Web Conferencing Goes Mainstream

About four years ago, a group of engineers from business software giant CA Technologies decided to strike out on their own. The group led by DD Ganguly, the head of product development at CA, saw a huge opportunity in Web-based conferencing, and wanted to tap it. The result was Dimdim.

Plenty of big companies offer Web conferencing to large enterprises, so Dimdim focused on the small and medium-sized business market. The Boston-based firm with about 100 employees in the United States, Canada and India emerged from beta testing in 2008 and is well into its commercial phase, offering a range of collaboration tools such as Web-based video conferencing, messaging, and shared desktops.

Web-based conferencing is growing quickly. IDC expects the market for video conferencing alone to achieve a compound annual growth rate of 23 percent over the next five years, providing plenty of potential opportunity for start ups with good technology and a sound business plan.

Here are edited highlights of Portfolio.com's conversation with Dimdim chief marketing officer Steve Chazin, a sales veteran of Apple, Raytheon and other tech companies.

You are entering the market with the low, low price of free. Why?

How the heck do we make money?

We make money from large meetings. The service is free for groups of up to 20. It costs $25 a month for up to 50 people and $75 a month for meetings of 1,000.

Are you profitable?

We are a private company. We don't disclose those details yet. But we have 5,500 clients, including many small and medium-sized businesses and individuals who purchase the service on a credit card. We have some larger resellers such as Nortel and Novell.

Was it difficult to raise money?

We were able to do it. We were able to raise money from Nexus Venture Partners, Draper and Index Ventures. I think there is a lot of demand for this service. We see the world rushing toward an ad hoc collaboration tool. These tools used to be too expensive for smaller companies, but no more. Smaller businesses are our target market.

Does mobile conferencing have a future?

Dimdim works with any device that supports a browser and Flash. We don't run on the iPhone or the iPad, but we do work on other mobile devices that run Flash.