http://www.vyopta.com/

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INTRODUCTION

SCALE OF VIDEO USAGE GROWTH OF VIDEO

METHODOLOGY: WHAT IS IN THE DATA?

MEDIAN VIDEO USAGE BY SIZE OF ORGANIZATION

VIDEO USAGE BY INDUSTRY TYPE

OTHER INSIGHTS AND PREDICTIONS FOR THE FUTURE

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CONCLUSION

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INTRODUCTIONEnterprises have a diverse set of communication options in the workplace (IM, VoIP, audio/ video and web conferencing,) and in large enterprises managing collaboration technology is often someone’s full-time job. Video collaboration is now beginning to take up a bigger piece of the enterprise communication pie, and administrators are challenged with the task of tracking video adoption, improving call quality, and planning for the future. For these large organizations, analyzing video usage data is critical for ongoing management and optimization of their video network.

What is this report and why did we create it?

We published the “2015 Enterprise Video Collaboration Usage Report” to provide quantitative data on video usage in the enterprise. There are many useful reports based on qualitative surveys and interviews, but very few offer hard data on video collaboration adoption, scale and growth.

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METHODOLOGY: WHAT IS IN THE DATA? 1

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CH 1: METHODOLOGYThis report includes insights from videoconferencing data collected from 2013 - 2015. Our data set includes usage information for over 60 organizations from a wide variety of industries.

16% HEALTHCARE19% 9 OTHER INDUSTRIES

15% TECHNOLOGY

8% HIGHER EDUCATION6% VIDEO PROVIDERS

5% CONSUMER PRODUCTS

5% K–12 EDUCATION

5% GOVERNMENT

5% CONSULTING

11% FINANCIAL

6% LEGAL

Healthcare, technology, financial services and higher education are industries well represented in the data set. These industries are known to be early adopters and usually have a large number of knowledge workers and/or use video to deliver services. Healthcare, for example, is experiencing growth in video collaboration driven by telehealth and telemedicine solutions. “According to the American Telemedicine Association, half of all U.S. hospitals now use some form of telemedicine.”

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The vast majority of organizations in this data set have greater than 1,000 employees and almost half have greater than 10,000 employees.

For the overall video usage metric we selected a metric which shows how broadly video is used by an enterprise. The simplest metric for usage is the “video minute” which we define as the total number of minutes consumed by all the video endpoints in a video meeting. For example:

• 60 minute video meeting• Three people all calling in from different video endpoints (e.g., one calling in

from New York, one calling from Austin, one calling from San Francisco) • Total “video minutes” = 180 (3 endpoints X 60 minutes = 180 minutes).

To develop a usage estimate for the full year 2015 (noted as “2015E” in our charts), we doubled the number of video minutes used in the first six months of 2015. Since most organizations are experiencing year over year growth in total video usage, doubling the first half 2015 is a fairly simple but conservative approach.

ORGANIZATIONS BY NUMBER OF EMPLOYEES

>10k

1k–5k

5k–10k

<1k

49%

22%

18%

11%

Percentage of companies with (x) number of employees.

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2SCALE OF VIDEO USAGE

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CH 2: THE SCALE OF VIDEOHow big is BIG?

Video minutes usage varies due to many factors, but what we found is video collaboration adoption in 2015 does not follow the typical “bell curve” distribution. The median 2015 video minutes usage for all organizations in the report came to 1.9 million minutes, however there are a handful of organizations with 20-30X the median usage which represent our “power players”.

As you can see in the distribution curve below, most organizations will use between an estimated 1 million and 2 million videoconferencing minutes in 2015, but there is a long tail above the median usage level. At the top of the distribution curve 6% of organizations use more than 30 million video minutes with the top organization using more than 50 million video minutes.

Video adoption in 2015 appears to follow a power law with some organizations using video at orders of magnitude above the median. If you’ve watched a 1000 basketball players at your local gym you would never predict someone with the skills of Michael Jordan would exist. But he does. Just looking at the typical organization’s use of video and you would not predict that organizations with annual video usage of 50 million minutes exist. But they do.

Compared to the use of audio conferencing minutes, video is still a small slice of total collaboration minutes, so in the future we expect to see our distribution curve move to the right as more organizations increase adoption. We also expect the power players to grow with more organizations exceeding 50M and even 100M minutes of video usage per year.

MOST ORGANIZATIONS USE

MEDIAN AT ~1.9M1– 2M MINUTES WITH THE

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2015E VIDEO USAGE (MILLION MINUTES)

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3GROWTH OF VIDEO

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100%

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100%

CH 3: GROWTH OF VIDEOAccording to our data, video usage in the enterprise is growing quickly. The median annual videoconferencing minutes doubled from ~0.9M minutes to ~1.9M minutes over the span of 2 years from 2013 - 2015. The CAGR of video minutes usage for the Vyopta data set was ~45% which is 3–4X the expected growth rate for the annual spend on video collaboration infrastructure. Although these two numbers are not directly comparable, it is interesting to note that the underlying driver of overall market growth, usage, is strong which may imply that the overall market growth could accelerate in the coming years as more enterprises get started with video.

MEDIAN VIDEO USAGE GREW BY 100% OVER THE LAST 2 YEARS2013–2015E

1.9 2015E

0.9 2013

Median Video Usage (minutes — millions)

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291%

128%

A subset of the dataset included organizations that used software video endpoints (i.e., users conducting video meetings from their laptops) as well as the traditional hardware video endpoints throughout the 2013-2015 period. Although our data is very preliminary and should become more robust over the next year, it appears that video usage from software endpoints is growing much faster than video minutes from hardware endpoints. These findings appear to confirm the predictions of several industry analysts that software endpoints like Skype for Business (formerly Microsoft Lync) are a driving force in enterprise video collaboration adoption.

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4MEDIAN VIDEO USAGE BY ORGANIZATION SIZE

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CH 4: MEDIAN VIDEO USAGE BY ORGANIZATION SIZEAfter looking at the growth rate of video usage across the entire data set, we went a step further to gain insights on the factors that may drive video usage in an organization. The first question we asked was “does the size of an organization drive video usage?”

We found that although video usage is loosely correlated with the number of employees in an organization, the relationship is inconsistent. You can see the loose relationship with organization size and usage in the charts below.

<1K

1–5K

5–10K

>10K

2015E Video Usage (minutes — millions)

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MEDIAN VIDEO USAGE BY ORGANIZATION SIZE

Although the median annual video minutes for all organizations is 1.9 million - the smaller organizations in the report typically exceed the median at 2.1 million minutes. Mid sized organizations in the data set (organizations with 1-5K and 5-10K employees) used less minutes at 1.2 million annually. As expected, the largest organizations (greater than 10,000 employees) used the most video, more than double the median at 4.3 million minutes.

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2015E Video Minutes (millions)

Num

ber O

f Em

ploy

ees

(thou

sand

s)We conducted another analysis which further confirmed the loose relationship between the total number of employees and total video usage. The scatter plot below shows each organization mapped by the number of 2015 E video minutes on the X axis and the number of employees on the Y axis. A best fit line is plotted against the data set to show the relationship between organization size and total 2015E video minutes.

If the relationship between company size and video usage was very tight, most of the dots would be very close to the best fit line. Instead we see that there are several clusters of dots significantly below and above the best fit line.

Given our knowledge of the organizations in the data set, the number of knowledge workers or virtual team employees in an organization provides the strongest correlation between company size and usage. For example, a technology company with <10K total employees that work in teams that span wide geographies is likely to use more video collaboration than a logistics company with 400K employees where the majority of employees perform tasks that do not require video or audio conferencing to complete.

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5VIDEO USAGE BY INDUSTRY

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CH 5: VIDEO USAGE BY INDUSTRYAfter looking at the growth rate of video usage across the entire data set, the second question we asked was “are there key differences in video usage by industry?”

To answer this question we looked for industries in the data set with the most organizations that did not have outliers with unrepresentative use cases. The industries that passed our filters were: Consulting, Technology, Healthcare, Financial, Legal and Higher Education.

2015E Video Usage Minutes

1,800,000

7,500,000 7,400,000

1,500,0001,400,000

1,300,0001,200,000

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The industry metrics help us identify usage benchmarks and also give us an idea of where these industries are on the video adoption curve. Our qualitative research shows that many organizations in technology and consulting have higher usage for two reasons: they have a higher concentration of knowledge workers (see previous chapter) in their organization and they are further along in the adoption curve for new technologies. In addition, industries further down the technology adoption curve appear to be experiencing accelerated video growth from a “virtuous cycle” where more usage creates more users and so on.

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6KEY INSIGHTS AND PREDICTIONS

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CH 6: KEY INSIGHTS AND PREDICTIONSBy looking at video collaboration usage trends across 60+ large enterprise organizations we provided quantitative analysis to complement the qualitative research on the video collaboration industry. In some cases we confirmed industry assumptions and in other cases we uncovered new findings. Below are the top 5 insights and predictions based on our analysis.

. Video collaboration is growing rapidly in the enterprise.• The video usage of the median organizations in our data set grew by over

100% from 2013 to 2015 (CAGR of ~ 45%). Video adoption in the enterprise follows a power distribution curve and

not a normal distribution curve.• Although most enterprises will use between 1-2 million minutes of video

conferencing in 2015, there is a long tail of organizations that will use 20-30X more than the median number of video minutes.

. The number of knowledge workers, especially members of geographically distributed teams, drives video collaboration usage much more than the total number of employees.• Although there is a loose correlation between video usage and the number

of employees in an organization, there are plenty of examples where small organizations use more video than much larger companies.

• Organizations where video collaboration can help employees get things done better are the ones experiencing the highest rates of adoption.

. Software endpoints will continue to be a driving force behind greater video adoption in the years to come.• Video usage from software video endpoints (i.e., laptops) grew more than

twice the rate of video minutes from hard video endpoints.. We are still very early in the video collaboration adoption curve. The

best is yet to come.• The number of video minutes used by enterprises is still a small fraction of

the number of audio conferencing minutes used.• We expect the median of 1.9M minutes per year to grow substantially in the

coming years and we expect the number of power user enterprises which consume more than 30M minutes of video to grow even faster.

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CONCLUSIONThis report is just a first step in our efforts to provide useful quantitative usage data for the collaboration industry and the IT professionals that spend their days helping teams be more effective. In the coming years our data set will continue to improve and we will partner with others to uncover more actionable insights we can share with the community.

In the meantime, we encourage video and collaboration technology professionals to see how their organizations use of video compares to our findings.

• Will your organization use more than the 1.9 M minutes of video conferencing in 2015?

• Are you seeing faster growth in minutes from software video endpoints vs. hardware video endpoints?

• Is your organization just getting started with video or is your organization a power user with 30M+ video minutes per year?

• How many audio conferencing minutes do you use per year? What percentage of these minutes will move to video next year?

Feel free to visit www.vyopta.com or learn about our collaboration analytics products.