2011 Collaboration Trends in South KoreaWhat Lies Ahead?

Focus Points

Agenda

• Top Trends in Collaboration

• Market Outlook in South Korea & Asia Pacific

• Conclusion & Key Take Aways

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Top Trends in Collaboration

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Video, Cloud Services & Social Media are the three big trends in the UCC market today

• Across the Enterprise

• SaaS adoption booms

• Engaging Gen Y• Enterprise Social

“Successful enterprises of the future will increasingly deploy video, cloud services, and social applications as part of their

business processes”

“Successful enterprises of the future will increasingly deploy video, cloud services, and social applications as part of their

business processes”

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Enterprise• B2B Video Conferencing

• Consumer/ B2C Video

Video

booms• Collaboration platforms emerge

• CaaS, CRM

Cloud

• Enterprise Social Media

• Marketing & Customer Service

Social

Collaboration Applications expected to lead in growth during forecast period in APAC

CAGR (2010 – 2016)CAGR (2010 – 2016)

13.5%

16.1%

10.9%

IM & Presence

Mobility

Unified Messaging

$6.86 Bn

$4.10 Bn

$3.82 Bn

APAC On-Premise Applications Market Opportunity

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2009 2010 2016

Traditional Telephony IP Telephony

Email Contact Centers

Conferencing & Collaboration IM/Presence

Mobility Unified Messaging

-1.8%

9.5%

8.1%

8.9%

13.7%

Traditional Telephony

IP Telephony

Email

Contact Centers

Audio, Video & Web

Source: Frost & Sullivan

The case for S.Korea is similar

CAGR (2010 – 2016)CAGR (2010 – 2016)

16.3%

14.8%

6.8%

IM & Presence

Mobility

Unified Messaging

$318.5M

$301.1M$287.5M

S.Korea On-Premise Applications Market Opportunity

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2009 2010 2016

Traditional TelephonyIP TelephonyEmailUnified MessagingIM/PresenceConferencing & Collaboration

-2.7%

7.9%

5.8%

12.0%

12.1%

Traditional Telephony

IP Telephony

Email

Contact Centers

Audio, Video & Web

Source: Frost & Sullivan

Convergence of Industries as Collaboration Evolves

Software vendors

Video Solutions Providers Infrastructure vendors

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Conferencing Services Providers

Video Solutions Providers Infrastructure vendors

Network operators

Source: Frost & Sullivan

Others

UC &Collaboration

Paradigm Shift in User Experience

VC Desktop

VC Desktop

VC RoomSystemsVC RoomSystems

Immersive Telepresence

Immersive Telepresence

Incre

asin

g q

uali

ty a

nd

featu

res

Incre

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featu

res

Blurring of boundaries between product segments as technology improves and prices fall

Quality of the M

eeting Experience

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Video Software

Video Software

Source: Frost & Sullivan

Video–phonesVideo–phones

Desktop SystemsDesktop Systems

Falling average pricesFalling average prices Incre

asin

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uali

ty a

nd

featu

res

Incre

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uali

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nd

featu

res

Relative Cost of Solution

Quality of the M

eeting Experience

$100$100 $100,000$100,000$10,000$10,000$1000$1000

The Five ‘Ages’ of Visual Communications

1st Age - $30K proprietary codecs, using expensive private T1/E1 circuits (e.g. ‘BT Megastream’ ) between locations

2nd Age - H.320 standard emerges and flexibility from use of switched digital networks, such as ISDN

3rd Age - Introduction of graphic user interface and ease of use, putting control in the hands of the user

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4th Age - Use H.323 standard and IP to connect endpoints over the public Internet and development of software-based clients for use with PCs

5th Age - Introduction of high-definition video and 22 kHz audio established at top end, and the subsequent fall in prices … and take-off of consumer services

Video solutions are in a state of transition; segments are increasingly less defined

PersonalPersonalMobileMobile ExecutiveExecutive

GroupGroupImmersiveImmersive

ApplicationApplication

Interoperability Required Across Endpoint PortfolioInteroperability Required Across Endpoint Portfolio

Users’ Scope and Flexibility Needs ExtendedUsers’ Scope and Flexibility Needs Extended

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Source: Frost & Sullivan

PC-basedVideo & WebConferencing

PC-basedVideo & WebConferencing

Video-phonesVideo-phones

DesktopAppliancesDesktop

AppliancesRoom

SystemsRoom

SystemsCustomSolutionsCustomSolutions

Blurring of Product Segment Boundaries, especially in the low-end

and between Room-Based VC & Telepresence

Blurring of Product Segment Boundaries, especially in the low-end

and between Room-Based VC & Telepresence

Roadblocks to Greater Video Adoption in Korea

• Limited opportunity due to high endpoint prices, but situation is improving

• Operational costs worry enterprises

• Limited opportunity due to high endpoint prices, but situation is improving

• Operational costs worry enterprises

Cost

• Company infrastructure was not designed for Video

• Company infrastructure was not designed for Video

Infrastructure

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designed for Video• Greater preference in face to face meeting

designed for Video• Greater preference in face to face meeting

Infrastructure

• Confusion on how to integrate video with existing communication solns.

• Perception of an expensive technology

• Confusion on how to integrate video with existing communication solns.

• Perception of an expensive technology

Integration & Awareness

Mid-Range Video Solutions are the Largest Market Segment Today

Telepresence

Executive Desktops

Software Solutions

•The mid and entry level sectors are showing higher enterprise demand, •solutions such as Lifesize Express 200 are increasing in popularity

•The mid and entry level sectors are showing higher enterprise demand, •solutions such as Lifesize Express 200 are increasing in popularity

•Immersive Telepresence prices have dropped drastically from $300k MSRP to street pricing of less than $150k for a typical

•Immersive Telepresence prices have dropped drastically from $300k MSRP to street pricing of less than $150k for a typical

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Telepresence

Room Based VC

street pricing of less than $150k for a typical 3-screen solutionstreet pricing of less than $150k for a typical 3-screen solution

•Desktop video as standalone or integrated with web has reached mainstream; •Japan & Korea continue to be leading adopters

•Desktop video as standalone or integrated with web has reached mainstream; •Japan & Korea continue to be leading adopters

2010 South KoreanVisual Communications Markets

Revenue: $16.1 MillionSource: Frost & Sullivan

South Korean Video Market Opportunity

$14.7Mn$16.1 Mn

$39.1Mn

S.Korean Visual Communications Market Outlook

CAGR (2009-2016): 15.0%

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•Government & Corporate are key market drivers •SMB growing in contribution due to availability of suitable solutions

•Government & Corporate are key market drivers •SMB growing in contribution due to availability of suitable solutions

•The Immersive Telepresence market is seeing increasing activity• HD Adoption is driving growth

•The Immersive Telepresence market is seeing increasing activity• HD Adoption is driving growth

2009 2010 2016Source: Frost & Sullivan

APAC Collaboration in the Cloud continues its high growth: Audio, Video and Web SaaS Conferencing

Market

Market Size:

$549 Mn

Market Size:

$1.12 Bn

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Market Size:

$256 Mn

•Market size doubled in the last 5 years, expected to double again in 5 years

•Audio growth is the lowest at a CAGR of 9%, whereas web is expected to grow at CAGR of 23.4%

•Market size doubled in the last 5 years, expected to double again in 5 years

•Audio growth is the lowest at a CAGR of 9%, whereas web is expected to grow at CAGR of 23.4%

Source: Frost & Sullivan

Audio

Video

Web

Web

2010

SaaS Collaboration Booms

5%

10%

15%

20%

25%

30%

CA

GR

(2010-2

016)

Video

Audio

Web

15

Audio

Video20160%

0% 10% 20% 30% 40%

2010 Growth Rate %

•Web market share expected to increase from 17.9% to 34.5% by 2016

•Audio Conferencing expected to slow as market saturates

•Web market share expected to increase from 17.9% to 34.5% by 2016

•Audio Conferencing expected to slow as market saturates

•Web Collaboration has the highest market growth potential, at approx. 25% CAGR

•Video Bridging expected to be slowest growing segment

•Audio Conf. to focus on smaller markets

•Web Collaboration has the highest market growth potential, at approx. 25% CAGR

•Video Bridging expected to be slowest growing segment

•Audio Conf. to focus on smaller markets

Source: Frost & SullivanSource: Frost & Sullivan

SaaS Collaboration in 2010 by Sub-Region

•Japan is the largest and web collaboration services market, China the smallest

•Japan is the largest and web collaboration services market, China the smallest

•Chinese market is heavily dominated by •Chinese market is heavily dominated by

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2010 Asia Pacific SaaS Collaboration Markets

Revenue: $549 Million

Source: Frost & Sullivan

heavily dominated by local on-premise vendors

heavily dominated by local on-premise vendors

•ANZ market is most mature, with ASEAN usage mostly from Singapore

•ANZ market is most mature, with ASEAN usage mostly from Singapore

Social Networks: A Big Opportunity in the Making?

Cloud ServicesCloud

Services

Big Opportunity

Big Opportunity

•Web Collaboration

•Video Conferencing

Synchronous

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Social AppsSocial Apps

Opportunity?

Opportunity?

Source: Frost & Sullivan

•Project Management & Team Collaboration

•Social Applications (Wikis, Blogs, Communities etc.)

•Content Management solutions

Asynchronous

Social Applications for Business Still in its Infancy in Asia Pacific

$97.7

2010 Asia Pacific (ex.Japan) Enterprise Social Applications: $15.9 Million

•The Asia Pacific Market is in its infancy

•Australia is the leading adopter of social media for business

•Sales, Marketing & Customer Support are leading applications

•Team Collaboration/ Project Mgmt. solutions on

•The Asia Pacific Market is in its infancy

•Australia is the leading adopter of social media for business

•Sales, Marketing & Customer Support are leading applications

•Team Collaboration/ Project Mgmt. solutions on

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$8.5

$15.9

2009 2010 2014

•Team Collaboration/ Project Mgmt. solutions on the rise

•2 types of competitors: pure-play SaaS, ECM providers

•Team Collaboration/ Project Mgmt. solutions on the rise

•2 types of competitors: pure-play SaaS, ECM providers

Challenges with Social Media for Business Use

• How does an organization measure benefits (tangible & intangible)?

• How does an organization measure benefits (tangible & intangible)?

Return on Investment

• “Can a facebook-esque application really be useful for my company?”

• “Can a facebook-esque application really be useful for my company?”Perceived Loss

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really be useful for my company?”• “I’m afraid employees will be wasting time instead of working”

really be useful for my company?”• “I’m afraid employees will be wasting time instead of working”

Perceived Loss of Productivity

• Data access and security policies• Employees empowered to create • Informal culture and litigation

• Data access and security policies• Employees empowered to create • Informal culture and litigation

Decentralization & Control Issues

Conclusion & Key Take Aways

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Predictions for 2011 in South Korea

• Video growth expected to increase from 7-10% in 2009/2010 to 10-15% in 2011

• Immersive telepresence Adoption expected to increase

• Social Media Applications growth expected to remain high in select segments such as customer contact, however enterprise growth is a challenge

• Hosted applications such as hosted email continue to increase adoption in the small to mid market, however some organizations still want on-premise

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• Greater focus on mobility integrated into various UC Applications

• SaaS Collaboration (audio, video, web) to grow overall at 15-20%

• Verticals such as education are expected to see increased growth, especially in distance learning

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For Additional Information

Donna Jeremiah

Corporate Communications

Asia Pacific

+603 6204 5832

djeremiah@frost.com

Mi Ok Lee

Corporate Communications

Asia Pacific - Korea

+82 2 6710 2033

Miok.lee@frost.com

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Nitin Bhat

Partner

Asia Pacific

ICT

+65 6890 0999

nbhat@frost.com