Money Savings Push Growth of Video Conferencing Industriy

July 14, 2008 11:38 p.m. EST

Hopkinton, MA (AHN) - Videoconferencing has proven to be a money saver for many American companies that seek to cut travel and other operational costs.

Because of the millions of dollars that videoconferencing has saved U.S. firms, the conferencing and collaboration industry expanded by about 30 percent in 2007. In 2008, the total income of all audio, video and Web conferencing technologies is expected to hit $8 billion and is forecast to further increase to $10 billion in 2012.

Although videoconferencing has been around for several years, during its early years initial users complained of such poor quality that key company officials opted to travel to meet colleagues, investors and potential clients in person.

Driving the unexpectedly high growth in teleconferencing are the substantial increase in travel expenses and major technological improvements in quality of video conferencing and its widening acceptance in the business community.

But installing high-quality videoconferencing facilities is also a major investment, with initial expenses for software and hardware averaging $200,000 and maintenance costs of 15 percent a year.

Other incentives for companies to resort to videoconferencing include lessening the carbon footprints left by constant plane trips.

Scott Etzler, chief executive officer of InterCall, the largest provider of conference call services, said, according to USA Today, "With the additional threat of flight cuts, everybody's going to do what they can not to travel."