This market to record 17.2% in revenues between 2010 and 2015
The Web conferencing hosted services market is expected to double in the next five years and reach $2.85bn by 2015, according to a report by market research firm Frost & Sullivan.
The report revealed that World Web Conferencing hosted services market reached $1.09bn in 2009 in revenues, growing at the rate of 10.5% over 2008 and is expected to reach $2.85bn in 2015, with a projected revenue growth rate of 17.2%.
The research firm said that the rising use of Web 2.0 tools and interest in cloud-based communications has fuelled growth of Web conferencing hosted services.
Moreover, as users look to accelerate team productivity and support a business model that fuels innovation with better and faster decision making, applications such as Web conferencing are becoming a critical component of enterprise communications.
Frost & Sullivan principal analyst Roopam Jain said the dominant theme in 2010 among Web conferencing vendors was focused on creating easier to use offerings at attractive price points to move the market beyond a niche status.
"The overall outlook for web conferencing hosted services is robust; IT is making web conferencing services an investment priority as part of a bigger bundle of collaborative applications for mainstream communications," Jain said.
The Web conferencing service market along with new cloud services combines hosted e-mail, groupware, and messaging with collaboration.
The research firm said that these collaboration bundles are likely to overshadow stand-alone sales of Web conferencing, as users try to optimise value by purchasing an end-to-end communications suite from a single vendor.
However, the slow economy and impact of declining price had resulted in lower-than-expected revenue growth for the web conferencing hosted services market in 2009.
In addition, pricing pressures continue to intensify, especially as vendors offer collaboration products at competitive prices, setting the stage for price-based competition.