Web Conferencing Growing to a $1.1 Billion Market by 2008

By Geoffrey James
Remember office automation (OA)? OA used to be a big-ticket item, back before Microsoft turned it into a commodity. One of the unfulfilled promises of OA, however, was real-time and team-based collaboration technologies, known as groupware. While word processing applications, spreadsheets and email have become commonplace, groupware – the supposed be-all OA application – never caught on.
That’s starting to change though. Groupware that’s similar to what was envisioned back in the 1980s actually is beginning to become popular. According to the market research firm Gartner, the worldwide Web conferencing and team collaboration software market will account for $681.7 million in revenue in 2005, a 16% increase over 2004. That’s quite an accomplishment in a software market that overall has been experiencing sluggish growth since the dot-com crash. Better yet, the market for this latter-day groupware is expected to reach $1.1 billion. Of course that’s small potatoes compared to the many billions of dollars spent on ERP, for example, but because there aren’t any dominant vendors this new software category represents a real sales opportunity.
These new Web conferencing collaboration products support interaction between participants in real time in a meeting or presentation format. They include file, screen and application sharing, chatting and electronic white boarding. Typically, these team-based products provide shared folders and workspaces, threaded discussions and document-based collaboration. In short, participants can use the network to accomplish work that previously needed to be accomplished during face-to-face meetings.
One reason groupware suddenly has become popular is that it’s based on the Internet, which provides consistency between the different elements and a single platform for application development. “Vendors are providing more integrated collaboration functionality spanning a variety of content, communication and collaboration technologies,” says Gartner vice president Tom Eid. “Overall adoption will continue to increase as these technologies become more integrated with business processes.”
Eid believes that other forms of collaboration, such as instant messaging (IM) and videoconferencing, also will see increasing demand and, through the use of international standards, will interoperate with other communication technologies. Videoconferencing, for example, may evolve to the desktop to support ad hoc conversations and become better integrated with Web conferencing and IM – and all of these tools may be bundled into portals. Translation: Lots of companies will be upgrading their software to support the new functionality.
Most of the market growth will take place in North America and Europe, which is where this type of software is being used today. The reason for the early adoption in these regions is that executives in North America and Europe are more comfortable using collaboration tools as substitutes for face-to-face meetings. That’s not true everywhere, though. In Asia/Pacific and Japan, for example, face-to-face meetings are preferred and business travel for meetings is seen as a privilege rather than a necessary evil.