Frost & Sullivan: Environment Policies and Virtualisation of Workplace Drive the Uptake of Web Conferencing Services in Europe

LONDON, December 1 - As companies look for ways to reduce their travel expenses while
maintaining their productivity levels, web conferencing is becoming an
engrossing topic in the European market. Hosted services are the dominant
model in delivering web conferencing services to customers, as significant
reduction in companies' capital expenditure (CAPEX) has spurred growth across
the enterprise communication sector. Hosted services have gained popularity,
as they do not require expensive in-house maintenance and upgrades.

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New analysis from Frost & Sullivan (www.conferencing.frost.com),
European Hosted Web Conferencing Services Market, finds that the market
earned revenues of US$162.6 million in 2008 and estimates this to reach
US$657.1 million in 2014, at a compound annual growth rate (CAGR) of 26.2 per
cent.

"The global recession and stringent environmental laws introduced by the
European Parliament in 2008 are driving organisations to reduce their travel
expenses and comply with 'green' policies", says Frost & Sullivan Research
Analyst Iwona Petruczynik. "Web conferencing services certainly help in
achieving these objectives."

The hosted web conferencing services segment grew at 14.9 per cent from
2007 to 2008, mainly due to growing awareness about web conferencing and
greater penetration among vertical, small, and medium businesses (SMBs). More
mature markets such as Germany, France and the United Kingdom are likely to
continue exhibiting an overall high demand for web conferencing having high
awareness of this tool, a well-developed infrastructure and boast the
presence of several global companies. Markets like Italy, Spain, or Ireland,
where conferencing services have been present for some time now, and emerging
markets such as Poland and Hungary, where these services are only gaining in
popularity will see an expansion as they continue to adopt and implement
web-based technologies.

In the past, web conferencing was perceived as difficult to use, with
many SMBs regarding it as out of their reach. This outlook has significantly
influenced the growth rate of these services in the SMB sector. However, with
new, integrated solutions presently entering the market, this situation is
changing; web conferencing is becoming more affordable.

Additionally, the unceasing globalisation and the increasing
virtualisation of work are boosting the growth of web conferencing services
in Europe. Rising interest in Web 2.0 technologies — such as wikis, blogs
and social networking sites - in the enterprise sector is also changing the
communication models between businesses.

Despite the positive outlook for web conferencing services in Europe, the
market is faced with challenges such as intensifying competition, escalating
pricing pressure and general low awareness on web conferencing services,
especially in the Central and Eastern European (CEE) region. Furthermore,
poor infrastructure and low penetration of the SMB market in Europe is also
hindering the mainstream adoption of web conferencing.

"The entry of big, global web conferencing services vendors such as Cisco
and Microsoft into the European market is likely to threaten the smaller
regional participants," notes Petruczynik. "These local independent providers
are responding by offering more competitively priced services which, in turn,
will impel the larger vendors to lower prices."

Web conferencing services providers also have to deal with a highly
fragmented European market. There is a considerable need for language
integration and support, as many workers do not speak English - in which most
services are supported. Additionally, a preference for conducting
face-to-face meetings, especially among business people in the CEE region, is
delaying the rapid growth of web conferencing services in this region.

Web conferencing services providers aiming to expand their presence in
the European market should ensure they are one step ahead of their customers
in offering new and enhanced services. For instance, the growing popularity
of Web 2.0 tools as well as instant messaging in the enterprise area is
creating opportunities for web conferencing services providers to incorporate
these tools into their services.

"For example, Web 2.0 tools in the large economies of Germany, France,
and the United Kingdom are finding their way into enterprise sectors at a
much faster rate than in the CEE countries," concludes Petruczynik. "Web
conferencing services providers should customise their marketing strategies
and their product offerings to take these conditions into account."

If you are interested in more information about this research, send an
e-mail to Joanna Lewandowska, Corporate Communications, at
joanna.lewandowska@frost.com, with your full name, company name, title,
telephone number, company e-mail address, company website, city, state and
country.

European Hosted Web Conferencing Services Market is part of the
Conferencing & Collaboration Growth Partnership Services programme, which
also includes research in the following markets: Visual Collaboration,
Enterprise Communications, and Communication Services. All research services
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trends that have been evaluated following extensive interviews with market
participants.

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    European Hosted Web Conferencing Services Market
    M460 - 64

    Contact:
    Joanna Lewandowska
    Corporate Communications - Europe
    P: +48-22-390-41-46
    E: joanna.lewandowska@frost.com

www.frost.com

Joanna Lewandowska of Frost & Sullivan Corporate Communications - Europe, +48-22-390-41-46, joanna.lewandowska at frost.com