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Cisco seeking SMB’s as they introduce a low cost Hosted Telepresence Service November 16, 2011

Posted by TelUS Consulting Services in Data Networking catagory.
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This week’s announcement from Cisco (Nasdaq: CSCO) that it was introducing a $99-a-month videoconferencing service, Cisco TelePresence Callway, aimed squarely at the SMB market is a pretty good indication that the networking giant and leader in the video conferencing space isn’t waiting around for the competition to reduce its market share.

Cisco said the hosted service reduces the complexity and costs of TelePresence that slowed adoption by SMBs. Cisco also introduced Jabber Video, a standards-based, HD video-calling software application that lets Mac and PC users join a conference hosted by a TelePresence user. The free application will go into beta in 2012.

Cisco, which introduced its benchmark room-based TelePresence system five years ago,is agressively addressing any chances being overtaken by any of its competitors any time soon; wanting to preserve it’s market share that exceeds 50 percent.

Infonetics Research earlier this month said revenues from enterprise telepresence and video conferencing systems were way up in the first half of this year, 24 percent above a year ago. The global video conferencing and telepresence equipment market set a record for quarterly revenue in the second quarter, increasing 21 percent from the previous quarter to $683 million, and increasing year-over-year 34 percent. Infonetics predicted an increase for the entire year that would be in the “strong double digits.”

The enterprise segment has long been a target of the biggest video conferencing vendors, and projections have long said there was big money to be made in the segment.

But SMBs and smaller enterprise customers have begun to look more appealing to the segment, especially as travel costs continue to be a bugaboo, and companies look to contain costs in the economy of what feels like a perpetual recession.

Infonetics says the market should see double-digit growth through 2015, “thanks to demographic and communication trends favoring video, increasing acceptance of video among users, and specific use cases like telelearning and telemedicine.”

The past couple of months have seen a markedly different picture of videoconferencing emerging.

Polycom (Nasdaq: PLCM), Radvision (Nasdaq: RVSN) and startup Vidyo all have introduced new mobile clients, aimed especially at tablets and at a workforce that’s spending more time than ever away from the office. And, nearly every other vendor has introduced some low-cost iteration of their video conferencing product aimed at expanding down market.

Cisco was taken to task earlier this year for a lack of innovation, and CEO John Chambers spent two quarters trying to reshape the company (and perhaps trying to reignite that innovation spark). Callway may not be Cisco’s biggest innovative leap, but at least it looks like it wants to get back in the game.

As I have mentioned before on this blog, the competition better watch closely, they may move somewhat slowly but the giant in the market will roll over you if you do not remain nimble.

Joe Buck, NCE

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