Industry Reports
 
 

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.

Order TeleSpan’s Sixth Annual Future of Global Conferencing Study:
Navigating through Pricing "Free Fall" and the Threat of Microsoft

 


 

Elliot has retired – it’s true!