Nearly everyone will agree that business conducted in person is far more effective than via email or even the phone. In the past, technological limitations and costs made this impossible, but two major events disrupted this paradigm, bringing the era of video conferencing into the mainstream: the launch of Skype in 2003, which was then followed by the COVID-19 pandemic.

By 2021, the market size of global video conferencing was valued at $6.28 billion and is expected to expand at a compound annual growth rate of 12.5% from 2022 to 2030, indicating that the video conferencing industry will continue to grow for the foreseeable future. A closer look at the video conferencing trend shows that although there is plenty of potential for profit and many opportunities for consumers, there will also be fierce competition in the niche. But the brands that understand their customers and develop the best user experience will be the most successful.

In order to understand the role video conferencing will play in the economy and what it means for consumers, it’s important to define what video conferencing is.

The Definition and Benefits of Video Conferencing

The simplest definition of video conferencing is meeting with others remotely via video and other technology. As simple as this definition may be, it involves many different brands, several different methods that can be used, and a number of different benefits for consumers.

“Companies that know how to effectively utilize video conferencing by staying ahead of the trends and tailoring their brands to the consumer will be poised for success.”

The most apparent benefit of video conferencing for consumers is the convenience of connecting instantly with others anywhere in the world. The convenience of video conferencing will help free up resources in other places so consumers can have a better experience and companies can make more profits. Companies that know how to effectively utilize video conferencing by staying ahead of the trends and tailoring their brands to the consumer will be poised for success.

Let’s take a look at how the video conferencing niche began, some of the current trends, and what to expect as Zoom and other brands lead the technology into the future.

The Evolution of Video Conferencing

The video conferencing revolution that’s currently underway actually began several decades ago with an idea that to most people at the time probably sounded more like science fiction.

The idea of video conferencing was first bandied around when researchers at Bell labs proposed transmitting images over audio wire in the 1870s, not long after the telephone was invented. Due to technological limitations of the era, the proposal remained an idea until 1927, when AT&T Bell Telephone Laboratories broadcast a live-moving image of then-Commerce Secretary Herbert Hoover from the White House to New York. Although the video had no audio, the framework for video conferencing was in place and ready to take off, but then the Great Depression happened, forcing people and companies to focus on more immediate concerns.

In 1964, AT&T took the next big step forward in video teleconferencing when it presented the Picture Phone Mod 1 – the world’s first two-way video communication device – at the 1964 World’s Fair. Video conferencing continued to improve as it became synced with computer technology in the 1990s, allowing average consumers to take part through webcams. By the early 2000s, video conferencing made its next major leap thanks to some developers from Estonia.

The Birth of Modern Video Conferencing

In 2003, Niklas Zennström, Janus Friis, and four Estonian developers went public with their video conferencing application, Skype. Although Skype wasn’t the first commercial video conferencing app, it marked a major step forward for the industry and consumers. Skype offered consumers a user-friendly, fun experience that also had a business tier for corporations. The founders of Skype eventually sold their company to eBay for $2.6 billion in 2005, which was then sold to Microsoft for $8.5 billion in 2011.

Microsoft expanded Skype to different platforms, including its Xbox gaming console and mobile, on way to reaching 40 million daily users by 2020. But by 2020 the landscape of the video conferencing industry had been disrupted by the combination of a new player and the COVID-19 pandemic.

When Eric Yuan founded Zoom Video Communications Inc. in 2011, he had a tall order in front of him. Skype was still the king, but it was showing signs of vulnerability, so with plenty of hard work Yuan was able to turn $3 million in seed money into $3 billion in revenue in 2022. As good as Yuan’s business acumen and ideas were in the beginning, there’s no doubt Zoom benefited from the pandemic.

When the pandemic hit, Zoom was there to offer employers a way to keep connected with their employees and their customers. Zoom also took a page from Skype’s playbook by making it a user-friendly app that consumers could use to connect with friends and loved ones during difficult times. During the pandemic, the Zoom app became the top downloaded free app in the Apple Store and 50 million people downloaded it on Google Play, making it the second most downloaded app after TikTok at the time. Zoom is currently the most widely used video conferencing app by businesses and users, but it does have some competition.

Let’s take a look at some of these other players as well as some video conferencing trends consumers can expect to see in the future.

Video Conferencing Today

Zoom may currently control the video conferencing market in total users, but it does have notable competition, and what those competitors, or Zoom, do in the next few years to better understand their customers may determine the future of the niche. Perhaps the biggest competition is from Microsoft Teams, which has already all but put the nail in Skype’s coffin.

As the first generation of true video conferencing apps matured, more and more consumers began turning from Skype to Zoom. Part of this may have been related to marketing and branding, but the major reason was due to Skype’s limitations. Skype only has a 100-person participant capacity, compared to 1,000 for Zoom, and it also has no whiteboard option, which Zoom users particularly enjoy. Zoom also allows up to 50 “breakout” rooms, which is another significant feature missing from Skype.

These limitations led Microsoft to discontinue Skype for Business on July 31, 2021, relegating the once-dominant video conferencing app to personal use. But consumers are not without options, with Microsoft Teams filling the void left by Skype. As Microsoft gradually moved its video conferencing customers from Skype to Teams, the number of users has exploded. In January 2022, Microsoft Teams recorded 270 million monthly active users, which although short of Zoom’s numbers, still represented a 20 million person rise compared to that in July 2021.

Another potential competitor is Google Workspace and more will likely follow. More competition in the video conferencing industry will equal more consumer benefits, including lower costs for the higher-end products, but also better security. Both Zoom and Skype have been hit with security breaches, so the brand that can tout a higher level of security to consumers will be poised to capture a significant share of the market.

The Future of Video Conferencing

Perhaps the most interesting and important part of the video conferencing revolution is the technologies it will utilize in the future and how those will relate to the consumer. By incorporating technologies such as AI, the cloud, and even better office equipment, consumers of video conferencing apps can expect a better and more efficient experience that will make their work lives much more fulfilling.

Technological Advances: Ai, Cloud Phone, and More

Engineers are currently devising ways to use machine learning and AI to deploy facial recognition and virtual assistant technologies that will require fewer people – which will save companies money – and will allow the process to move quicker with fewer interruptions. AI can also help companies gain better insights into the optimal number of participants for a meeting and the best time for a meeting, which will give them more time to devote to their clients and customers.

Most video conferencing applications are deployed by on-premise software, but it is estimated that cloud-based deployment will increase by 14% over the next few years. This may seem like a development that would only interest techies at first glance, but it is important to note that cloud deployment will offer better video conferencing access for phones and laptops. Video conferencing remains focused on large, business clients, but by utilizing cloud deployment, video conferencing may begin appealing to a larger consumer base.

Another future video conferencing trend to consider is improved home office equipment. Many people who began using Zoom during the pandemic were faced with poor audio and visual due not necessarily to the software, but because of the equipment they were using. Expect companies to start selling better video conferencing setups and to target this new block of consumers who were part-time from home. Other technology features that will likely be added in the coming years to make the consumer experience better include transcription of meetings, video clipping, file sharing, translation, and integrations with productivity apps.

From Video Conferencing to Virtual Reality

Virtual reality is one final technology to consider that will benefit users and companies that utilize it. Despite its usefulness and relative effectiveness, video conferencing just isn’t the same as the real thing, so expect new companies to develop VR that will allow users to access a replica of the conference room, complete with avatars of everyone in the meeting. Spatial is a VR conferencing platform that started in January 2020 and has grown by 1000% since. A meeting in Spatial still looks more “virtual” than “reality,” but as VR technology develops expect meetings to attain a more realistic look and feel gradually.

Remote work has become one of the hallmarks of this decade thanks to a combination of advances in technology, some savvy marketing, and the unforeseen circumstances of the pandemic. Companies such as Zoom and Microsoft have so far taken advantage of this trend, but how successful they are in the future will depend on how well they understand emerging trends in the video conferencing industry and how those trends relate to their consumers.