WebEx connects with BT in Europe

U.K.-based telecommunications company BT Group PLC has agreed to resell WebEx Communications Inc.'s Web conferencing services in a deal WebEx predicts will boost its European business.

BT offers the WebEx service together with its own teleconferencing services as a new product called "BT Meeting Centre, powered by WebEx." The Web conferencing service can be accessed through BT's MeetMe and its teleconferencing reservation system, WebEx said Friday. The San Jose, California, company is planning to officially announce its partnership with BT on Tuesday.

WebEx is considered the market leader in Web conferencing, a crowded space where rivals include Microsoft Corp. and Cisco Systems Inc. Earlier this month it reported net income for last year's fourth quarter of US$34.5 million on revenue of $53.9 million. More than 90 percent of that revenue was generated in the U.S., the company said.

Partnerships are a key part of WebEx's strategy to grow in Europe, said Tony Gasson, WebEx vice president for Europe, the Middle East and Africa. WebEx already has deals with other European telecommunications companies, including France Telecom SA and TeliaSonera AB, but BT is its biggest partner to date, Gasson said.

"I would expect BT to be a predominant partner in Europe, absolutely. A major part of the European accounts are based in the U.K, there is a big market to be won," he said.

BT will offer the WebEx service throughout Europe, but with a focus on its home market, in English and in German, Gasson said. The Web conferencing service is also offered by other partners in Swedish, Chinese and Japanese. Spanish will be added soon, he said.

While WebEx has localized its services, Microsoft has not. Although the Redmond, Washington, vendor says it is working on localized editions of its Live Meeting Web conferencing offering, it has no language or availability details.

"Microsoft Office Live Meeting 2003 is built from the ground up to support internationalization. While Live Meeting is currently available in English only, we will be building in local language support as to best meet our customers requirements in future versions of Live Meeting," a Microsoft spokesman said.

Hooking up with BT is a smart and timely move by WebEx, said Claire Schooley, a San Francisco-based senior analyst at Forrester Research Inc.

"It is good timing, WebEx has been strongest in North America, no doubt about that. The European market is going to grow and it is going to grow very fast," she said. "WebEx does an incredible marketing job in the U.S. When you say Web conferencing, people say WebEx."

Microsoft, which acquired Web conferencing company PlaceWare Inc. about a year ago, doesn't yet pose much of a threat to WebEx in Europe, according to Schooley. "Microsoft will be a very strong competitor at some point worldwide. Right now they are still in the early stages of their service," she said.

Cisco completed its acquisition of another large Web conferencing player, Latitude Communications Inc., last month.

Schooley expects the U.S. Web conferencing market in terms of revenue to hit close to $875 million in 2004. That should grow to $2.2 billion by 2008, she said. In Europe the market is expected to be at $200 million in 2004, growing easily up to $900 million by 2008, she said.

Pricing for the WebEx service offered by BT is expected to be about the same as the U.S. service, a WebEx spokesman said. The U.S. service costs $0.45 a minute per connected user, or can be bought on a subscription basis, he said.

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