Editor’s note: Chip Wilcox is the CEO of Temasys.
As recently as 2012, it seemed that Web Real-Time Communication, or WebRTC, was so clandestine that the technology was a skunk works project, hidden in a back office somewhere in Silicon Valley. It is now an emerging standard of web communication that makes high-definition, high-resolution, low-bandwidth video, audio chat and peer-to-peer data transfer as simple as a single browser link.
Last year was crucial for the conversation to emerge from the developer realm and move toward the mainstream, observable through three key trends: widespread adoption; device proliferation; and rising market values.
Rising Adoption, Proliferation and Market Values
The trend is clear: communications systems are moving to incorporate WebRTC, with global players molding or adopting the technology. Communications itself is converging to a single platform, served by the WebRTC standard, which the Internet Engineering Task Force (IETF) and theWorld Wide Web Consortium (W3C) are working in tandem to formalize.
Google has driven the development of WebRTC, alongside Temasys, ARM Holdings, Imagination Technologies, Intel, Mozilla and Opera — the common goal being a WebRTC 1.0 standard. Meanwhile, companies are seeing the merits of the technology; Mozilla’s recently launched Firefox 34, 35 and 36 feature an in-browser WebRTC client, Firefox Hello. Google Hangouts, in the second half of 2014, added WebRTC functionalities. More recently,Ericsson launched its WebRTC-based browser, Bowser, and has open-sourced its own WebRTC implementation – rivaling the reference implementation previously offered by Google.
And then last October, Microsoft made its WebRTC aspirations clear, announcing that the wheels were in motion for an object real-time communications (ORTC) API, bringing WebRTC to Internet Explorer. Microsoft has also introduced Skype for Web, which is believed to have WebRTC capabilities, while their Skype for Business offering (formerly Lync) for web has RTC capabilities. Citrix’s GoToMeeting Free is powered by WebRTC. And Cisco has introduced Project Squared, proving that WebRTC is no longer geek speak; rather it is a technology on track to become mainstream.
In terms of sheer numbers, Disruptive Analysis expects WebRTC to be accessible by more than 6 billion devices by the end of 2019, meeting day-to-day social networking needs. This follows a trajectory of 1 billion devices in 2014, and 4.6 billion devices, with over 2 billion unique individuals by the end of 2016. These users will be via consumer and web applications, business users (Software as a Service-hosted unified communications, conferencing and collaboration) and telecommunication users in the VoIP, telco Over-The-Top Content (OTT) and in television.
As with most emerging technologies, putting a dollar value to WebRTC is challenging, but WebRTC is well-positioned to serve the $23 billion unified communication, the US$30 billion OTT, and the multi-billion-dollar videoconferencing, VoIP and telecommunications sectors. Smith’s Point Analytics has further estimated the market for cloud-based RTC (a close indicator for WebRTC) to be worth US$4.5 billion by 2018. Interestingly, analysts suggest that market growth will be driven largely by the Asia-Pacific region.
Developing Markets as a Growth Engine; Why Asia Is Leading
Smith’s Point Analytics made the case that developing regions will represent a significant share of market for video messaging services, and will overtake voice based services in 2015. It has also forecast that developing markets will drive disruption of web-based communications and, subsequently, increased user traffic.
With lower average revenue per user (ARPU), operators in Asia-Pacific are under pressure to adopt new monetization strategies to attract developers. Riding on this future demand, WebRTC, touted as the next generation of web communications, is set to see a surge in implementation and usage.
WebRTC’s identifiable use cases range from conferencing and collaboration for contact centers to human resources and recruitment, training, education, distance learning, market research, tele-health, transactional data exchange, gaming, surveillance, financial services and many more – all of which are booming in Asia.
Addressable Pain Points and the Need for Disruption
Legacy applications in OTT, Unified Communications (UC), and other related sectors have one major pain point – and that’s the application itself! If you think from the perspective of the end-user, they require one application for video-conferencing (Skype), then a handful for chat (WhatsApp, WeChat,Line), maybe one or two VoIP apps (Viber), and various social websites and applications (Facebook Chat, Google Hangouts).
And then there are intra-application issues; a large number of current apps are built on legacy technologies incapable of providing, all at once, high-definition audio, video and chat functionalities at low bandwidth. WebRTC developers are well-placed to cater to these needs by integrating the technological capabilities into the infrastructure.
WebRTC-based audio, video communication and peer-to-peer data transfer also has the potential to become a part of any existing SaaS, game or even Internet of Things product, enabling “in-context communication” and private data exchange. Other potential use cases lie within peer-to-peer marketplace apps similar to Airbnb, Uber; an addressable market estimated at around US$26 billion.
So You Have Your Killer App, Now What?
While developers, enterprises and large corporations are integrating communications into their applications, one key challenge that needs to be addressed is maintaining the infrastructure and supporting the next generation of online communications. Expect to see large companies working closely with disruptive WebRTC startups, either licensing the technology through plugins etc., or flat out acquiring WebRTC players, with their agile management and tech teams, better positioned to interface with developers and drive innovation.
Expect to see an industry shakeout, punctuated by a rise in M&As. Telefonica was quick to move into the space, acquiring WebRTC startup Tokbox in 2012. This year education software services company Blackboard acquired WebRTC startup Requestec. And Snapchat paid US$30 million to buyWebRTC startup AddLive. Eventually, the narrative will be not so much about providing WebRTC capabilities as much as about providing the backend and infrastructure support, with few players so far possessing such capabilities.