New analysis from Frost & Sullivan entitled "North American CSP-based Videoconferencing Services Market" finds that the market earned revenues of over $265.4 million in 2008, with a growth of 11 percent over the previous year. The videoconferencing CSP-based managed services market was at $151.3 million in 2008 and is expected to reach $375.5 million by 2014, growing at a compound annual growth rate (CAGR) of 16.4 percent.
The key business drivers for videoconferencing adoption are increasing globalization and the business need for reducing costs while improving productivity. A growing focus on green initiatives is also expected to become a driver for the market as businesses reduce their carbon footprint.
However, the economic slump is putting pressure on IT budgets, and this is likely to lower the momentum of videoconferencing markets compared to that of the last two years.
Nevertheless, the impact of the economy on conferencing markets will be bi-directional. On one hand, companies that face a severe credit crisis and survival issues may have to cut corners, which include capital expenditure (CAPEX)-oriented investments such as videoconferencing. On the other hand, videoconferencing helps companies to reduce travel costs. (For more on videoconferencing, click here).