frost & sullivan web event services market
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Web Event Services MarketTRANSCRIPT
www.frost.com
World Web Event Services Markets
N100-64
#N100-64 © 2006 Frost & Sullivan www.frost.com
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Table of Contents
C h a p t e r 1
World Web Event Services Markets
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
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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
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List of Figures
C h a p t e r 1
World Web Event Services Markets
1-1 Web Event Services Market:
Top Market Challenges (World), 2007-2013 1-7
1-2 Web Event Services Market:
Market Drivers Ranked in Order of Impact (World), 2007-2012 1-8
1-3 Web Event Services Market:
Market Restraints Ranked in Order of Impact (World), 2007-2012 1-9
1-4 Web Event Services Market:
Revenue Forecasts (World), 2004-2012 1-10
1-5 Web Conferencing Services Market:
Revenue Forecasts for Technology Service Providers (World), 2004-2012 1-11
1-6 Web Event Services Market:
Average Prices Weighted by Market Share (World), 2006 1-14
1-7 Web Event Services Market:
Competitive Structure (World), 2006 1-23
1-8 Web Event Services Market:
Company Market Share by Revenues (World), 2006 1-24
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List of Charts
C h a p t e r 1
World Web Event Services Markets
1.1 Web Event Services Market:
Market Engineering Measurements (World), 2006 1-6
1.2 Web Event Services Market:
Revenue Forecasts (World), 2004-2012 1-10
1.3 Web Conferencing Services Market:
Revenue Forecasts for Technology Service Providers (World), 2004-2012 1-12
1.4 Web Event Services Market:
Percent of Revenues by Vertical Market (World), 2006 1-19
1.5 Web Event Services Market:
Percent of Revenues by Enterprise Applications (World), 2006 1-21
1.6 Web Event Services Market:
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.
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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
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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.
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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.
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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.
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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
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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
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Source: Frost & Sullivan
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
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Source: Frost & Sullivan
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
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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
Note: All figures are rounded; the base year is 2006. Source: Frost & Sullivan
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 (%)
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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.
Note: All figures are rounded; the base year is 2006. Source: Frost & Sullivan
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%
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C h a r t 1 . 3
Web Conferencing Services Market: Revenue Forecasts for Technology Service Providers
(World), 2004-2012
Note: All figures are rounded; the base year is 2006. Source: Frost & Sullivan
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
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■ 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.
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■ 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
$0.34 per participant. The main reason behind this phenomenon is associated with the fact
that the top three service providers control a great part of the web event services market,
keeping prices per minute at a high level. Competitive factors such as brand-image
recognition, global presence and high touch customer services, among others, are allowing
companies with important market share participation to define higher prices per minute in
comparison with companies that hold minor market share percentages.
Note: All figures are rounded; the base year is 2006. Source: Frost & Sullivan
From a per-event pricing perspective, the situation is different for various reasons. For the
past few years, most web event service providers have offered important discounts based on
usage volume. Additionally, as commoditization and attendance levels have increased
significantly since 2003, the average base price per-event has declined 47 percent. However, it
is necessary to point out that important value-added product features and services such as
audio and video streaming, e-commerce and event management and support, among others,
are offered at additional cost, consequently increasing the final price per-event.
F i g u r e 1 - 6
Web Event Services Market: Average Prices Weighted by Market Share (World), 2006
Event Service Average Weighted Price ($)
Per Minute per Participant 0.35
Per Event (75 participants/60 minutes) 1,563.54
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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.
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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
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■ 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.
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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.
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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
Note: All figures are rounded; the base year is 2006. Source: Frost & Sullivan
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%
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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.
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C h a r t 1 . 5
Web Event Services Market: Percent of Revenues by Enterprise Applications (World), 2006
Note: All figures are rounded; the base year is 2006. Source: Frost & Sullivan
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%
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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.
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Source: Frost & Sullivan
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
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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.
Note: All figures are rounded; the base year is 2006. Source: Frost & Sullivan
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
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C h a r t 1 . 6
Web Event Services Market: Company Market Share by Revenues (World), 2006
Note: All figures are rounded; the base year is 2006. Source: Frost & Sullivan
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%
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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.
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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.
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