Video

5. SBC Communications

6. SKC Communication Products

7. Verizon Communications

8. Wire One Technologies

9. Conclusions & Recommendations

Abstract

As the videoconferencing technology has evolved and the audio/video quality of devices has improved, vendors are now shifting their focus from product differentiation to competitive differentiation through compelling "go-to-market" strategies. Vendors, though continuing to introduce cutting-edge product features and attributes, are now relying on distribution channels that can help end users to derive maximum benefits from technological developments.

This Frost & Sullivan report addresses the growing demand for an objective assessment of distribution channels in the videoconferencing systems market to support the planning for distribution strategies. The report provides a comprehensive overview of the state of the videoconferencing systems market, an evaluation of vendors' channel strategies, and strategic recommendations. Most importantly, it contains data on "sales-out from channels" to provide a better understanding of market growth at the end-user level.

'High Touch' Sales Teams to Enhance Services to Channel Partners and End Users

There exists a big gap between the efforts made by videoconferencing vendors and the implementation at the end-user level. Vendors are now realizing the full potential of using distribution partners to bridge this gap through educated, motivated, and efficient channels. Simply put, vendors are making as much effort in "how they sell" as they have in the past on "what they sell".

Vendors are increasingly identifying that the distribution channel as a whole is unlikely to cause fundamental changes without resolute, focused assistance. As a result, they are working toward augmenting the efforts of their indirect channels through 'high touch' sales teams. This is likely to provide greater business opportunities for channel partners as well as improved service and support to the end users in a market yearning for better education, awareness, and extensive post-sales care.

Long-term Focus - A Must for Market Success

Vendors and their distribution partners should address primary issues such as ease of use, reliability, and cost efficiency that have impeded the adoption of videoconferencing technologies. The analyst says, "While tough market conditions pose several challenges, they also provide opportunities for vendors to introduce a new solutions paradigm that offers a consultative approach to developing, deploying, and supporting collaborative applications. This will drive channel members to extend 'rich application and service offerings' to their customers."

Despite the need to focus on near-term challenges, including market survival, it is critical for vendors and channel partners to maintain a long-term strategic perspective and take steps to establish sustainable competitive advantage. This will position them for success in the next phase of market evolution. The analyst concludes, "Continuous technological advancements, the ongoing restructuring of distribution strategies, a renewed commitment by vendors to offer focused assistance to channel partners and end-users, and improvements in videoconferencing services are expected to propel future market growth."

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