Futurewatch: Enterprise—Bucking the Trend
The ingredients for sniffing out growth prospects in the business video technology sector are seemingly in place. Recent stock market gyrations fuel uncertainty. Continued credit-crunch concerns limit available capital for corporate investment in sophisticated webcasting solutions. And one of the leading sectors for buying technology that enables online video—the financial services industry—continues to wrestle with its own downturn of historic proportions.
Put it all together, and it’s a convincing recipe for significant spending cutbacks in online video—a segment of the technology market still striving to establish itself as "must have" technology in the halls of corporate America.
Nevertheless, the ripple effects of economic turmoil have yet to wash over the business webcasting sector. As industry executives head into 2009, most are reporting that the sales pipeline is still full and that corporate users are still exploring new investments in video-enriched business communications.
And leading vendors in the business webcasting sector, such as Accordent Technologies, Inc., continue the hunt to bring new employees on board to address the growing wave of opportunities. "We have not seen any pullback in demand as a result of the economic crisis," says Accordent chief executive officer Mike Newman. "We’re as busy as ever."
Undoubtedly, hurdles remain to be crossed in 2009. One uncertainty is whether the end of 2008 may somehow represent a last hurrah for webcast spending growth as corporations spend down their 2008 budgets, which were allocated before the worst of the current economic storm hit the corporate sector.
Most executives involved in the business webcasting market, however, say that they have not yet seen major cutbacks in 2009 spending plans. One explanation for the resiliency of the webcasting sector may be that it promotes technology many companies perceive as a cost-reduction tool. Technology vendors have long touted online video as a platform that saves money by allowing companies to forego travel expenses for large corporate meetings by shifting selected regional events online.
Another factor favoring the continued expansion of the corporate webcasting sector is the growing diversity of the companies implementing the technology. No longer a novelty deployed by Fortune 500 companies with huge technology budgets, corporate webcasting spending increased nearly across the board in 2008.
A higher percentage of companies from virtually every corporate size-category boosted their spending on online multimedia in 2008 over 2007, according to a survey of 1,212 executives conducted by Interactive Media Strategies (IMS) in the second quarter of 2008. For instance, 46% of companies with more than 25,000 employees increased their webcasting budget in 2008 compared with 31% that increased online multimedia budgets in 2007.
And this intention for expanded online multimedia spending appears to span the corporate spectrum. The only set of companies where executives demonstrate a decreased likelihood for boosting online multimedia budgets in 2008 are the firms employing less than 100 people—a sector of the market that typically accounts for only a tiny fraction of all online multimedia spending.
Early indications are that increased spending on webcasting will carry through to 2009. IMS forecasts that total spending on webcasting technologies in the coming year will total $605 million, up more than 30% from $460 million in 2008.