MarketScope for Telepresence and Group Video Systems

The telepresence and group video market saw a significant shift in customer preference during the past 12 months, with the emphasis on dedicated multiscreen rooms transforming to more flexible and modular alternatives for group video. While dedicated room deployments continue to provide an anchor experience that remains critical to executive sponsorship, enterprises are shifting their focus from quality to reach. In addition to self-contained single-screen telepresence systems, customers are investing in modular, single codec group video systems — a market that Gartner expects will demonstrate unit growth at 10% per year through 2016. The group video experience is increasingly being extended to personal video endpoints as well, which are taking the place of audio add-on for conference call participants. These personal endpoints include softclients for desktop and mobile platforms, as well as a growing range of purpose-built appliances that resemble an auxiliary flat screen monitor.

The core attributes of telepresence and group video that relate specifically to this MarketScope include:

• Multicodec video endpoint products accommodating multiple screens of HD video and content sharing, with a minimum resolution of 720 progressive (p) at 30 frames per second (fps)
• Single-screen video endpoints, including softclients and appliances, that interoperate natively with each other and with multicodec systems
• For multicodec solutions in particular, standardized furniture designs, high-quality audio and optional room treatment to create a consistent user experience
• Simplified UIs that facilitate call production, content sharing and the management of video layouts during calls among multiple locations

Additional related, but not necessary, elements include endpoint management, scheduling integration with existing calendaring and scheduling tools, and the ability to interwork with existing investments in unified communications (UC). In addition to dedicated (and now interconnected) exchanges for video calling, the market has seen the emergence of cloud providers capable of facilitating cross-platform calling over public and private networks. Despite these developments, the growth in video calling volume remains dominated by internal calling to a broader range of endpoints, not calling or conferencing between enterprises.

Technology innovation in 2012 has been focused on extending the options for personal video calls, as enterprises prefer to employ different ratios of UC endpoints, dedicated video softclients and appliance-based desktop endpoints to extend the group video experience. Major vendors have extended their reach to mobile devices, offering clients for iOS and Android, with a primary focus on tablet form factors. Scalable Video Coding (SVC) is becoming more prevalent as an architecture that places less emphasis on intermediate infrastructure by focusing on routing media layers per endpoint rather than transcoding. Finally, vendors are selectively virtualizing parts of their supporting video infrastructure to drive scale and adoption. This transformation has focused primarily on areas like network address translation and firewall traversal early phases, with core conferencing infrastructure coming in successive phases over the next two to four years.

Key verticals in 2012 for telepresence and group video include consumer products, financial services, retail and manufacturing, with the biggest increase in Gartner inquiry volume coming from the public sector.

Unit growth in the group video and single-screen endpoint market globally is expected to have a compound annual growth rate (CAGR) of 11.3% through 2016, on a base of approximately 306,000 endpoints in 2012. With increasing competition, new form factors and a general shift in preference to single-screen systems, multicodec system revenue will decline at about 9.7% over the same period. This decline will be more than offset by revenue growth in single-screen and personal appliance video. While enterprises increasingly expect growing interoperability with UC and other legacy video systems, the initial decision for immersive telepresence and group video remains executive-driven.

The primary uses of immersive telepresence and group video technology are:

• Senior leadership meetings, strategy sessions, virtual teaming and "war room" environments
• High-value dialogues and bidders' conferences with strategic vendors and business partners, including bankers and attorneys
• Process enhancement linked to procedures and applications in specific verticals like telemedicine, media and entertainment, and higher education

Although the average selling price of telepresence equipment continues to decline, there is still a high attached rate of managed services to ensure consistent quality of experience. While this MarketScope does not compare the managed service elements directly, these costs (ranging from $2,000 to $5,000 per system, per month for a full concierge service) add considerably to the total cost of ownership (TCO) of a fully featured telepresence solution. Most telepresence vendors have a direct offer for this kind of managed service (although, in some cases, this is based on a white-label relationship with a service provider), but all telepresence vendors will enable their endpoints to be supported over a range of public and private networks, with a range of certified partners.

Market/Market Segment Description

Multiscreen Immersive Telepresence Suites: At the high end of the telepresence market are multiscreen immersive telepresence suites, often costing over $100,000 per system, and their companion single-screen immersive solutions, which typically cost tens of thousands of dollars. We give most weight in this evaluation to these multiscreen immersive types of solutions. These are tailored environments in which the lighting, acoustics, decor and furniture on both sides of the video are tightly controlled (and often identical), giving conference participants from different locations the appearance of being in the same room, thus the "immersive" description.

Room design and room remediation remain important elements of integrating immersive systems into an existing environment, since conference rooms have varying physical attributes. Several telepresence vendors also offer adaptive telepresence systems, often using the same underlying hardware as immersive systems, but delivered with more limited environmental components, such as furniture, lighting and wall panels. These systems are designed to more readily adapt to a given conference room to meet an organization's real estate and cost constraints.

Single-Screen Immersive Systems: These are differentiated from traditional room systems on several fronts. First, they are designed with a common signaling and codec implementation to interoperate natively with multiscreen systems from the same vendor, simplifying integration. In addition, these single-screen systems have an integrated form factor for rapid deployment that often includes lighting and audio to facilitate a more consistent quality of experience when participating in calls with multiscreen systems. The endpoint portfolio for room video is rounded out with modular room systems that allow enterprises to integrate separate cameras, codecs and displays along with room automation as necessary to meet their requirements. These room-based group video calls can be extended to audio-only participants, along with a range of personal video systems including dedicated video clients, personal video appliances and UC clients. While options now exist for extending video calls to the consumer video ecosystem, this type of calling has remained nascent within large enterprises.

All group video systems, especially HD and multiscreen, make high demands on the network, with high-quality, three-screen HD video and collaboration consuming as much as 20 Mbps of dedicated bandwidth. The bandwidth requirements for single-screen telepresence vary by solution, but range from 2 Mbps to 6 Mbps, while most desktop video implementations average 500 Kbps to 700 Kbps. Enterprises continue to run telepresence over dedicated Internet Protocol (IP) networks to ensure the highest possible quality, with private IP implementations outpacing Internet-based connectivity by a ratio of 10-to-1. Organizations continue to converge more video traffic on the private network, albeit often on separate logical networks.

Ratings are based primarily on interactions with vendors, clients and customers that have engaged vendors in the sales cycle and can provide insight into a range of telepresence sales practices, features, capabilities and end-user satisfaction.

We considered several important factors when rating the video telepresence vendors listed in this MarketScope:

• Product quality, especially in immersive multiscreen telepresence systems
• Overall long-term viability as a company (business unit, organization, financial, strategy)
• Flexibility to offer customers a choice of in-house management or a managed service offering
• Flexibility in network transport alternatives
• Ability to facilitate reach and interoperability, including different signaling, endpoint types, video codecs and network transport
• The range, quality and innovation of collaboration tools available with the product

Inclusion And Exclusion Criteria

To be considered for this MarketScope, vendors needed to have commercial offers for both single-screen and multicodec telepresence, and to have sold a minimum of 100 multicodec systems in the preceding 12-month period. Vendors need to have established sales and marketing channels for its group video systems in at least four regions of the globe (North America, EMEA, Asia/Pacific and Japan) and be able to provide customer references on a global basis.

While having a choice of managed service and support offerings is important, managed services are not considered part of the inclusion criteria, nor are managed services considered for the ratings. Enabling video infrastructure to support interworking, transcoding, video proxy and multipoint calling is considered in the ratings, but is not part of the inclusion criteria. The ability to extend the reach of telepresence calls to dedicated video clients (desktop and mobile) and UC clients is also considered in the ratings, but is not part of the inclusion criteria.

Vendors dropped from this MarketScope:

• Radvision, acquired by Avaya
• Magor, did not meet inclusion criteria

Vendors added to this MarketScope:

• Avaya, acquired Radvision
• Huawei

Excluded from the 2012 analysis are providers that have made announcements regarding telepresence technology, but do not yet have referenceable customers. Also excluded are providers that have the technology available, but don't have an end-to-end global distribution and support mechanism in place.

Rating for Overall Market/Market Segment

Overall Market Rating: Promising

Group video remains a market with potential for strong organic growth, with the endpoint mix shifting from purpose-built multiscreen systems to more broadly deployed and more flexible form factors.

Evaluation Criteria

Source: Gartner (September 2012)

Source: Gartner (September 2012)

Vendor Product/Service Analysis

Avaya

Avaya purchased Radvision in early 2012 to enter the videoconferencing market on its own merits as "Radvision, an Avaya Company," having previously rebadged technology from OEM partners. Radvision remains one of the largest providers of video infrastructure worldwide, but has been losing ground in recent years. Its endpoint lineup, which came from the purchase of assets from Italian provider Aethra, has not seen significant traction in the market to date. Radvision has continued to expand the range, and this looks set to continue under Avaya. As a stand-alone company, Radvision remained unprofitable, therefore ownership by Avaya has improved the long-term viability of the product line.

Radivision's Scopia endpoint range runs from mobile and personal softclients through its VC240 personal/executive system to group systems in its XT range and its XT Telepresence multicodec system. All are capable of supporting a range of standards, including H.323 and Session Initiation Protocol (SIP) signaling, and both H.264 Advanced Video Coding (AVC) and SVC encoding. The Elite MCU portfolio runs from small to midscale (a maximum of 120 HD ports at 1080p at 30fps) but is cascadable, and is already in use in some service provider environments. Both endpoints and infrastructure tend to be competitively priced on a comparable basis, and there has been no evidence as yet of any price changes under Avaya.

Avaya has worked quickly to achieve a good level of integration between the Radvision product range and its Aura UC platform and Aura Communication Manager platform, as well as a variety of other Avaya products. However, Radvision's management system will continue to be offered, and the Radvision portfolio will be marketed on its stand-alone merits, in addition to what it can provide in an integrated fashion. Avaya's vision is to introduce more software capabilities to its Aura architecture, and to supply Radvision products alongside this for hybrid deployments of hardware and software endpoints.

Gartner expects Avaya's channels will provide more outlets for the Radvision portfolio, although this is still a work-in-progress. Radvision does have a mix of service provider system integrator (SI) and audio visual (AV) partners. However, in the majority of cases, Avaya remains a second source for these channels, which means that customers seeking Radvision may have to proactively specify this choice. Avaya's videoconferencing marketing efforts are not yet as advanced as other vendors in terms of industry-specific business development activities, but its strength in areas like contact center will provide some interesting function-specific capabilities.

Consider Avaya's Radvision portfolio where other Avaya UC and IP products are in use, or where an alternative to Cisco and Polycom infrastructure is required.

Rating: Promising

Cisco

Cisco remains the global market share leader in this segment, introducing the TX9000 and TX9200 systems in 2012, which will replace the CTS-3000 series and the Tandberg T3 series. While the new high-end systems are more derivative than previous multiscreen releases, they incorporate an advanced touch panel control similar to the T3, and now support 1080p 60fps for video and 1080p 30fps for data sharing. More product line focus is now evident in affordable extensions to this multiscreen portfolio, including the self-contained MX Series systems, as well as the modular and portable SX20. By driving a common codec framework across the endpoint portfolio, Cisco is capable of extending HD calls to Webex participants, as well as to those using an AV-specific version of Jabber. The latter is important for Cisco since it will be made available as a guest client, allowing endpoint customers to more readily call outside the enterprise without relying on additional infrastructure or requiring enterprises to size and fund a pool of concurrent licenses.

Cisco has not chosen to pursue a software multipoint control unit (MCU) strategy as quickly as some of its competitors. However, its hardware-based approach to bridging and transcoding is better suited to ensure an optimal experience for the currently deployed Cisco endpoints. At the same time, other elements of the portfolio, such as the Video Communication Server (VCS), have been virtualized, allowing faster deployment and more flexible capacity to enable endpoint connectivity. Cisco has created delivery models to extend the appeal of video to the midsize enterprise arena, with a video-as-a-service platform that can connect Cisco and non-Cisco endpoints without any customer investment apart from endpoints via uniform resource identifier (URI) dialing. For larger enterprises considering denser levels of video utilization, Cisco continues to leverage its Unified Communications Manager as an authoritative source of call control, making sure network resources are sufficient at the time of call. As more midsize and large enterprises combine videoconferencing, video telephony, broadcast, signage and surveillance — the collective impact of video on the network has become critical. Cisco remains the vendor best positioned to address this overlapping demand set, while still managing interactive video to the quality required by the enterprise.

Consider Cisco for telepresence, group video and video as a service.

Rating: Strong Positive

Huawei

While Huawei has offered videoconferencing technology since 1995, its early focus was on the Chinese domestic market. It is only in the past five years that it has begun to sell videoconferencing on an international basis. Its telepresence business unit sits within an overall unified communications and collaboration (UC&C) product line, created as part of its global enterprise division, which was set up in 2010. With an emphasis on emerging markets, particularly in Asia and the Middle East and Africa, Huawei has grown faster than the market as a whole, with a continued emphasis on multicodec systems, where it is currently the only provider achieving year-over-year growth in demand. It has a broad range of immersive systems, currently with three different multicodec configurations and two single codec configurations in its transaction processing range, in addition to six HD room systems in its Reaction Point range.

Huawei endpoint pricing is competitive or very competitive in each class of products in which it chooses to compete. Its message revolves around not only the cost of the hardware, but also the overall TCO, with an emphasis on bandwidth, power and footprint reduction compared with its competitors. While it has started to develop case studies around a variety of industry verticals, it does not currently have a deep vertical focus. Therefore, its competitive positioning remains centered on price/performance benefits.

The bulk of Huawei's endpoint sales come from mainstream group videoconferencing systems, particularly its VP9030 series. Sales are increasingly focused on 1080p-capable devices; however, it sells everything from personal desktop systems through codecs with embedded MCUs. While Huawei is innovating to bring the cost of its group systems solutions down and make the systems more pervasive, its UC&C product line is not as well-developed, nor does it enjoy as high mind share as leading competitors. It therefore lacks a strong story for the growing integrated softclient part of the market, and has similar capabilities to many other providers when it comes to interworking with leading UC solutions, such as Microsoft Lync. Its infrastructure solutions cover the gamut from entry-level 12-port devices to chassis-based systems designed for carriers and capable of supporting over 1,000 ports. All are hardware-based. Huawei offers a Telepresence Interoperability Protocol (TIP)-compliant gateway to drive telepresence calls between telepresence endpoints from different manufacturers, but its management system currently only supports Huawei endpoints and infrastructure.

Historically, the core of Huawei's business has been centered on selling networking infrastructure to service providers. Thus, it brings a different message to the market, focusing on its deep IMS integration, and working with service providers as channels that can pull through IMS functionality to provide improved management and control. It also tends to work with SIs that have a strong networking focus. However, it doesn't have as many relationships with AV integrators as some competitors, and it is still in the process of setting up its first SI and service provider channels in many markets. As such, sales and support for Huawei's telepresence and videoconferencing offers remain less widespread than for the leaders in this MarketScope. Lack of visibility for its video product range in the more mature markets of Western Europe and North America is one of the main factors limiting Huawei's current market share.

Consider Huawei where a combination of group systems and telepresence is required, or where Huawei enterprise or service provider infrastructures can be leveraged (the latter as part of a managed service offering).

Rating: Positive

LifeSize

LifeSize, a division of Logitech, is one of the top four global providers of videoconferencing endpoints by market share worldwide. The LifeSize endpoint range has not had a significant refresh in the past year. While it remains competitive on a price/performance basis, LifeSize has begun to lose market share to new market entrants focused on both the personal and low-cost end of the market. As to group units. LifeSize has not managed to significantly penetrate the demand for the market leaders. Endpoints range from personal solutions, such as its Passport offer, through group systems to multicodec systems, but the bulk of LifeSize's business remains in the group system space, with a particular emphasis on the small or midsize business (SMB) buyer. These buyers have considered LifeSize for its modularity and competitive price points, but tend to be smaller deployments in the range of 10 to 20 endpoints. LifeSize has started to focus more heavily on building out its infrastructure solutions, for the retail sale of MCUs and to underpin its cloud video as a service offering, LifeSize Connections. It has begun the transition toward software-based capabilities, but to date has not significantly leveraged the scalability of its parent company Logitech to offer mass-deployment solutions beyond its softclient.

Its early lead in offering H.264 AVC-based active call management to deal with the vagaries of best-effort networks has been eroded by other vendors working on both AVC and SVC implementations of H.264. However, it remains a solid competitor for Internet-connected endpoint environments. LifeSize's particular "sweet spot" remains clients looking for a low cost, relatively small scale, Internet-connected set of endpoints for internal calling via an embedded MCU at one or more sites. It has had some success in larger deployments, but lacks the integration partners to support this kind of environment. Its channels are primarily a mix of large distributors and smaller value-added resellers (VARs) and AV integrators. It has had limited success in the service provider space, one of its reasons for developing an in-house cloud offer, LifeSize Connections.

Consider LifeSize when seeking modular solutions for group video or where affordability is a key decision driver.

Rating: Promising

Polycom

Polycom is the second-largest provider of telepresence and group video systems globally, and maintains a strategic focus on endpoints and infrastructure. In the immersive end of the market, Polycom features the ATX, OTX and RPX systems, giving enterprises options that include modular and multipurpose telepresence. Polycom offers a fully immersive rear-projection option that allows meeting participants the freedom to walk around the room, while maintaining an immersive experience. In HD group video systems, Polycom leads with its HDX platform and ranges down to the portable QDX 6000. The Polycom RealPresence Mobile and RealPresence Desktop applications enable iOS and Android tablets, smartphones and PCs to participate in telepresence calls.

Polycom delivers video-enabling infrastructure called the RealPresence Platform that provides management, resource virtualization, border proxies and the fully featured RMX collaboration server. The RMX provides HD multipoint calling, transcoding, and multiprotocol and multivendor interoperability. This platform enables Polycom to respond to the dynamic mix of endpoints and protocols in the enterprise, while retaining the ability to accommodate an installed base of legacy endpoints and technologies. Enterprises are also shifting their preference to single vendor approaches for MCU and endpoints. This is a result of vendor-specific codec implementations that allow for additional optimization between the endpoints and MCU. As a result, vendors like Polycom that have an established MCU presence can more effectively influence incremental endpoint deployments.

As enterprises have increased their focus on adding personal video endpoints into calls, Gartner survey results suggest that UC clients — Microsoft Lync 2010, in particular — have been the preferred approach. This has been a benefit to Polycom, which already natively supports Microsoft Real-Time Video (RTV) on endpoints and bridges, and is extending its Microsoft relationship by licensing its next-generation SVC video codec to Microsoft. More dynamic ad hoc calling between UC endpoints and the videoconferencing estate demands less reliance on intermediate gateways, and Polycom is ideally positioned to enable this type of video calling, since it is able to connect to Microsoft clients without transcoding video.

Gartner continues to view hybrid video deployments that leverage Polycom room solutions in an executive tier and group webcams like the Polycom CX5000 HD for smaller shared meeting rooms. Polycom continues to promote an architecture to facilitate intercompany calling via open standards and interoperability with the Open Visual Communications Consortium (OVCC), a target architecture for intercompany video that has gained support in 2012. Like other vendors in this MarketScope, Polycom is actively looking to balance digital signal processing (DSP)-based transcoding with transcoderless and hybrid architectures.

Consider Polycom video endpoints to extend existing room deployments, complement initiatives to video-enable Microsoft Lync 2010 or to create a full system solution for new builds.

Rating: Strong Positive

Teliris

Teliris was an early innovator in the telepresence and group video space, and continues to chart its course for endpoints. Its VirtuaLive offer for immersive telepresence is the only product to emphasize four screens, adding another dimension for boardroom settings with fewer space constraints. Single- and three-screen scenarios are satisfied by the Teliris Express product, capable of interoperating natively with VirtuaLive at up to 60fps. The same underlying codec technology can also reach into shared meeting rooms with the Teliris StartPoint, which is intended to integrate with existing displays. Desktop participants can join calls from a desktop client called Teliris @nywhere, which offers HD video on suitable Mac and PC configurations. Specialty desktop appliances like the Teliris Nano have been de-emphasized in favor of this approach. Calls are extended to mobile participants as needed through a partnership with Fuze Meeting. Supporting infrastructure for these endpoints can be deployed in the data center, or delivered as a service from Lentaris, the Teliris cloud-based solution for video softswitch and soft MCU.

While Teliris has extended downmarket from its origins in immersive telepresence, its biggest hurdle remains a lack of brand awareness. It registers significantly fewer search hits on gartner.com than any other vendor on this MarketScope, and, as a result, is not considered for a wide range of deals that are looking at telepresence as just one component in a broader videoconferencing or UC strategy. Teliris has established channel distribution with service provider partners like Level 3, but, to date, these relationships have not resulted in meaningful market traction. Teliris has consistently managed to defend the base in large accounts where it has an established presence. Even in these accounts, Gartner has seen limited evidence of additional endpoint penetration.

Consider Teliris where immersive needs extend to in-room collaboration, or where a cloud-based infrastructure solution is attractive.

Rating: Promising

Vidyo

Vidyo has continued to execute effectively on marketing in 2012, driving outsized brand awareness relative to its larger competitors, notably in midsize enterprises. Vidyo's software-centric model for video does not rely on MCUs to accelerate match and transcode calls. As a result, enterprises can trial and deploy Vidyo's solution quickly, an important attribute for midsize opportunities. While now being adopted in different iterations by other vendors, SVC, in the context of their patented Adaptive Video Layering technology, remains a differentiator for Vidyo, enabling it to extend video calls effectively over a broad range of networks. While this capability is not essential to mature, internally focused video environments found in large enterprise, it offers important flexibility for midsize enterprises that are more likely to run video over the public Internet.

Vidyo was one of the first movers to support video calling on iPads and Android devices, and offers individual users the ability to dynamically manage video layouts to suit their preferences. Vidyo has addressed the room-centric conferencing environment in several ways. In addition to providing a gateway to standards-based room appliances, Vidyo introduced VidyoPanorama, a fully modular approach that allows displays of varying form factors to be collected into a multipoint experience, engaging Vidyo endpoints from the far end of a room. While VidyoPanorama has not been a primary deployment model for customers, Vidyo continues to innovate against an emerging set of new display technologies and does not tie their value to a specific form factor.

For the time being, the only way to interconnect a Vidyo endpoint with a non-Vidyo videoconferencing endpoint is through a gateway. This gateway could be purchased by the enterprise or delivered by Vidyo or one of its channel partners. Its licensing model allows regular videoconferencing endpoints to connect "for free" by using a gateway. Its VidyoPortal is the only piece of dedicated hardware needed in a pure Vidyo environment. The VidyoRouter costs approximately the same as a single HD port on a competitive MCU, but can handle 100 simultaneous HD video streams, making the infrastructure cost of deployment much lower than a traditional MCU approach.

While the Vidyo architecture is ideally suited to midsize enterprises, Vidyo is still challenged when it comes to penetrating large enterprises with group video capabilities. Large enterprises tend to have standing investments in endpoints and infrastructures, and are more concerned with integrating video into UC than with a differentiated solution for existing rooms. Vidyo is expected to have new opportunities in this segment in 2013, as it introduces deeper integration with Microsoft Lync 2010. Midsize enterprises remain a growth area for Vidyo, but it will face increasing competition from video-as-a-service providers, as well as cloud providers that facilitate the extension of existing video environments.

Consider Vidyo when your enterprise seeks widespread group and personal video communication that balances reach with quality.

Rating: Positive