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"So, tell me, just how big will the market for business online multimedia technology grow?"

In my job as a research director for Interactive Media Strategies, I hear this question a lot from executives looking for outside justification that their company is chasing after revenues in a worthwhile market sector. For the better part of five years, though, history has kept me from giving them a straight, quantifiable answer.

Call me a "hype-o-phobe," if you will. But memories of the earliest days of web hype a decade ago still haunt me. Companies in the go-go days would regularly trot out analyst-generated estimates forecasting market growth into the billions of dollars annually. Whether it was online advertising or pet supplies sold via the web, chances were good you could find an analyst prognosticating a billion-dollar market opportunity for the sector. Invariably, these estimates would be regarded as gospel and incorporated into a litany of corporate presentations, financial filings, and media reports.

The crash in internet stocks that took hold in 2000 exposed many of these forecasts for the folly that they were. As the venture capital money dried up, it became quite apparent that many of the markets projected to surpass that billion-dollar level would never materialize in the way many envisioned.

When opening the doors to Interactive Media Strategies in 2002 with the express focus of examining the use and deployment of digital multimedia in the business sector, it was an easy decision for me to avoid the hype-generating, market-sizing exercises characteristic of the internet’s earlier age of hyperbole.

Rather, our firm decided to quantify who was using online multimedia for business communications and their rationale for doing so. Focusing on the here-and-now details of the implementation of online audio and video has always felt a tad more credible than painting a rosy picture of exponential long-term market growth.

So, what in the name of Bob Pittman (the former AOL chief once considered among the premier purveyors of web-era hyperbole) could the team at Interactive Media Strategies possibly be thinking now? A couple months back we published our first-ever forecast estimating the growth of the market for technology tools and services for the business online multimedia communications sector. And, yes, the forecast does include the dreaded b-word.

By 2011, Interactive Media Strategies is projecting the revenues for online multimedia business communications technology will grow to $1.1 billion from its 2006 level of $282 million.

The forecast total covers the spectrum of technologies that are needed to make online multimedia presentations a business reality, from content-creation and editing tools to encoding servers and network distribution gear.

That’s a broad waterfront, but $1.1 billion is still a pretty big number. But don’t look at this forecast as a runaway train being driven by an engineer with rose-colored glasses. By our reckoning, this number still is pretty conservative given the swirling confluence of events that promises to spark significant growth in the business multimedia sector during the forecast period.

First, the forecast excludes the purchase of technology for dual purposes. So, if a customer buys network gear to expand capacity for both email and multimedia transmission, that purchase does not count in our forecast. By focusing our forecast only on technologies purchased exclusively in support of business online multimedia, we are likely understating the true impact that the technology will have in the corporate sector over the next five years.

Several factors encourage us to think that the market for business online multimedia is truly coming into its own. First, penetration levels of deployment and usage of the technology will continue to grow. As executives use the technology more frequently, budgets will grow to allow higher-quality tools and services in support of business multimedia.

More important, though, will be the transitions that take place among major vendors in the way they address opportunity in the business online multimedia sector. Cisco is the big game-changer that looms on the horizon. Its acquisition of web collaboration king WebEx earlier this year gives Cisco a major platform for pushing a new breed of hosted video services into the mainstream of corporate America by 2009—2010 at the latest. The rise of the Cisco/WebEx combination will shine the spotlight on business online multimedia like never before.Indeed, two years from now, the hype surrounding the long-overlooked business online multimedia space very well could reach deafening proportions. Just don’t let all the noise drown out the true oppor-tunities for digital media to transform the way companies communicate.

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