Editorial: VC market is not a see-saw with Cisco and Vidyo on opposite sides

Was anybody surprised by Cisco’s  diminished revenues from TelePresence sales? Results show “collaboration” revenues down by 8%  in the most recent quarter, to $992 million. Some commentators apparently see this as evidence that Vidyo is impacting Cisco’s business.  Frankly, I doubt it. That’s not to take anything away from Vidyo, whose billings in 2011 increased by over 80%, with a 90% increase in billings in Q1/12 over Q1/11 (remembering that if you start from $1, $2 is 100%). But the VC market is not a see-saw with Cisco on one side and Vidyo on the other.

We’d rather believe that Vidyo’s growth has primarily been through driving VC into areas that Cisco was unlikely to reach with TelePresence systems. And Cisco’s diminished TelePresence performance is not least because of the global economic picture. Other vendors of high value CapEx items tell us that purchasing cycles have been extended by large enterprises as they seek to keep their books looking as healthy as possible in uncertain times. But lower cost VC options can’t be ignored, and Cisco is looking to Jabber to try to stop low-cost sales escaping the Cisco net.

We remember what Infonetics said back in March: “The global enterprise video conferencing and telepresence market jumped 15% to $882 million between the third and fourth quarters of 2011, setting a record high for quarterly revenue. For the full year 2011, sales of videoconferencing and telepresence equipment are up 34% to $2.99 billion. Infonetics expects a cumulative $22 billion to be spent by enterprises on videoconferencing and telepresence hardware and software from 2012 to 2016.”

With the current state of business one is forced to wonder how much, or indeed how little, of that $22 billion will be to Cisco’s benefit.