According to a new market research report by Meticulous Research, the Video Conferencing market is expected to grow at a CAGR of 15.5% from 2021 to 2028 to reach $24.4 billion by 2028.
The growth of the video conferencing market is primarily driven by factors such as the growing demand for high-speed video communication products and emerging work-from-home culture across the globe. Further, by inculcating this technology, users can boost productivity, save time, and reduce travel expenses. However, less personal contact & understanding, network instability & time lag, technical issues & employee training, and more stress & less organization are some of the key factors restraining the growth of this market to a certain extent.
Impact of COVID-19 on the Video Conferencing Market
In the first quarter of 2020, the world was hit by the COVID-19 pandemic. The spread of COVID-19 has had an unprecedented impact on public health and industrial structures, accelerating social reforms in several areas. Though the nature of the macro challenges, such as disrupted supply chains, decentralized workforce, and the provision of safe and healthy employee workspaces, are different than in past recessions, the market players must deal with these monumental challenges. Amongst this disruption, video conferencing was one of those few entities that noticed exponential growth in adoption as the need for communicating through remote places grew extensively.
The video conferencing market witnessed tremendous growth amidst the pandemic as lockdowns forced many individuals across the globe to work from home and attend online classes, which led to a surge in the adoption of popular software like Zoom, Skype, and Microsoft Teams. For instance, in October 2020, Microsoft Teams registered more than 115 million daily active users. Thus, with advancements in technology and increasing usage of this technology, the market is poised to grow immensely in the coming years.
Work from Home Culture to Drive the Market Growth
The outbreak of the COVID-19 pandemic changed the overall working culture of several companies globally as due to lockdowns and social distancing, the companies had to adopt work from home culture. This increased the dependence of the employees, students, and other professional workers on video conferencing tools such as Zoom, Skype, Google Duo, and Microsoft Teams, among others, for effective communication. As a result, the market witnessed a high upsurge in adopting these tools, which is anticipated as a major driving factor for this market. Moreover, adopting work from home culture allowed companies to witness improved employee productivity due to less time for commuting, better work-life balance, and location independence. Thus, the realization of improved productivity amongst the companies boosted the adoption of the latest video-conferencing tools. In April 2020, Tata Consultancy Services (TCS), an India-based IT service provider, announced its plan to allow 75% of employees, around 4.5 lakh, to work from home until 2025. Furthermore, Infosys, a major IT service provider, has permanently announced flexible work from home model.
Based on technology, the video conferencing market is segmented into VaaS, USB-VC, and Room-based Codec System. In 2021, the USB video conferencing segment is estimated to account for the largest share of the overall video conferencing market. USB Conferencing systems are simple to use and compatible with most cloud- and web-based conferencing applications, such as Zoom, Microsoft Teams, Skype for Business, Skype, and Google Meet, among others.
Based on component, the video conferencing market is segmented into solutions and services. In 2021, the solutions segment is expected to account for the largest share of the video conferencing market. The growth in the adoption of room conferencing meetings during the lockdown has positively impacted the demand for multi-codec and single-codec endpoints, such as phones, cameras, and mics. Moreover, the growing adoption of cloud-based software, such as Zoom, Teams, WebEx, and Meet with the daily increase in their subscriptions is expected to drive the growth of this segment in coming years with significant CAGR.
Based on deployment mode, the video conferencing market is segmented into cloud and on-premises. In 2021, the cloud segment is estimated to account for the largest share of the overall video conferencing market owing to benefits such as low investment cost and maintenance than on-premises deployment. Moreover, this segment is further expected to grow with the fastest CAGR due to the availability of highly secure cloud services with the latest security firewall, thus reducing the risk of data breaching.
Geographically, the global video conferencing market is segmented into five major regions: North America, Europe, Asia-Pacific, Latin America, and the Middle East & Africa. In 2021, the North American region is estimated to account for the largest share of the global video conferencing market. The large share of this region is primarily attributed to the presence of many IT companies, acceptance of the latest technologies, and growing dependency on video conferencing tools from SMEs. However, the Asia-Pacific region is estimated to grow with the fastest CAGR owing to growing awareness regarding the usage of internet services, increasing number of start-ups engaging with video conferencing platforms, and rising government initiatives in up-bringing and protecting the non-digitalized businesses by engaging them with several other digital platforms.
The key players operating in the global video conferencing market are Zoom Video Communication, Inc. (U.S.), Microsoft Corporation (U.S.), Cisco Systems, Inc. (U.S.), Blue Jeans Network Inc. (Verizon) (U.S.), LogMeIn, Inc. (U.S.), Alphabet Inc. (U.S.), ON24, Inc. (U.S.), Dialpad, Inc. (U.S.), TeamViewer AG (Germany), Adobe (U.S.), Blackboard Inc. (U.S.), and Vidyo, Inc. (U.S.) among others.