BT promotes Microsoft over WebEx for Web conferencing

WebEx had inked a relationship with BT for the European market in February

In an apparent setback for WebEx Communications, U.K. telecommunications company BT Group is now promoting Microsoft's Live Meeting as its primary Web conferencing service.

WebEx, considered the worldwide market leader in Web conferencing, announced its relationship with BT for the European market in February. It said at the time that the deal was important to boost its business outside the U.S., where it made just 10 percent of its revenue in last year's fourth quarter.

However, while WebEx is still offered by BT, the telecommunications company is now promoting Microsoft's Live Meeting, formerly PlaceWare, as "the best in class Web conferencing" on BT's Web conferencing Web site. The site also contains a side-by-side comparison of Live Meeting and WebEx that shows Microsoft's product outclassing WebEx.

WebEx was taken aback by how BT described its service. "There are some factual errors there. Obviously we have to talk to our BT partners," said Praful Shah, vice president of strategic communications at WebEx. "We would not be the market leader if we could not deliver the quality of service."

Any errors notwithstanding, WebEx is happy to be listed on the BT site alongside Live Meeting, Shah said. In fact, BT has been offering PlaceWare services for some time, and added WebEx to offer customers an alternative, he said.

BT representatives did not return calls seeking comment in time for this story. Microsoft said in a statement that it has an ongoing relationship with BT and looks forward to continuing it.

Microsoft has invested a lot in the Live Meeting product since it acquired PlaceWare last year, said Rob Enderle, principal analyst with The Enderle Group in San Jose, California. That BT is pitching Microsoft as its preferred Web conferencing provider probably means it feels Live Meeting is superior to the WebEx offering, he said.

"BT should be considered relatively unimpeachable when it comes to a product that comes from a third party. They're only interested in making sure that their customers get a good experience," he said. "For BT it should not make a lot of difference because both Microsoft and WebEx are going to drive revenue to BT."

Web conferencing is a burgeoning market with several players including WebEx, Microsoft, Cisco Systems, and Raindance Communications. Last year the market generated $472 million in revenue, which is expected to grow to $3 billion in 2010, according to consulting firm Frost & Sullivan.

WebEx controlled 67 percent of the market last year, far ahead of Microsoft, which came second with 16.5 percent. The other vendors have shares below 10 percent, according to Frost & Sullivan.

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