According to companiesandmarkets.com, the video conferencing market is entering a period of consolidation. Notable players in the consolidation of the market include Microsoft, HP, Cisco, and Logitech. Consolidation in the market is a sign of maturity, pointing to the market as reaching an important marker of growth.

Will the market be able to support extended growth? Keep reading.

New Horizons

The videoconferencing market today is experiencing a period of change and upheaval. Key to these changes is the advent of cloud computing and the impacts it has had on smaller businesses. These cloud-based services have made video conferencing options much more viable to the smaller or medium sized businesses without a lot of cash to spend. They make SMBs sign up for subscription based services that require much less in infrastructure or architecture investment, resulting in rapid growth for these non-enterprise markets.

Companiesandmarkets.com comments that this video-conferencing market is consolidating with recent acquisitions in the headlines:

“Recent acquisitions by Microsoft for Skype, Polycom for HP’s Visual Collaboration Unit and previous acquisitions of Tandberg by Cisco and LifeSize by Logitech have created strong videoconferencing vendors, ready to take on a rapidly increasing global market. In 2010, the videoconferencing market grew by 28% to total US$577.7Mn. Cloud-based videoconferencing services enable end-to-end multitenant opex-based services, fuelling demand for these solutions within small to medium sized companies.”

Yet, these advancements do not come without challenges. Business to business connectivity and interoperability are two big challenges that the video conferencing industry faces. As a response to these challenges many service providers are providing the ability to connect across exchanges and different networks.

Microsoft’s acquisition of Skype has created much buzz. Will the big M enter into the video/web conferencing market? Is it a part of a larger strategy to break into collaboration software? Will they integrate the functionality into Sharepoint? It’s hard to know at this point, but let’s hope that the move leads to longer term innovations. With greater innovation comes greater competition and subsequently grater benefits for the consumer. The end user is the ultimate beneficiary of the transaction, benefitting from much greater capabilities at lower price points.

The recent consolidations should create much greater economies of scale, at least according to theories. It’s hard to know whether the acquisitions will lead to increased profitability. There’s a big push towards HD video, but it’s still not clear how the push will play out. HD has the potential greatly improve interactions and make them a greater focus of corporate collaborative strategies.

Of course, there are many other challenges garnering the attention of people such as security, speed, and integration with Web 2.0  feaures. While we can’t exactly or precisely predict how the future will play out, it’s still useful to try and predict how different trends will influece the people