Streaming Media - 2008 Industry Sourcebook - (Page 32) industry update executive officer of Accordent Technologies. “Our customers are business people solving business problems. They’re serious about it.” And companies are spending serious dollars on the implementation of online multimedia for business applications. One-quarter of all companies represented in a survey of 1,209 executives conducted by IMS in the first quarter of 2007 reported that they invested more than $100,000 in online multimedia technologies annually. At the top of this list, 6% of all companies represented in the survey reported annual budgets for online multimedia that exceeded the $1 million level. True to historic form, the ranks of the big spenders for online multimedia are populated primarily by large companies. Of the companies represented in the IMS survey that generate more than $1 billion in annual revenues, 54% report that they budgeted more than $100,000 for online multimedia technology. The emergence of reliable, consistent corporate spending patterns is a good sign for the long-term health of the industry, says VBrick’s Mavrogeanes. “What’s noteworthy about 2007 is what is not noteworthy,” he says. “Success is never newsworthy. We’re seeing thousands of companies using this technology and using it successfully.” Increases in multimedia spending in 2007 came primarily from the companies that had already invested significantly in the technology. Among organizations spending more than $100,000 a year on online multimedia, for example, 43% reported plans to boost their 2007 budgets for the technology over the 2006 spending levels. In contrast, only 12% of companies spending less than $10,000 a year on online multimedia are expanding their 2007 budgets for online audio and video. Number of Online Multimedia Events Deployed Annually Number of Online Multimedia Events Deployed Annually 34% 6% 23% 18% 19% Table 1 More than 100 50 to 100 10 to 49 One to 10 Zero Source: IMS Enterprise Web Communicatations Strategy Survey, 1Q 2007 Democratizing Video in the Enterprise Moves made by major technology vendors in 2007, however, may pave the way for expanded use of online multimedia among companies of all sizes. One may think of these developments as spurring the “democratization of online multimedia” in the corporate sector. In December, for instance, Adobe announced plans to offer new versions of its Flash Media Server product line that 32 STREAMING MEDIA INDUSTRY SOURCEBOOK 2008 significantly reduce the cost of distributing content in the Flash Video format. The move is expected to spur increased competition with Microsoft, which spent the bulk of 2007 promoting the capabilities of its Silverlight platform, which promises to integrate more interactive design features into Microsoft’s Windows Media format. As competition intensifies and the enabling technology becomes more affordable, access to the tools for creating multimedia content will continue to expand. And it’s the development of platforms that push multimedia into ever-smaller organizations and that puts creation capability into the hands of more individuals that will foster long-term growth in the enterprise multimedia sector, says Rimas Buinevicius, chairman and chief executive officer of Sonic Foundry, a developer of rich media content creation and management solutions. The push to promote more widespread access to multimedia content creation capabilities already is taking hold in the education sector—a development that promises to spread to the corporate world as today’s students graduate and move into business, Buinevicius says. “The biggest ‘Eureka!’ I saw in 2007 in terms of usage came in the most progressive education institutions that are adopting this technology,” he says. “Many are going beyond the basic capture of professor lectures to enabling students to create and communicate using this technology.” Perhaps the corporate move with the most important long-term implications for democratizing the use of online multimedia in the workplace was the March 2007 announcement by Cisco Systems of plans to acquire web conferencing leader WebEx Communications in a cash deal valued at $3.2 billion (or $2.9 billion if you count the $300 million of debt on WebEx’ balance sheet at the time the deal was announced). The ultimate impact of the Cisco/WebEx combination on the online multimedia sector may not be immediately clear to all technology industry watchers. After all, WebEx for years has paid only lip service to the integration of voice and video capabilities into its core web conferencing platform. But the company has never had the organizational will—or the resources—to seriously promote web audio and video to a subscriber base that used WebEx mostly as a platform for sharing PowerPoint slides online during business teleconferences. Indeed, initial reports of the deal in traditional news outlets trumpeted the deal as a harbinger of an increased focus on “unified communications.” Others characterize the acquisition as a shot across the bow of Microsoft, which itself acquired WebEx rival PlaceWare in 2003. Both of these assessments are true but largely miss the forest for the trees. Make no mistake: This deal is about Cisco’s desire to drive video to a broader set of businesses than ever before. WebEx is Cisco’s new beachhead for delivering web communications services to business customers. It’s likely that Cisco will attempt to infuse the WebEx platform with enhanced VoIP and video communications capabilities
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