TeleSpan’s
Sixth Annual Future of Global Conferencing Study
Navigating through
Pricing "Free Fall" and the Threat of Microsoft
"Long Live Conference Calls!"
©
Copyright TeleSpan Publishing March 24, 2003
Summary:
TeleSpan
recently conducted a survey of conference bureaus' needs for market data
and analysis. The bureaus' main concern was discrepancies between the
figures reported to them by different research firms, as regards both
the present situation and forecasts for the future. These concerns have
been growing in the last two or three years and today's top priority is
for figures they can trust. A fairly high priority for many was an analysis
of Microsoft's re-entry into the real time conferencing market via its
purchase of Placeware in January. TeleSpan will meet both these needs—and
much more—with its sixth annual study of the conference call market
around the world. As in the past, the study is designed using well proven
methodology to help clients navigate their way to growth and profitability.
We received positive
responses in the survey for two innovations that were made in the study
last year. These were:
• Previews that
highlighted major findings ahead of our full reports. These enabled
us to report on a more timely basis and to save clients time in presenting
key findings to senior management.
• Excel-formatted
data for all tables containing both historic and forecast market statistics
to enable further in-house analysis of these figures.
In addition to retaining
both these innovations, this year we will provide "snapshot" reports on
the first and third quarter 2003 statistics along with our in-depth reports
on the full year 2002 and the first half 2003.
Since its inception,
TeleSpan has concentrated exclusively on teleconferencing markets. It
is in this business for the long term and fully intends to retain its
unrivalled reputation for the accuracy of its numbers, forecasts, and
analyses of the changing marketplace.
Deliverables:
The Sixth
Annual Future of Global Conferencing Study deliverables include
a total of 18 reports and summaries plus Excel-formatted data for all
report tables and private consultations, if desired. These study features
are summarized in the following table and described below.
Item
|
#
Reports
|
Deliverable
|
Comments
|
1 |
One |
Microsoft’s purchase of Placeware and its re-entry into the real-time
collaboration market—in-depth strategic analysis. |
Coverage will include a likely timetable for its next steps and the
opportunities Microsoft’s entry presents to Telespan's clients. New
this year. |
2 |
Nine |
Detailed market statistics and commentary for second half 2002, full
year 2002, and first half 2003 for the three major regions of the
world. |
Based on our expanding panel covering these three regions.
|
3 |
Two (or more as necessary) |
Preview of main results of Items 2, 4, 6, and 7via TeleSpan’s "Long
Live Audio Conferencing" newsletter-format reports. |
Will provide highlights ahead of full reports in a suitable form for
top management. New in 2002. |
4 |
Two |
"Snapshot" reports on market statistics for first and third quarters
for the three regions. |
Will enable clients to monitor gross trends on a more continuous basis.
New this year. |
5 |
|
Private consultations through a face-to-face visit or a two-hour conference
call. |
Available on request once every six months. New this year.
|
6 |
One |
Sales of audio bridges to service bureaus and end-users—report with
statistics and analysis of trends. |
Coverage will include potential for hosted services. |
7 |
One |
Videoconferencing services—report providing market statistics for
the second half and full year 2002 and analysis of trends.
|
Coverage will include trends in migration to IP and "audio add-on"—possible
opportunity areas for clients. |
8 |
One |
Updated annual forecasts through 2006 for the three major regions
of the world. |
Will include commentary on where (if at all!) the market has deviated
from our past forecasts. |
9 |
One |
North American user panel—report based on polling panel on issues
raised by clients. |
Coverage will include plans for and estimated impact of VoIP on their
conference calling. |
10 |
|
Excel-formatted data containing all tables in items 2 and 8.
|
On request. Will facilitate clients' ability to conduct their own
analyses and explore their own what-if scenarios. New in 2002.
|
Background:
For the past six
years, conference calls have consistently grown by more than 40% a year,
when measured in terms of call volume. Annual revenue growth, on the other
hand, has fallen from a growth rate of nearly 50% a year in 1996 to
virtually zero growth in 2002. Since 1998—the first year of this report
series—TeleSpan has warned clients of "commoditization" and
drawn attention to the associated migration from operator-attended to
lower-cost customer-handled conference calls. Even though these calls
have better margins, revenue growth fell flat by the end of 2002 as a
result of continued erosion of prices. TeleSpan saw bids under 7˘ a minute
as 2002 came to a closeand bids below 5˘ a minute in the first quarter
of 2003. One of our researchers has described the current pricing as being
in "free fall."
TeleSpan was able
to uncover the underlying trends and predict this phenomenon because it
is the only research organization in the world that has consistently gathered
empirical data, domestically and from selected countries globally, for
seventeen years. TeleSpan has confidential data-gathering relationships,
built on nearly two decades of trust, which continue to be used to present
the most comprehensive and accurate look at the global conferencing market.
It has the world’s only comprehensive data base of conference call data
gathered from a panel of conference call services from around the globe.
Its panel now represents 85% of the conference call market in North America,
and between 65% and 75% of the European and Pacific Rim markets. Its team
of researchers has over 60 years of combined experience studying the conference
call and teleconferencing markets around the globe.
What you need:
TeleSpan recently
conducted a survey of conference bureaus' needs for market data and analysis.
Respondents' main concerns were discrepancies between the figures reported
to them by different firms, as regards both the present situation and
forecasts for the future. These concerns have been growing in the last
two or three years and today's top priority is for figures they can trust.
Second to trustworthiness comes timeliness. Positive responses were received
in the survey to two innovations that were made in the study last year.
One took the form of previews, which highlighted major findings ahead
of our full reports. These enabled us to report on an even more timely
basis and to save clients time in presenting key findings to senior management.
The other was the provision of Excel-formatted data for all tables containing
both historic and forecast market statistics to enable further in-house
analysis of these figures. Finally, as we had expected, a fairly high
priority for a majority of respondents was an analysis of Microsoft's
re-entry into the real time conferencing market via its purchase of Placeware
in January.
Track record:
In 1998, TeleSpan
was "spot on" in accurately predicting the commoditization of
conference calls on the basis of its causal model of the market. A few
years later, TeleSpan put its clients in a position to make wise decisions
in the voice and data/Webconferencing marketplace. Other consulting firms,
with little or no data, were quick to shoot from the hip—straight into
their client's foot. A good example from two years ago was a competitor's
report (entitled The Real Time Collaboration Industry Report 2000)
which predicted the data collaboration market "[would] grow to $17.7
billion by 2003." This while TeleSpan was accurately reporting to
its clients that the Webconferencing market would be closer to $200 million
at the end of 2002, and potentially $450 million in 2003.
Even with extensive
time series data, forecasting is as much an art as a science. But discipline
is every bit as important in art as it is in science. TeleSpan follows
a highly disciplined approach to forecasting. In the report devoted to
its forecasts for the following years, TeleSpan not only makes explicit
its methodology and assumptions, it also reports back to clients on the
accuracy of its previous years' forecasts and reasons for any deviations
between what was forecast and what occurred. As last year's report made
clear, there were very few deviations to explain.
Timetable:
Work has already
begun on the study, with the first report to be delivered to clients in
June, and the final report to be delivered by December.
Methodology:
For nearly two
decades, TeleSpan has successfully relied on mail-back questionnaires
sent to service providers around the globe to gather sales data, which
TeleSpan holds confidential by vendor, but which are in turn aggregated
into shared trend information. TeleSpan will rely on this methodology
for the Status reports, sending questionnaires to service providers in
North America, Europe, and the Pacific Rim. In 2001, TeleSpan received
100% returns of the surveys sent by e-mail and fax to a dozen providers
in North America, and an additional dozen in Europe and the Pacific Rim.
With the best
will in the world, those responsible at the service providers can make
mistakes in their returns. With the benefit of 25 years experience in
the teleconferencing field, together with its data base going back 17
years in North America and up to four years in Europe and the Pacific
Rim, TeleSpan is well placed to identify possible errors in the data provided
to it. It regularly expends enormous effort in this process and in working
with service provider personnel to ensure that any necessary corrections
are made.
The methodology
used for forecasting has been detailed in our past reports and is available
on request.
User interviews
will all be conducted by telephone or face to face. We also plan to use
e-mail to obtain quick response from our user panel to individual issues
that arise during the course of this year’s study research.
Fees:
Through May 15,
2003 TeleSpan will charge $8,500 for the report series, and two hours
of custom telephone consulting to subscribers. From May 16 through October
31, the fee will be $9,250. Thereafter the fee for the series will be
$10,000. TeleSpan will bill for the entire amount upon the receipt of
a signed order form, or a company’s paperwork. Terms will be net 30 days.
Order here
Travel expenses
for face-to-face visits will be billed to the client. Consulting beyond
the two-hour semi-annual updates will be billed at TeleSpan’s standard
consulting rates.
The Reports in
Detail
The First
Report: Assessing Microsoft’s Re-Entry into the Real-time Conferencing
Market
The first report will
focus on Microsoft and its re-entry into the real time conferencing market.
Nothing has stirred as much interest in the conferencing market as Microsoft’s
purchase of Placeware in January. Nothing, that is, since Microsoft entered
the market the first time with NetMeeting in the 1990s.
Placeware’s role has
to be put in context of major changes that will begin to appear this year,
as Microsoft reformulates its product lines and shifts its marketing emphasis
from desktop to enterprise; from standalone to collaborative support.
These changes represent the emerging second generation of Windows and
will continue for the next five years. While too early to be an exact
or definitive assessment, the report will be based, in part, on TeleSpan’s
recent week-long closed-door meetings with Microsoft and its various teams
working in the area of enterprise collaboration.
The Second
through Fourth Reports: Status of Conferencing in North America, Europe
and the Pacific Rim, Second Half of 2002—The next three reports
will detail the empirical results gathered by TeleSpan from around the
globe on voice-only conference calls, data conference calls, and calls
that are streamed. Each report will cover one of the three regions being
studied. The reports will provide a series of charts and figures detailing
the size of the total conference call market by global market segment
(*and by country where possible*), using more than a dozen measures. Data
collected for the years 1997 through 2002 will be used for comparison.
As in previous
years’ "Future of Global Conferencing" reports, the data will
be compared to historic growth and usage patterns seen in North America
(the United States and Canada), South Pacific (Australia and New Zealand),
North Pacific (Japan and Hong Kong), and Europe (the UK, France, Germany,
Italy, and Scandinavia).
TeleSpan has a
policy of keeping individual contributors’ data confidential. This prevents
the presentation of statistics for a country where TeleSpan has obtained
data from only one or two service providers, and insures confidentiality.
If, however, TeleSpan obtains data from three or more service providers,
countrywide data can usually be presented without violating this policy
(an exception sometimes occurring when there are three service providers
and one of them has a very much higher volume than the other two).
These three reports
will contain, at a minimum, the following tables, charts, and figures:
• Call Volumes
• Port-Hours (billable
hours)
• Service Revenues
• Call Types
• Call Volume
Breakdown by Call Type
• Port-Hours by
Call Type
• Service Revenues
by Call Type
• Average Billable
Minutes Per Call
The Fifth
through Seventh Reports: Status of Conferencing in North America, Europe
and the Pacific Rim, Full Year 2002¾ TeleSpan will summarize
data collected for both the first half and second half of 2002, using
a reporting format similar to that used in its reports on the second half
of 2002.
The Eight
Report: Audio Bridge Port Sales, 2002—TeleSpan will report on
the sales of audio bridging equipment to service providers and end-users
by region of the world. Sales data will be broken out separately in these
categories to illuminate findings and conclusions in the other reports
in this series.
The Ninth
Report: Status of Conferencing First Quarter 2003 Summary—This
short report will quantify the growth, or lack thereof, of the different
forms of conference calls and Webconferences for the first quarter of
2003, giving clients an early look at the first half of 2003. In future
years, TeleSpan will be able to provide comparative data for quarter-to-quarter
comparisons.
The Tenth
through Twelfth Reports: Status of Conferencing in North America, Europe
and the Pacific Rim for the First Half of Calendar Year 2003—Like
the earlier reports, this series of reports will provide a comprehensive
view of the use of voice conference calls, voice-and-data conference calls,
and streaming during the first half of the year 2003. Its up-to-date view
of the market will assist clients in their planning for the year 2004.
The Thirteenth
Report: Status of Videoconferencing Services in North America, Europe,
and the Pacific Rim for the second half of 2002 and Full Year 2002¾
In a format similar to TeleSpan’s reports on the use of voice
conference calls around the globe, TeleSpan will provide videoconferencing
usage data through service bureaus for full-year 2002, measuring multipoint
calls and, where possible, point-to-point calls, keeping a keen eye and
ear on the early testing of and migration toward IP and the use of voice-add
during video calls.
The Fourteenth
Report: Status of Videoconferencing Services in North America, Europe,
and the Pacific Rim for the First Half of Calendar Year 2003¾
TeleSpan will provide a half-year report on videoconference service bureaus,
in the format described for Report Thirteen.
The Fifteenth
Report: Customers’ Changing Demands—With the objective of identifying
emergent trends before they are readily discernible in the marketplace,
TeleSpan’s researchers has assembled a group of users of voice, data,
and videoconferencing services and will interview each of them in depth.
Close attention will be paid to user organizations’ plans for deployment
of VoIP as they relate to voice, video, and multimedia conferencing. This
group of users has been assembled with the intention of using it as a
panel, in the proper sense of the word—that is, the same companies will
be reinterviewed subsequently at least once a year, possibly more frequently,
to identify more precisely how plans and attitudes are changing.
The Sixteenth
Report: Status of Conferencing Third Quarter 2003 Summary—This
short report will quantify the growth, or lack there of, of the different
forms of conference calls and Webconferences for the third quarter of
2003, giving clients an estimate of the full year 2003. In future years,
TeleSpan will be able to provide comparative data for quarter-to-quarter
comparisons.
The Seventeenth
Report: Updated Forecast of Conference Call Growth, 2003–2006—TeleSpan
will use data collected for the full-year 2002 and the first half of 2003
to update the forecasts we provided to clients last year. The forecast
will include assumptions.
Long Live
Audio Conferencing: Periodic Report Preview Newsletters—TeleSpan
will issue at least two preview reports in a newsletter format, allowing
clients to get timely updates on trends TeleSpan is seeing as one or more
of the seventeen formal reports are being finalized.
Biographical Information
Elliot M. Gold
President, TeleSpan
Publishing Corporation
Mr. Gold is considered
by most to be the world’s leading authority on teleconferencing and videoconferencing.
Since founding TeleSpan Publishing Corporation in 1981, he has consulted
to over 75 providers of teleconferencing equipment and services, including
several investment bankers and venture capitalists. Mr. Gold’s clients
come from the United States, Canada, Japan, Singapore, Australia, the
United Kingdom, Finland, Norway, and Sweden. He co-founded and for over
a decade co-managed the Outlook study, the most comprehensive and widely
quoted annual study of the teleconferencing and videoconferencing market
in the world. Mr. Gold is the author of a series of special sections on
the field of teleconferencing and videoconferencing published in FORTUNE,
BusinessWeek, and Dow Jones Economia.
Martin C.J.
Elton, Ph.D., Professor of Communication in the Tisch School of the Arts
at New York University
Martin Elton is
a Professor of Communication in the Tisch School of the Arts at New York
University. He joined NYU in 1976 to design, and subsequently to chair,
its master’s degree program in interactive telecommunications. From 1987
through 1989, while on leave from NYU, he was Visiting Professor of Business
at the Columbia Business School and Director of its Center for Telecommunications
and Information Studies. Prior to 1976, he was Director of the Communications
Studies Group at University College London. Earlier he had appointments
at the Organization for Economic Cooperation and Development in Paris,
the Travistock Institute of Human Relations in London, and the Wharton
Business School.
Since 1970, Dr.
Elton has conducted research on the evaluation and implementation of new
telecommunications applications and services, together with associated
issues of corporate strategy and public policy. He has acted as principal
investigator for research projects funded by the National Science Foundation,
the Corporation for Public Broadcasting, the National Telecommunications
and Information Administration, AT&T, and the Canadian Department
of Communications, as well as OECD and various European corporations and
government agencies. His larger consulting clients have included AT&T,
New York Telephone, US West, CBS, and Citibank.
Dr. Elton has
published widely in the telecommunications field; his latest book was
Integrated Broadband Networks: The Public Policy Issues (North-Holland,
1991).
Richard Dalton,
Keep/Track Corporation
Mr. Dalton’s experience
in the information systems industry spans twenty-eight years: as an influential
consultant, editor, writer, and industry analyst. He is president of Keep/Track
Corporation (Falmouth, Massachusetts), and was a research affiliate of
the Institute for the Future (Menlo Park, California) for nine years,
specializing in emerging technologies and their business and social implications.
Mr. Dalton was
formerly the editor of the Whole Earth Software Catalog. He founded and
wrote Open Systems: Managing Office Technology, a monthly newsletter
focused on office technologies, and has been a featured columnist for
InformationWeek and Windows magazines. He also wrote a column
on information technology futures for Byte.com.
He has consulted
with major industry and technology clients, such as Procter & Gamble,
Eastman Kodak, IBM’s Thomas J. Watson Research Center, The Swedish Telecommunications
Administration (Telia), Lotus Development, Compaq Computer, Hewlett-Packard,
Genentech, US Robotics, and The Hartford Insurance Companies. He has recently
spoken at Comdex, the Groupware Users Exchange, the InterClass European
Conference and the Federal Government Group Decision Technology Conference.
Rachel Thompson
Rachel W. Thompson
has 15 years experience in communications and media, both as a journalist
and as a practitioner. Ms. Thompson directed cable modem field trials
for America Online Inc. starting in 1995, and went on to become a product
and business development director for new multimedia products including
streaming audio and You've Got Pictures, AOL's digital imaging partnership
with Kodak. Ms. Thompson also served as a senior manager of investor relations
before leaving AOL in June 1999 to return to writing.
From 1989 to 1995
Ms. Thompson was a reporter and editor for cable industry publications
Multichannel News and Cable World. She has a master's degree
from NYU's Interactive Telecommunications Program, where her thesis addressed
international satellite copyright, and a bachelor's degree from Hampshire
College. Ms. Thompson lives in Washington, D.C.
|