Polycom, Inc. (PLCM), CoroWare, Inc. (COWI), and other niche videoconferencing providers are facing new competition from Cisco Systems (CSCO) after its pending $3.4 billion acquisition of Tandberg, but new Vidyo technology could prove to be a powerful force over the coming months, according to some analysts.

Enterprise videoconferencing is a rapidly growing segment of the communications industry, with research firm Gartner predicting revenues to grow from $7 million in 2008 to more than $200 million by 2015. The industry’s growth is being driven by cheaper bandwidth costs, travel hassles at airports, and pressure on businesses to reduce costs.

 

One of the most promising technologies in the videoconferencing segment that has yet to breakout is known as Vidyo, which takes advantage of recent enhancements to the H.264 standard for video compression known as Scalable Video Coding or SVC. The technology enables HD, low-latency, error resilient, multi-point video communication on the desktop.

Analysts like Wedbush believe that Vidyo is positioning itself as a disruptive force to traditional players in the commercial videoconferencing market. The technology’s use of the H.264 SVC protocol enables a cheaper, higher quality videoconferencing solution available at a far lower total-cost-of-ownership. In fact, the solution has a pricing point of just $1,000 per year!

Many smaller companies, like CoroWare are building upon Vidyo’s technical advantages to help position itself as industry consolidation has created a new threat, notably Cisco Systems. Given the attractive economics and high value that customers derive by their ability to deploy enterprise videoconferencing without dedicated networks, analysts like Wedbush believe that Vidyo will emerge as a significant force in the industry over the next 12-24 months.

Source: http://www.theotcinvestor.com