Video Conferencing Market Size, Share & Trends Report

Video Conferencing Market Size, Share & Trends Analysis Report By Component (Hardware, Software, Services), By Deployment, By Enterprise Size, By End Use, By Region, And Segment Forecasts, 2020 - 2027

  • Published Date: Apr, 2020
  • Base Year for Estimate: 2019
  • Report ID: GVR-3-68038-081-1
  • Format: Electronic (PDF)
  • Historical Data: 2016 - 2018
  • Number of Pages: 155

Report Overview

The global video conferencing market size was valued at USD 3.85 billion in 2019 and is expected to register a CAGR of 9.9% from 2020 to 2027. Video conferencing refers to the process of conducting meetings using telecommunication technologies and involves a real-time, two-way transmission of audio and video content. Video conferencing aids companies in faster decision making and eliminates travel time and associated costs.

U.S. video conferencing market size

It also helps reduce operational and management costs, subsequently improving productivity. Increasing adoption of technologies, such as facial recognition, to detect and authenticate the meeting participants is significantly boosting the growth of the market. Furthermore, increase in the usage of cloud-based solutions and the incorporation of Virtual Reality (VR) in these solutions have accelerated market growth.

Rapidly growing demand for video communication on account of globalization of businesses geographically scattered business operations, and remote workforce management is a major factor driving the market. As certain fields such as telemedicine and online education have become increasingly popular in the emerging economies, such as Brazil, India, and the Philippines, demand for these solutions has risen significantly. In recent years, there has been a rapid rise in the number of online international workshops, seminars, and conferences, thus further increasing the demand for these solutions.

Furthermore, various multinational companies such as SAP SE and IBM Corporation are focusing on the adoption of these solutions for training their employees, which bodes well for the market. For instance, IBM Corporation is using video conferencing solutions from Cisco Systems, Inc. for providing unified training to their employees placed at various locations across the globe.

Various companies are using video conferencing as a technological tool to enhance interaction and collaboration among geographically dispersed teams. They are also increasingly focusing on reducing communication costs, which has created a major opportunity for the industry players, subsequently leading to the development of advanced conferencing solutions and services, like telepresence and webcasts. In recent years, companies such as Axis Communications AB, Robert Bosch LLC, and Sony Corporation have collaborated to establish standards, including Open Network Video Interface Forum (ONVIF). ONVIF defines the way through which video devices communicate with each other over the Internet Protocol (IP) technology.

There has been a significant rise in the usage of telepresence in the education and healthcare sectors as it offers a realistic way of interaction between the participants. In the healthcare sector, telepresence robots are used to provide a virtual remote presence, enabling doctors to assist their patients located at a remote location. Furthermore, the integration holographic technology in telepresence has enhanced the demand for telepresence systems.

Development of 5G technology that uses Voice over Internet Protocol (VoIP) technology is providing lucrative opportunities for companies in developed economies, such as U.S., U.K., and Germany. To capitalize on these opportunities, market players such as Cisco Systems, Inc. and Microsoft Corporation are emphasizing on the development of video conferencing systems that automatically routes call over the VoIP network. For instance, in June 2018, Cisco Systems, Inc. launched their Cisco Webex Edge Connect, that uses Cisco Systems, Inc.’s Unified Communications Manager, which automatically routes calls over VoIP network. In addition, the market has witnessed significant growth owing to the increasing adoption of cloud-based communication solutions, such as AvayaLive Video and Zoom.

However, high initial investments in the purchase and deployment of market solutions, along with concerns related to the privacy and security of information, are anticipated to be the major challenges for the market. The high cost of deploying these solutions is attributed to the use of data security software solutions for the secure transmission of data. Several companies such as Zoom and Hall are providing free video conferencing tools that are ideally suited for SMEs.

However, limited functionality provided by these systems hinder their usage. Some of the popular subscription models are monthly subscription and annual subscription. The monthly subscription model on average costs around USD 25 per month. In the annual subscription model, companies such as Cisco Systems, Inc. and Plantronics, Inc. offer subscription plans that costs around USD 500 annually for one room and allows hosting of up to 25 users.

COVID-19 Impact Insights

The outbreak of the COVID-19 pandemic in January 2020 has resulted in the cancellations of various corporate events, such as investor presentations, international seminars, and trade shows. As a result, the hosts of these events are focusing on the adoption of video conferencing systems to host these events, positively impacting market growth. Furthermore, various governments and law enforcement agencies are focusing on carrying out their operations through these systems owing to the lockdowns imposed across countries. For instance, the Supreme Court of India on April 8, 2020, issued a notice to regional courts for carrying out their judgments through video conferencing.

Most of the corporate organizations have adopted the ‘Work from Home’ strategy owing to the risk of the pandemic. Thus, they are increasingly adopting these systems in order to track work-related activities and meetings. As a result, network analytics companies such as Kentik have reported a significant rise in the video traffic. Furthermore, various governments are focusing on holding their meetings on video conferencing. For instance, the Eighth International Conference on Learning Representations (ICLR 2020) that was to be held in March 2020 was canceled because of COVID-19 and is later scheduled in April 2020 as a virtual conference.

Although the video conferencing market is gaining traction owing to the outbreak of COVID-19, this factor in itself may also hinder the market growth, particularly of the hardware component segment. Moreover, governments in countries such as China, India, and Japan have mandated the service providers to lower the video quality of these services. On account of lockdowns, there has been an increase in the usage of internet for work-related activities as well as for streaming services, such as Prime Video, Hulu, and NetFlix. Various network operators have reported increased strain on their networks owing the aforementioned factors. This is likely to impact the adoption of these systems.

Component Insights

The hardware segment dominated the market in 2019 owing to the emergence of IoT, which has enabled the rapid integration of hardware with each other and into cloud-based software solutions. This factor has enhanced the interoperability among devices of various companies. Furthermore, growing emphasis of camera manufacturers, such as AVer Information Inc., on the development of video conferencing cameras with features, such as facial recognition and artificial intelligence, is boding well for the segment. For instance, in June 2019, AVer Information Inc. launched their CAM540 - an advanced 4K video conferencing camera that features SmartFrame function, which detects faces to quickly fit the meeting participants on the receivers’ screen. Furthermore, in recent years, the microphones have witnessed a surge in demand on account of increasing usage of these systems in coaching activities for various sports, such as cricket, football, and badminton.

The services segment is expected to witness significant growth over the forecast period owing to rise in the demand for services related to project consulting, employee training, and deployment of new solutions. Small and medium-scale companies are adopting these services to rapidly expand their geographic operations by establishing a centralized communication platform that use advanced technologies, such as 4G and VoIP. This has enhanced the interaction between teams situated in multiple locations across various cities and countries. Furthermore, companies operating in the market such as Adobe, Inc., and Cisco Systems, Inc. are emphasizing on establishing long-term contracts with large enterprises, which is expected to fuel the segment growth.

Enterprise Size Insights

The large enterprises segment is driven by increasing adoption of video conferencing solutions among large enterprises to establish collaborations amongst employees located in various locations. In the recent years, various companies in the IT and telecom sector have established long-term agreements with service providers, such as Cisco Systems, Inc., and Logitech S.A., further fueling the segment growth. For instance, in June 2016, Tech Mahindra provided a contract to Cisco Systems, Inc. under which Cisco Systems, Inc. will manage the former company’s video conferencing system for a period of seven years.

The small and medium enterprises segment is expected to witness considerable growth in the forthcoming years. This is attributed to government support in providing funds to small and medium enterprises for the adoption of cloud-based solutions, which is expected to drive the demand for video conferencing among SMEs. For instance, the Government of Canada provided funds to start-up companies for the adoption of cloud-based solutions. According to the research conducted by the National Association of Software and Services Companies (NASSCOM), 60% of SMEs in India have adopted cloud-based solutions. It is expected to rise to 75% over the next eight years. In addition, emergence of cloud-based solutions that have lower costs as compared to on-premise software is anticipated to enhance the demand for these solutions among SMEs.

End-use Insights

The corporate segment dominated the market in 2019 as the video conferencing system acts as an effective communication tool and helps reduce travel and operational costs for small as well as large scale enterprises. Furthermore, usage of this technology has increased significantly in corporate companies for cost-effective, real-time, and long-distance communication and for augmenting the productivity of various teams based in multiple locations. Moreover, introduction of VoIP has allowed companies to make use of the underlying network infrastructure that consists of leased lines for the purpose of free communications. Furthermore, companies in the market such as Microsoft Corporation and Huawei Technologies Co., Ltd. are emphasizing on the development of these systems, especially for corporate companies. For instance, in March 2019, ezTalks launched ezTalks Meetings, a video collaboration tool that includes a whiteboard that allows participants to communicate through drawing. It also includes a screen sharing feature allowing managers to track the performance of their resources.

The healthcare sector is expected to witness significant growth in the forthcoming years. Increasing need for immediate medical assistance to patients located in remote locations is fueling the adoption of these solutions in the healthcare sector. Increasing focus of various healthcare organizations on the provision of medical training to its employees using these solutions is supporting the segment growth. Furthermore, increased adoption of telemedicine services in developed economies has significantly boosted the growth of the healthcare segment. According to the American Telemedicine Association, as of September 2019, 76% of the healthcare organizations in the U.S. have adopted telehealth services. Furthermore, integration of Electronic Health Records (EHRs) has allowed healthcare organizations to deliver personalized telemedicine services to their patients.

Deployment Insights

The cloud segment is anticipated to witness remarkable growth over the forecast period. Cloud-based solutions offer increased convenience to end-users by enabling easy access to the video conferencing platform through multiple channels, such as mobiles and laptops. Furthermore, service providers are emphasizing on the adoption of a software-as-a-service platform for the provision of video conferencing services that has attracted a large number of small- and medium-scale enterprises. Moreover, growing popularity and adoption of cloud-based solutions owing to the development of better encrypted and password-protected solutions is expected to enhance the growth of the segment. Additionally, the ease provided by cloud-based deployment for up-gradation of services while eliminating the need to upgrade the hardware is anticipated to boost the segment growth.

Europe video conferencing market share

The on-premise segment is anticipated to witness significant growth in the coming years. This is attributed to the increasing adoption of on-premise method of deployment by large organizations in response to the growing concerns regarding data theft and effective maintenance of information security systems. Different organizations are adopting the on-premise type of deployment as it allows easy customization of software as per the client’s business processes. Furthermore, companies such as ezTalks Logitech International S.A. and Microsoft Corporation are emphasizing on the enhancement of their on-premise software by improving the ability to hold more number of participants. For instance, in September 2019, ezTalks updated its existing video conferencing software - ezTalks Rooms, which allows hosting more than 9,000 participants in a meeting. These factors are expected to further boost the growth of the market.

Regional Insights

North America is leading the market owing to the presence of well-established businesses and high technology adoption in the region. As the U.S. and European markets are relatively mature in terms of the adoption of these systems, they are expected to witness demand either for upgradation or replacement of systems. Increased demand for visual meetings and continuous access to high-quality internet have spurred the growth of the market in U.S. North American companies are the early adopters of emerging technologies, and hence the region is expected to maintain is lead over the forecast period. Certain enterprises in the region provide innovative services, such as digital tours of venues. For instance, the Vancouver Biennale, a public art exhibition, offers artwork tours via mobile phones. Moreover, growing adoption of virtual private networks across business enterprises and educational universities is anticipated to propel the regional market growth.

Asia Pacific is expected to emerge as the fastest-growing region over the forecast period. Increasing number of technology- and service-based start-ups in India and China is expected to propel the regional market growth. Strong presence of business and knowledge process outsourcing companies in the region is also expected to be a major factor driving the industry. Advancements in mobile broadband technologies, such as High-Speed Downlink Packed-Access (HSDPA) networks and WiMAX, in countries, like India and Japan, are expected to accelerate the growth of the regional market. Additionally, rise in the number of startups in the region has significantly boosted the adoption of these systems. Furthermore, the region’s education sector is adopting visual collaboration solutions, such as web conferencing and video conferencing, which is subsequently expected to contribute to market growth.

Key Companies & Market Share Insights

Key industry players include Adobe Inc.; Array Telepresence Inc.; Avaya Inc.; Cisco Systems, Inc.; Huawei Technologies Co., Ltd.; Logitech International S.A.; Microsoft Corporation; Plantronics, Inc.; Vidyo Inc.; and West Corporation. The players are focusing on product innovation, development of secure data transmission solutions, and enhanced integration capabilities to meet customer expectations. Currently, the industry is in the growth phase and leading industry players are focusing on the acquisition of local companies in order to expand their product portfolio, customer base, and geographical presence. For instance, in April 2019, Adobe, Inc. launched the new version of video conferencing software - Adobe Connect, which is equipped with screen sharing functionality. Furthermore, the company made the product available in a cloud deployment model.

Companies such as Adobe Inc.; Cisco Systems, Inc.; Logitech International S.A.; and Microsoft Corporation have a significant market presence across the globe owing to the availability of a strong R&D division, high-tech production facilities, and a skilled workforce. These companies have a well-established global network of partners in the U.S., India, China, Brazil, and European countries and are mainly focusing on product innovation. Furthermore, various companies such as Plantronics, Inc., and Cisco Systems, Inc. are focusing on mergers and acquisitions to increase their customer base. For instance, in March 2018, Plantronics completed the acquisition of a video conferencing hardware developer, Polycom for a sum of USD 2 billion. This strengthened the former company’s video conferencing business.

Video Conferencing Market Report Scope

Report Attribute

Details

Market size value in 2020

USD 4.2 billion

Revenue forecast in 2027

USD 8.6 billion

Growth Rate

CAGR of 9.9% from 2020 to 2027

Base year for estimation

2019

Historical data

2016 - 2018

Forecast period

2020 - 2027

Quantitative units

Revenue in USD billion and CAGR from 2020 to 2027

Report coverage

Revenue forecast, company ranking, competitive landscape, growth factors, and trends

Segments covered

Component, deployment, enterprise size, end use, and region.

Regional scope

North America; Europe; Asia Pacific; Latin America; and MEA

Country scope

U.S.; Canada; U.K.; Germany; France; India; Japan; China; Brazil

Key companies profiled

Adobe Inc.; Array Telepresence Inc.; Avaya Inc.; Cisco Systems, Inc.; Huawei Technologies Co., Ltd.; Logitech International S.A.; Microsoft Corporation; Plantronics, Inc.; Vidyo Inc.; and West Corporation.

Customization scope

Free report customization (equivalent up to 8 analysts’ working days) with purchase. Addition or alteration to country; regional & segment scope.

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Segments Covered in the Report

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2016 to 2027. For the purpose of this study, Grand View Research has segmented the global video conferencing market report on the basis of component, deployment, enterprise size, end use, and region:

  • Component Outlook (Revenue, USD Million, 2016 - 2027)

    • Hardware

      • Camera

      • Microphone & Headphone

      • Others

    • Software

    • Services

      • Professional Service

      • Managed Service

  • Deployment Outlook (Revenue, USD Million, 2016 - 2027)

    • On-premise

    • Cloud

  • Enterprise Size Outlook (Revenue, USD Million, 2016 - 2027)

    • Large Enterprises

    • Small & Medium Enterprises (SMEs)

  • End-use Outlook (Revenue, USD Million, 2016 - 2027)

    • Corporate

    • Education

    • Healthcare

    • Government & Defense

    • BFSI

    • Media & Entertainment

    • Others

  • Regional Outlook (Revenue, USD Million, 2016 - 2027)

    • North America

      • The U.S.

      • Canada

    • Europe

      • The U.K.

      • Germany

    • Asia Pacific

      • China

      • India

      • Japan

    • Latin America

      • Brazil

    • Middle East & Africa (MEA)

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