frost & sullivan web event services market

www.frost.com

World Web Event Services Markets

N100-64

#N100-64 © 2006 Frost & Sullivan www.frost.com

Frost & Sullivan takes no responsibility for any incorrect

information supplied to us by manufacturers or users.

Quantitative market information is based primarily on

interviews and therefore is subject to fluctuation.

Frost & Sullivan reports are limited publications con-

taining valuable market information provided to a select

group of customers in response to orders. Our customers

acknowledge when ordering that Frost & Sullivan reports

are for our customers’ internal use and not for general

publication or disclosure to third parties.

No part of this report may be given, lent, resold, or

disclosed to non-customers without written permission.

Furthermore, no part may be reproduced, stored in a

retrieval system, or transmitted in any form or by any

means, electronic, mechanical, photocopying, recording,

or otherwise, without the permission of the publisher.

For information regarding permission, write:

Frost & Sullivan

2400 Geng Road, Suite 201

Palo Alto, CA 94303-3331

United States

Table of Contents

C h a p t e r 1


Introduction 1-1

Market Overview 1-1

Introduction 1-2

Research Scope and Methodology 1-2

Research Methodology 1-3

Market Scope 1-3

Market Definitions 1-3

Pre-event features 1-4During-event features 1-4Post-event features 1-4

Market Forecasts 1-5

Market Engineering Measurements 1-5

Market Challenges 1-7

Market Drivers and Restraints 1-7

Revenue Forecasts 1-9

Forecast highlights 1-12

Pricing Analysis 1-13

Market Trends and End User Analysis 1-15

Key Market Trends 1-15

Value-added services on the rise 1-15

Standard web event management services 1-16Additional web event support services 1-16

Audio streaming versus Audio conferencing 1-17

Growing Opportunities at the SMB Market 1-18

#N100-64 © 2006 Frost & Sullivan www.frost.com iii

Vertical Markets Analysis 1-19

Key Enterprise Applications 1-20

Competitive Landscape 1-22

Competitive Structure 1-22

Competitive Analysis and Market Shares 1-24

#N100-64 © 2006 Frost & Sullivan www.frost.com iv

#N100-64 © 2006 Frost & Sullivan www.frost.com v

List of Figures

C h a p t e r 1


1-1 Web Event Services Market:

Top Market Challenges (World), 2007-2013 1-7


Market Drivers Ranked in Order of Impact (World), 2007-2012 1-8


Market Restraints Ranked in Order of Impact (World), 2007-2012 1-9


Revenue Forecasts (World), 2004-2012 1-10

1-5 Web Conferencing Services Market:

Revenue Forecasts for Technology Service Providers (World), 2004-2012 1-11


Average Prices Weighted by Market Share (World), 2006 1-14


Competitive Structure (World), 2006 1-23


Company Market Share by Revenues (World), 2006 1-24

#N100-64 © 2006 Frost & Sullivan www.frost.com vi

List of Charts

C h a p t e r 1


1.1 Web Event Services Market:

Market Engineering Measurements (World), 2006 1-6


Revenue Forecasts (World), 2004-2012 1-10

1.3 Web Conferencing Services Market:

Revenue Forecasts for Technology Service Providers (World), 2004-2012 1-12


Percent of Revenues by Vertical Market (World), 2006 1-19


Percent of Revenues by Enterprise Applications (World), 2006 1-21


Company Market Share by Revenues (World), 2006 1-25

1World Web Event Services Markets

I n t r o d u c t i o n

Market Overview

Like other conferencing and collaboration markets, the web event services industry is

undergoing an important transformation, gaining momentum as the technology continues to

improve. In 2006, total revenues in the web event services market reached $140.5 million,

forecasting $500.5 million for 2012. As more customers are ready to invest in this type of

solutions, the web event services market is expected to show impressive growth rates through

out the forecast period. The compound annual growth rate (2006 to 2012) is estimated at a

robust 23.6 percent.

Not surprisingly, growing levels of internal and external corporate communications on top of

shrinking travel budgets are driving the enterprise need for web event solutions. By

reinforcing the value of real-time conferencing and collaboration, web event conferencing is

becoming a key enabler of business performance and best practices. Additionally, new and

changing go-to-market models are promoting web event solutions as an effective way to

improve the delivery of highly targeted messages to large and geographically dispersed

audiences. Ongoing sales and marketing efforts are expected to strengthen awareness of the

real effectiveness of web event solutions

As this strategic analysis identifies, there are several growth opportunities in the under-served

Small and Medium-sized Business (SMB) market as well as in a large number of vertical

markets and enterprise horizontal applications. Enhanced user friendliness, functionality and

integration are likely to become key elements for widespread market adoption. Further

investments in technology are also expected to increase demand for web event solutions in

this typically brand driven market.

#N100-64 © 2006 Frost & Sullivan www.frost.com 1-1

Without doubt, web event service providers face numerous challenges to keep business

margins at a high level. Considering that commoditization is gradually consolidating, a

growing number of vendors are determined to offer high touch value-added services as a way

to gain mind and market share participation. Frost & Sullivan anticipates that the rivalry

among market participants is expected to increase as the level of service present in the web

event solutions is likely to become the primary competitive differentiators over the next one

to two years.

To sum up, the web event services market shows clear signs of robust growth opportunities.

As the value proposition for web event solutions becomes evident, Frost & Sullivan foresees

that the demand for this type of solutions is expected to remain strong, expecting new

product features and service developments in the short as well as the long run.

Introduction

This study offers an in-depth insight of the most important characteristics and future trends

of the web event services market. The analysis of the main dynamics of the market allows

Frost & Sullivan to identify the main market challenges, drivers and restraints as well as the

current pricing and competitive structures within the web event services market. This

research offers a comprehensive third-party analysis on growth opportunities, paying special

attention to key market trends.

This analysis provides detailed revenue forecasts based on a variety of sources, including

interviews with original web event services providers as well as resellers and on-premise web

event software vendors. By analyzing the different market strategies of service providers,

Frost & Sullivan aims at offering a valuable assessment for vendors that want to increase

their participation in this fast growing market. As there are currently more than 150

companies in the web event services market, this study primarily focuses on those companies

that develop and sell, directly or through resellers, web event technologies as a hosted

solution. The non-inclusion of certain service providers does not reflect in any way the

position of Frost & Sullivan.

Research Scope and Methodology

Geographical Region Covered: World

Base Year: 2006

Forecast Period: 2007-2012


R e s e a r c h M e t h o d o l o g y

■ Primary research with Original Web Event Service Providers or Technology Service

Providers (TSPs), Reseller Service Providers, and On-Premise Web Event Software

Vendors

■ Frost & Sullivan published reports

■ Decision Support Databases

■ Company websites and other secondary resources

M a r k e t S c o p e

■ The scope of this research includes service providers that offer interactive real-time web

event solutions either as a stand-alone technology or as part of a suite of products and

services.

■ All revenues and revenue forecasts given in this research are at the Original Web Event

Service Provider level, including only those solutions that are offered as a hosted service

(either managed by the vendor or self-run by the end user).

■ The web event services market under analysis is a constituent part of the web

conferencing services market. A web event is in effect a web conference with more than

25 participants.

M a r k e t D e f i n i t i o n s

For the purpose of this study, Frost & Sullivan defines a web event as a set of technologies

and services that enables the delivery of content over the Internet to many simultaneous

listeners/viewers in real-time. This means that a web event is an interactive one-to-many

solution for large-scale synchronized collaboration. All web events are live in the sense that

the information is shared according to a pre-planned agenda, with starting and ending time.

The audio portion of the event can either be done through traditional PSTN networks or

through VoIP.


The main features within the web event services market can be classified into the following

areas:

Pre-event features

■ Scheduling and content management (setting up)

■ Customized branding

■ Customized invitation, registration and reminder

■ Calendar integration

During-event features

■ Slide presentation

■ Desktop sharing (screen sharing)

■ Application sharing

■ Web co-browsing

■ File transfer

■ Internet audio and video streaming (media broadcasting)

■ White boarding and annotation

■ Chat (text messaging)

■ Polls and surveys

■ Recording

Post-event features

■ Thank you and follow up e-mails

■ Reporting

■ Playback

Following a Software as a Service (SaaS) approach, most web event solutions are sold as a

remotely hosted service that can either be managed by the service provider or self-run by the

end user. Consequently, the present study does not include the analysis of on-promise web

event software solutions that are sold as a licensed product for in-house hosting and

management.


At present, there are two types of web events: collaborative and webcast-style. This study

does not cover the type of web events that only utilize webcasting technologies for the

distribution of content. The term webcasting is commonly reserved for referring to non-

interactive linear media streaming, not bearing much relationship to the concept of web

events as an interactive solution for online collaboration. However, it is important to

emphasize that this study includes the analysis of audio and video streaming as constituent

parts of any large-scale web event, not being entirely subscribe to them as interaction can

take place through the use of text chat or voice communication.

Revenue figures within this research do not include revenues received from audio

conferencing services. However, revenues received from usage of audio and video streaming

as part of the event are included. Additionally, revenues and pricing information within this

study are the result of direct sales as well as reseller sales and Original Equipment

Manufacturers (OEMs) agreements.

M a r k e t F o r e c a s t s

Market Engineering Measurements

Chart 1.1 shows the key Market Engineering measurements for the World web event services

market in 2006.


C h a r t 1 . 1

Web Event Services Market: Market Engineering Measurements (World), 2006

Market Engineering Drives Market

Strategy and Planning

MarketEngineer

ChallengeIdentification

MarketResearch

MarketEngineering

System

Implementation

MarketPlanning

MarketStrategy

Note: All figures are rounded. Source: Frost & Sullivan

Measurement Name Measurement Trend

Market age Growth Phase ---

Base year revenues (2006) $140.5 million Increasing

Potential revenues (2012) $500.5 million Increasing

Base year market growth rate (2006) 40.8% Decreasing

Compound Annual Growth Rare (2006-2013) 23.6% Decreasing

Percentage of base year revenues (2006) by:

• Direct sales to end users

• Reseller sales91.0%

9.0%

Decreasing

Increasing

Average sales cycle 2-3 months Stable

Average price-per-minute per participant weighted by market share $0.35 Decreasing

Average list price-per-event (75 participants, 60 minutes) weighted by

market share

$1,563.54 Decreasing

Price sensitivity (on a scale of 1 to 10; 1:very low, 10: very high) 6 Stable

Average number of participants per event 71 Increasing

Average length per event 65 minutes Stable

Competitors (active market competitors in base year) Over 150 Increasing

Degree of competition (on a scale of 1 to 10; 1:very low, 10: very high) 7 Increasing

Customer satisfaction (on a scale of 1 to 10; 1:very low, 10: very high) 7 Increasing

Customer loyalty (on a scale of 1 to 10; 1:very low, 10: very high) 6 Stable

Market concentration (percent of base year market controlled by top three

competitors)

74.0% Stable


Market Challenges

Figure 1-1 shows the top industry challenges faced by web event service providers in 2006.

Source: Frost & Sullivan

Market Drivers and Restraints

Figure 1-2 shows the primary market drivers in the World web event services market in 2006.

F i g u r e 1 - 1

Web Event Services Market: Top Market Challenges (World), 2007-2013

Challenge

Current changes in go-to-market models promote web event solutions as an effective customer-centric way to

improve the delivery of highly targeted messages to large-scale audiences

Offering high touch value-added web event services represents a key competitive differentiator that helps

vendors to increase mind and market share rates

As awareness levels remain low, many web event service providers need to further strength their marketing and

sales efforts

The price disparity and complexity that commonly surrounds most web event solutions forces vendors to

simplify the existing pricing and licensing options

Depending on the IT infrastructure capacity of the end-user, the development of on-premise software

deployment offerings challenges the concept of web events as a purely hosted solution

The expansion of the resellers’ participation in the web event management services segment absorbs demand

from original web event service providers

The growing number of new market participants with strong financial backing and consolidated brand images

in the enterprise software market pose a threat to small and medium-sized players as well as to traditional web

event service providers



Figure 1-3 shows the primary market restraints in the World web event services market in

2006.

F i g u r e 1 - 2

Web Event Services Market: Market Drivers Ranked in Order of Impact (World), 2007-2012

Rank Driver 1-2 Years 3-4 Years 5-6 Years

1 As a key enabler of business performance, web events have

gradually become an accepted alternative or complement of

traditional face-to-face large-scale meetings

High High High

2 Web event conferencing reinforce the value of real-time

collaboration by expanding the reach of organizations with

geographically dispersed prospects, customers, partners

and employees

High High High

3 Distinctive attributes such as customer education, lead

generation and the subsequent compression of the sales

cycle increase demand for web event solutions

High High High

4 An increasing number of web event applications with

enhanced easy of use and seamless integration are key in

fueling adoption

High High Medium

5 Increased business process outsourcing (BPO) expands

revenue potential for vendors that offer web event

management and support services

Medium Medium Medium

6 Ongoing efforts to enhance the functionality of audience

engagement tools facilitate large-scale collaboration,

creating better attendance levels

Medium Medium Medium

7 External factors such as air travel disruptions, high travel

costs and terror threats are driving demand for

conferencing and collaboration technologies

Medium Medium Low

8 Growing levels of internal corporate communications and

training drive revenue streams

Medium High High

9 "Do-it-yourself" web event solutions encourage greater

usage levels in the SMB segment, boosting the potential size

of the market

Low Medium High



Revenue Forecasts

Figure 1-4 and Chart 1.2 show the revenues and revenue growth rates for the World web

event services market.

F i g u r e 1 - 3

Web Event Services Market: Market Restraints Ranked in Order of Impact (World),

2007-2012

Rank Restraint 1-2 Years 3-4 Years 5-6 Years

1 Web event conferencing as a secondary offering restricts

vendors from maximizing revenue potential

High High Medium

2 The growing number of web event offerings with wide

price disparity creates confusion in the minds of

customers

High Medium Medium

3 The misconception that web events solutions are just

oriented to satisfied the needs of large enterprises limits

adoption in the SMBs segment

High Medium Low

4 Mixed reviews about latency and low quality sometimes

related to streaming audio, video and VoIP constraint

usage levels

Medium Medium Low

5 Security concerns regarding the use of web event

conferencing as a way to deliver classified/confidential

content increase skepticism among end users

Medium Low Low

6 Uncertainty about the real effectiveness and ease of use

of web event solutions as way to address large-scale

audiences restrains adoption

Medium Low Low


Note: All figures are rounded; the base year is 2006. Source: Frost & Sullivan

C h a r t 1 . 2

Web Event Services Market: Revenue Forecasts (World), 2004-2012


F i g u r e 1 - 4

Web Event Services Market: Revenue Forecasts (World), 2004-2012

Revenue

Revenues Growth Rate

Year ($ Million) (%)

2004 66.1 ---

2005 99.7 50.8

2006 140.5 40.8

2007 188.4 34.1

2008 243.7 29.4

2009 305.4 25.3

2010 371.1 21.5

2011 437.1 17.8

2012 500.5 14.5

Compound Annual Growth Rate (2006-2012): 23.6%

0

100

200

300

400

500

600

2004 2005 2006 2007 2008 2009 2010 2011 2012

Rev

enue

s ($

Mill

ion)

0

10

20

30

40

50

60

Gro

wth

Rat

e (%

)

Revenues ($ Million) Growth Rate (%)


Figure 1-5 and Chart 1.3 show the percentage contribution of web event service revenues

within the web conferencing service revenues for TSPs. In effect, the web event services

industry encompasses only a small fraction of the web conferencing services market.

However, as awareness of the benefits of holding events over the Internet grows, the web

event revenue contribution is expected to increase substantially through out the forecast

period. Frost & Sullivan forecasts that by 2012 the web event services market will represent

almost 29 percent of the total web conferencing services market for TSPs.


F i g u r e 1 - 5

Web Conferencing Services Market: Revenue Forecasts for Technology Service Providers

(World), 2004-2012

Web Conferencing Services Percentage of Web

Year Revenues by TSPs Event Services

($ Million) (%)

2004 383.8 17.2

2005 491.0 20.3

2006 620.6 22.6

2007 771.4 24.4

2008 939.5 25.9

2009 1,119.0 27.3

2010 1,305.9 28.4

2011 1,513.5 28.9

2012 1,743.6 28.7

Compound Annual Growth Rate (2006-2012): 18.8%


C h a r t 1 . 3

Web Conferencing Services Market: Revenue Forecasts for Technology Service Providers

(World), 2004-2012


In 2006, total revenues in the web event services market reached $140.5 million with a

40.8 percent growth rate over the previous year. The compound annual growth rate (2006 to

2012) for this market is estimated at a 23.6 percent. Throughout the forecast period, the web

event services market is likely to show robust growth rates as more customers are ready to

invest in this type of solutions. Frost & Sullivan forecasts that in 2012 the web event services

market will worth $500.5 million.

F o r e c a s t h i g h l i g h t s

■ The revenue forecasts were derived from web event services market drivers and restraints

as well as from conversations with industry participants. The base year revenues are

established based on information received from all major web event service providers in

this market. Additionally, the historical revenues for 2004 and 2005 have been adjusted

to reflect additional information.

■ Far from the hyper growth rates seen in the early years, the web event services market is

likely to grow at a gradual pace through out the forecast period.

■ As competition and commoditization are expected to increase, price erosion is likely to

emerge to a certain extent. Important levels of price insensitiveness at the market for high

impact-style web events is expected to offset this trend as service providers with key

market participation keep prices high and steady.

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2004 2005 2006 2007 2008 2009 2010 2011 2012

Rev

enue

s ($

Mill

ion)

Web event services for large-scale audiences Web conferencing services for small meetings


■ Within a large-scale collaboration context, environmental factors such as the growing

levels of internal corporate communications and training as well as customer education

are driving more users toward the event side of the web conferencing services market.

■ Revenues growth rates in the web event services market have a high correlation with

usage levels. As awareness of the real effectiveness and ease of use of web event solutions

is expected to increases rapidly from 2007 onward, web event attendance rates are also

likely to multiply, maximizing at the same time revenue potential. In addition, ongoing

sales and marketing efforts are expected to strengthen this trend.

■ A greater momentum in SMBs adoption is expected to accelerate growth rates from

2009 onward, widening considerably the potential size of the market. Similarly, vertical

markets adoption is likely to increase in several sectors such as pharmaceutical/

healthcare and professional services, among others.

■ Improvements in the quality of streaming audio, video and VoIP are expected to bring

web event conferencing into the realm of mainstream adoption as a cost-effective way to

deliver rich multimedia content over the Internet. In effect, the sustained strengthening of

IP networks is anticipated to drive audio and video streaming usage levels with the web

event services market over the next two to three years.

Pricing Analysis

As the web event market remains young in the growth curve, most customers do not fully

understand the different pricing options available at the moment. At first sight, it could be

argued that the price structure and its far from trivial complexity create confusion in the

minds of customers. For this reason, and bearing in mind that customer needs and

preferences differ significantly from one case to the other, many web event service providers

have decided to implement more flexible, comprehensive and customizable pricing and

licensing structures. Frost & Sullivan expects this trend to continue during the forecast

period.

Depending on usage levels, the main web event pricing and licensing models are:

■ Name user: This option provides unlimited usage per name user (host) up to a limited

number of participants per event. This pricing model is targeted at high frequency users

and some service providers charge an additional annual licensing fee for the named

license.

■ Per-event: Similar to the room licensing model, the per-event pricing option enables users

to acquire any number of rooms at a fixed price for a limited amount of participants.

This model is targeted at customers that have moderate usage levels and want to define

beforehand the final cost of the event.


■ Per-minute: This pay-as-you-go pricing model is based on actual usage per participant.

This option is ideal for occasional users that do not want to have a long-term

commitment with the service provider. The per-minute pricing model is generally

available as a post-pay service.

With growing intensity, the possibility to predict the turnout rate is now a constant concern

among web event users. In fact, determining the event’s probable attendance rate is a great

challenge since there is no method that projects attendee numbers with 100% accuracy. For

this reason, as web event users feel more confident when they estimate in advanced the final

cost of the event, the per-event pricing model is gaining further acceptance. Frost & Sullivan

anticipates that this pricing model is likely to become dominant due to its predictable way to

keep costs under control while reducing complexity.

Figure 1-6 represents average web event prices weighted by market share. While during

2006 the advertised price-per-minute range from $0.45 to $0.10, the average

price-per-minute weighted by market share remained comparatively high and steady at

$0.34 per participant. The main reason behind this phenomenon is associated with the fact

that the top three service providers control a great part of the web event services market,

keeping prices per minute at a high level. Competitive factors such as brand-image

recognition, global presence and high touch customer services, among others, are allowing

companies with important market share participation to define higher prices per minute in

comparison with companies that hold minor market share percentages.


From a per-event pricing perspective, the situation is different for various reasons. For the

past few years, most web event service providers have offered important discounts based on

usage volume. Additionally, as commoditization and attendance levels have increased

significantly since 2003, the average base price per-event has declined 47 percent. However, it

is necessary to point out that important value-added product features and services such as

audio and video streaming, e-commerce and event management and support, among others,

are offered at additional cost, consequently increasing the final price per-event.

F i g u r e 1 - 6

Web Event Services Market: Average Prices Weighted by Market Share (World), 2006

Event Service Average Weighted Price ($)

Per Minute per Participant 0.35

Per Event (75 participants/60 minutes) 1,563.54


In the case that an organization needs to hold web events for internal corporate

communications or training, the demand for add-on product features and services is

generally low. For the most part, decision-makers at this level are budget conscious, clinging

for that reason to the base price per-event. Frost & Sullivan foresees that the market for

simpler-style web events is expected to witness radical changes in consumption patterns as a

result of price variations.

However, in the case that an organization needs to hold high impact events for external

communications (product launches, public announcements, etc.), decision-makers are likely

to reduce in importance the cost of the event. The reason behind this lies in the fact that it

becomes a top priority to enjoy a flawless event execution with no complications that might

end up damaging the company’s reputation. Frost & Sullivan anticipates that the market for

high impact-style web events is expected to continue showing clear signs of price

insensitiveness through out the forecast period.

M a r k e t T r e n d s a n d E n d U s e r A n a l y s i s

Key Market Trends

V a l u e - a d d e d s e r v i c e s o n t h e r i s e

Current trends show that comfort levels among web event users are rising in a way that the

traditional ease-of-use barriers are being overcome. This could naturally mean that the use of

self-managed solutions is increasing, especially if they represent a low-cost alternative for

budget conscious customers. However, it is important to emphasize that the web event

market is also witnessing large demand for value-added services and product features that

enrich the whole event experience.

Frost & Sullivan observes a growing demand for Business Process Outsourcing (BPO)

services in the web event market. The willingness to delegate certain critical enterprise

process to external service providers depends necessarily on the nature of the event, as well

as on the size and status of the organization. Additionally, the fact that many organizations

do not want to take unnecessary risks that may end up damaging their reputation confirms

this trend.

Considering that the web event market is predominantly following a SaaS (Software as a

Service) model, the expansion of web event management and support services represents an

important additional revenue stream for service providers. Moreover, as commoditization

becomes evident, the base price-per-event solutions is likely to decrease, forcing vendors to

focus more on providing new on-demand value-added product features and services.

Frost & Sullivan anticipates that the level of service present in the web event solutions is

expected to become the primary competitive differentiators in the next one to two years.


Depending on the end user needs, most service providers offer the following web event

management and support services:

Standard web event management services

■ Event design consultation: Best practices

■ Custom branded registration page

■ Custom branded e-mail invitations, confirmations, reminders and thank-you messages.

■ Audio options set up

■ Personalized coaching, tips and tricks

■ Dry run and technical rehearsal

■ Live support during the event

■ Attendee information, polling and survey reporting

■ Recording and playback

■ Data integration with enterprise applications such as CRM and ERP, among others.

Additional web event support services

■ Audio conferencing

■ Basic and advanced moderating services

■ Live or pre-recorded audio and video streaming

■ Advanced branding

■ Website integration

■ Password protection

■ E-commerce: Pay-per-view

■ Content management and production

■ Onsite live audio, video or slides capture

■ Video services: Lighting, post-production, editing, mastering, and encoding for online

delivery

■ Closed captioning

■ Event transcripts


■ Recorded event on CD, on-demand web access, FTP upload for client hosting and MP3

output for client Podcasting.

■ Recording management: Editing and hosting

■ Pre-event marketing: Audience acquisition campaigns

■ Post-event marketing: Lead qualification and business Intelligence

■ Custom development

Following a Pay-per-view approach, E-commerce services are gaining popularity as

organizations start charging participants for access to live or pre-recorded online seminars

and its corresponding material. Predominantly, this online payment processing service is

requested for training purposes. In view of the fact that training is becoming a key

horizontal applications, Frost & Sullivan anticipates greater demand for Pay-per-view

capabilities as a way to allow organizations to hold profitable web events.

By themselves or through partners, a large amount of service providers are expected to

continue developing new applications and services, focusing largely on guaranteeing a

flawless web event experience and maximum ROI. Additionally, Frost & Sullivan believes

that the web event market is likely to see more competition in the web event management and

support services segment as a growing number of reseller service providers concentrate on

further enhancing the functionality of the solutions they sell.

A u d i o s t r e a m i n g v e r s u s A u d i o c o n f e r e n c i n g

From a large-scale communications perspective, traditional two-way conferencing could

cause important communication problems if there is no operator-assisted service involved.

For this reason, it is frequent to keep the audience in a listen-only mode for most part of the

event, primarily trying to avoid any kind of disruption. In fact, the audience can interact with

the presenter/s at any time through the use of text chat. Considering these circumstances,

audio streaming emerges as an ideal one-to-many technology for the delivery of audio

content.

By leveraging voice over IP (VoIP), audio streaming offers a cost-effective way to deliver

highly targeted messages for large and globally dispersed audiences. Not surprisingly, current

trends show that the recent uptake in audio streaming has begun absorbing demand from the

audio conferencing services market. Frost & Sullivan expects that the demand for audio

streaming services is likely to continue increasing during the forecast period.


Nevertheless, it is necessary to bear in mind that most web event services providers are likely

to continue offering traditional PSTN audio conferencing capabilities in addition to audio

streaming. The commoditization of audio conferencing services as well as the problems

associated with the quality of VoIP are forcing vendors to promote dual audio offerings.

From an end-user point of view, this also symbolizes the fact that they can choose the audio

option that best suits their needs. Frost & Sullivan anticipates that as a way to offer more

audio option to the audience, a growing number of organizations are likely to provide

integrated VoIP as well as traditional audio conferencing capabilities in their events.

G r o w i n g O p p o r t u n i t i e s a t t h e S M B M a r k e t

As competition in the web event market intensifies, several web event service providers see

the need to expand their business into new market areas as a way to differentiate from the

rest. Historically, the web event market has mainly focused on large enterprises, a trend that

is likely to remain invariable during the forecast period. However, recent advances in go-to-

market models show that the SMBs are becoming an attractive market niche.

Like large enterprises, the SMB market has seen in the use of real-time collaboration tools a

powerful ally for facing the growing communications challenges of today’s business world. In

fact, the expansion of broadband networks has played an important role in this crusade. By

gradually embracing conferencing and collaboration as a way to communicate over the

Internet, SMBs are generating new revenue opportunities in the web event services market.

Frost & Sullivan forecasts that this trend is expected to accelerate growth rates in two to

three years.

Apart from the traditional benefits of performing web events, there are two of additional

benefits that are particularly attractive to SMBs. The first benefit is related to the possibility

to increase brand awareness. Recent advances in web event customization capabilities allow

SMBs to build strong and differentiated brand images by including company logos and

brands in all web event material. The second benefit is associated with fact that web event

conferencing is becoming a key enabler of business performance and best practice. This

means that web event solutions are now offering enhanced productivity along with the sort

of professional look that small and mid-sized organizations need to expand their revenue

opportunities. To a greater extent, the technology that an organization decides to use is

perceived as an extension of the company itself.

In 2006, new go-to-market models promoted the adoption "Do-it-yourself" (DIY) solutions

that seem to be appealing for SMBs, especially if they do not have enough time and resources

to organize fully featured events. With improved ease to use and user friendliness, even the

most inexperienced presenter can plan and set up any type of online event in just a few

minutes. Additionally, the promotion of flat-rate pricing models with unlimited usage offers a

cost-effective way for SMBs to quickly scale their business efforts and global reach while

keeping cost under control. Frost & Sullivan anticipates that the SMBs adoption of web

event solutions is expected to increase gradually through out the forecast period.


Vertical Markets Analysis

Chart 1.4 shows web event services market revenue breakouts by key vertical markets.

C h a r t 1 . 4

Web Event Services Market: Percent of Revenues by Vertical Market (World), 2006


The early adopters of technology are generally the ones that first embrace web conferencing

and collaboration as a way to compress the market timeline. By pushing vendors to develop

advanced product features and services, the high technology sector has traditionally been a

heavy user of web event solutions, driving usage levels since the beginning. However, over the

last five years the high technology revenue contribution to the web event services market has

gradually dropped, giving further space to other sectors that show more dynamism.

Without doubt, the financial sector has been a strong market, keeping its revenue

contribution percentage steady since 2002. Due to the fact that this sector is heavily

regulated, the adoption of new conferencing and collaboration technologies has accelerated

the dissemination and fair disclosure of strategic information, allowing each person to be at

the same page. In other words, greater regulatory pressures are further stimulating

technology spending at the financial sector, forcing web event service providers to create

effective data retention strategies in compliance with current regulations (SEC rules 17a-3

and 17a-4, USA Patriot Act, Sarbanes-Oxley Act and other legislation).

Sharing some common concerns with the financial sector, the pharmaceutical/healthcare

sector has been one of the fastest growing vertical markets during 2006. The growth in

medical marketing, sponsored mainly by pharmaceutical and medical supply companies, is

increasing the demand for web event solutions as a cost-effective way to educate customers

and medical staff on new drugs, procedures, etc. The results of this study show that this

sector is expected to continue offering substantial growth opportunities for vendors in the

web event services market.

Education 9.2%

Government 5.8%

Other 21.4%

High Technology 27.0%

Financial 20.4%

Pharmaceutical/Healthcare

16.2%


As the popularity of online training spreads out, the education sector has also shown a strong

expansion during 2006. In fact, the recent enhancements over interactive capabilities have

allowed the creation of "virtual classrooms" for synchronous distant learning. Considering

that real-time interaction is one of the most valuable elements in any teaching and learning

process, Frost & Sullivan foresees that the education vertical market is expected to

strengthen its revenue contribution during the forecast period.

With regard to government, the need for an integrated and secure communications

infrastructure is driving the technology spending. In the United States, the Department of

Defense (DoD) is a major adopter of web event solutions for the purposes of communication

and training. The U.S. Army, Air Force and Navy use this technology for telemedicine,

distant learning, crisis management, and battlefield communications. However, due to

growing concerns about security, the government sector is likely to further increase the

demand for licensed web event software solutions that could be deployed in-house for

internal hosting and management.

Throughout the course of this analysis, Frost & Sullivan found that the participation of

“other” sectors such as legal/professional services, media, publishing, retail, manufacturing,

leisure and food services, among others, has become more intense. For the most part, these

other sectors are increasingly using web event solutions for training and internal corporate

communications purposes.

Finally, it is worth emphasizing that as most vertical markets are expected to show

accelerated growth during the forecast period, a large number of service providers are likely

to focus more on polishing up their customization and vertical capabilities. The current state

of the market suggests that web event service providers are actively addressing end users

needs, a trend that it is likely to set the grounds for the development of specialized niche

products.

Key Enterprise Applications

Chart 1.5 shows web event services market revenue breakouts by key enterprise applications.


C h a r t 1 . 5

Web Event Services Market: Percent of Revenues by Enterprise Applications (World), 2006


Sales and marketing are among the heaviest contributing horizontal applications utilizing

web event solutions these days. As it has been proven, web event solutions help organizations

to accelerate lead generation and time-to-market, expanding as well sales reach and coverage

while building strong and differentiated brands.

Close to sales and marketing, training is also among the primary enterprise applications.

With increased user friendliness and functionality, web events have become an ideal resource

for training geographically dispersed prospects, customers, partners and employees around

the world. Frost & Sullivan expects that sales and marketing on the one hand, and training

on the other hand are likely to further increase their revenues participation in the web event

services market over the next two to three years.

Another important horizontal application that has increased its revenue contribution is

general meetings, either for internal or external communications. Monthly/quarterly all-

hands meetings, company announcements and press conferences are clear examples of how

web events solutions are further penetrating the entire corporate business structure.

From a different perspective, it is necessary to emphasize that a growing number of investor

relations departments are only using web event technologies for conferences that require a

high level of interaction. This means that webcasting is likely to have a stronger impact in the

case that an organization needs to hold large one-to-many events with limited interaction

between the participants and the presenter/s. This argument explains the reason why the

revenue contribution of investors relations as a horizontal application has decrease during

the last four years.

Sales & Marketing35.8%

Human Resources5.0%

Investor Relations6.7%

Others 5.3%

Training27.7%

General Meetings19.5%


In 2006, sales, marketing and training represented more than 63 percent of all web event

revenues. While these applications dominate current usage, it is important to highlight that

most web event service providers are trying to find new ways to boost enterprise wide

adoption, expecting significant growth in "other" segments.

C o m p e t i t i v e L a n d s c a p e

Competitive Structure

Figure 1-7 gives an overview of the current competitive structure and the competitive factors

that are shaping the web event services market.



F i g u r e 1 - 7

Web Event Services Market: Competitive Structure (World), 2006

Number of Companies in the Market Over 150 Globally

Types of Competitors Hosted Service Providers

• Original Technology Service Provider

• Reseller Service Provider

Distribution Structure • Direct sales to end-users are predominant

• Reseller sales represent only 9% of total revenues

Tiers of Competition Concentrated market

Tier 1: Well-established companies with significant mind and market

share in the web event services market.

Tier 2: Large and mid-sized companies that are seeing growing traction

in the web event services market.

Tier 3: Companies with minor market share participation that generally

provide low-end solutions.

Notable Acquisitions, Mergers Rainmaker Systems acquired ViewCentral

Saba acquired Centra Software

West Corporation acquired Raindance

Key End-user Groups High Tech Firms

Financial Services

Pharmaceutical/Healthcare

Manufacturing

Legal/Professional Services

Retail

Leisure/ Food Services

Media/Publishing companies

Educational institutions

Public Sector

Competitive Factors Ease-of-use and user friendliness

Rich features, functionality and reliability

Brand name recognition

Global presence

Price

Integration with other enterprise applications

Scalability and security

Regulatory compliance

IT infrastructure capacity for large-scale events

Customer and support services

Customization services


Without doubt, the competitive structure in the web event services market has become more

dynamic over the last years. Ongoing sales and marketing efforts are clear examples of this

growing dynamism. In 2006, a large number of service providers announced the launch of

new products along with the enhancement of several product features and services.

Frost & Sullivan expects this trend to continue through out the forecast period.

While a big part of the market is brand driven, new lightweight market participants are likely

to emerge, focusing primarily on the needs of the SMB market. Additionally, new services

providers with strong financial backing and consolidated brand images in the enterprise

software market are expected to pose a threat to small and medium-sized players as well as to

traditional web event service providers. Without doubt, the competitive landscape is for the

most part likely to remain volatile as new revenue opportunities emerge at the surface.

Finally, when analyzing the segment for web event management services, it is important to

highlight that the expansion of the resellers’ participation through the offering of value-

added support services is absorbing demand from original web event service providers. This

situation is likely to become critical as the level of service present in web event solutions is

expected to become the main competitive differentiator in a one to two year timeframe.

Competitive Analysis and Market Shares

Figure 1-8 and Chart 1.6 represent the revenue market shares for the World web event

services market in 2006.

Note: Others include Adobe, Horizon Wimba, iLinc, Interwise, Netbriefings, ViaVid, WebDialogs, WebTrain and WILink.


F i g u r e 1 - 8

Web Event Services Market: Company Market Share by Revenues (World), 2006

Company 2006 (%)

WebEx 35.3

Microsoft 22.6

Genesys 16.1

InterCall (including Raindance) 6.8

Centra (by Saba) 4.2

Citrix 3.6

Others 11.4

TOTAL 100.0


C h a r t 1 . 6

Web Event Services Market: Company Market Share by Revenues (World), 2006


Like the web conferencing services market, the web event services market shows signs of

intense competition and concentration. Despite the fact that web event solutions are

generally place on the market as a secondary offering, several vendors are investing

significant resources to develop new product features and value-added services. Additionally,

it is important to highlight that in 2006 a growing number of service providers decided to

launch far-reaching marketing campaigns aiming to strategically increase awareness levels as

well as mind share rates.

By also dominating the web conferencing space for small meetings, WebEx has been able to

maintain the status of web event services market leader. In effect, WebEx’s market share

participation has increased over the years, showing a remarkable commitment towards the

delivery of on-demand applications for online conferencing and collaboration. The

company’s recent technological efforts have concentrated on streamlining nearly all the

audience engagement capabilities of the WebEx Event Center, further enhancing the whole

collaboration experience. Moreover, WebEx’s determination to expand its portfolio of web

event services has consolidated the development of a truly "web" touch business model that

places customers needs at the limelight. As an example of this initiative, the company is

offering directly or through partners a wide range of value-added services that ensure

customer satisfaction and maximum ROI by the implementation of best practices.

Others11.4%

Citrix3.6%

Centra (by Saba)

4.2%

WebEx35.3%

Microsoft22.6%

Genesys16.1%

InterCall (including Raindance)

6.8%


Further looking to increase integration, in September 2006 WebEx announced the

implementation of WebEx Connect, a platform that creates a two-way integration between

any on-premise third-party application and WebEx on-demand collaborative applications.

This announcement implies the fact that WebEx’s customers would now be able to integrate

data from multiple applications into a single customized collaborative workspace, gaining

simplified access to useful business information. In a lead generation context, fully

integrating applications such as CRM and ERP with the capabilities of WebEx Event Center

would improve customers’ ability to make critical business decisions in shorter time,

compressing above all sales cycles.

With a powerful brand-image and marketing strategy, Microsoft continues to hold an

important position in the web event services marketplace. As part of the launch of the

2007 Microsoft Office system, the company’s current market strategy revolves around the

development of new and sophisticated unified communications technologies. This widely

advertised endeavor reinforces Microsoft’s commitment towards the delivery of seamless,

people-centric and integrated conferencing and collaboration tools for today’s business

world.

In the case of Live Meeting, Microsoft is investing significant resources to expand the

product functionality, focusing on the development of high fidelity multimedia capabilities as

well as improved audience engagement tools. Additionally, it is important to highlight that

the company offers a robust catalog of event management and support services, allowing

their customers to have access to flexible and comprehensive turnkey solutions.

With a renovated look and important global presence, Genesys Conferencing is progressively

consolidating its status as a web event service provider that specializes in high impact events.

By mainly providing solutions to large enterprises, Genesys Conferencing has been able to

build up advanced customization capabilities in addition to proven vertical expertise.

Moreover, by leveraging the benefits of VoIP, the company is increasingly focusing on

offering a cost-effective alternative to the traditional audio conferencing services to its

assorted customer bases.

Two noteworthy acquisitions took place during 2006. In February, Centra Software was

acquired by Saba, a well-established Human Capital Management (HCM) software provider.

Considerably, this acquisition has allowed Saba to expand its presence in the enterprise

learning and collaboration industry. In April, West Corporation acquired Raindance,

increasing strategically the reach of InterCall; its well-known subsidiary specialized in

conference communications. By leveraging its core competencies, InterCall has now a larger

footprint in the web conferencing and web event services markets.


As another key player, Citrix online is gaining increasing popularity in the web event services

market. In 2006, Citrix Online launched GoToWebinar through a prominent marketing

campaign. Following a "simpler is better" approach, the company developed a do-it-yourself

web event solution that is primarily target at SMBs because eliminates unwanted IT and

event support services costs. With a flat subscription model, Citrix’s aggressive pricing

strategy offers unlimited usage for up to 1,000 attendees, allowing companies to expand the

reach of their business messages at an affordable fee.


frost & sullivan web event services market

Documents

market forecasts

market drivers

market restraints

market scope

market definitions

smb market

market overview

market shares