The videoconferencing industry is getting a boost in demand from the disruption to business travel across Europe caused by a volcano in Iceland, Cisco Systems said.

The only evidence is anecdotal, but you will not get a demo room in any of the Cisco facilities, said Fredrik Halvorsen, former Tandberg CEO and head of the Cisco Systems's TelePresence Technology Group. We have seen a huge spike in usage.

Large parts of Europe enforced no-fly rulings for a fifth day on Monday because of a huge ash cloud from an Icelandic volcano that has caused the worst air travel chaos since the September 11 attacks.

Cisco became the biggest maker of videoconferencing equipment on Monday as its $3.3 billion acquisition of Tandberg, announced last October, closed. It is already the world's biggest network equipment maker.

Norwegian tech start-up Videoworks, which opened for business on Monday, said it would begin supplying a range of high-definition conferencing systems based on technology from Sony. One of the company's founders came from a top sales position at Tandberg.

Videoworks Chief Executive Even Zimmer said the volcano will make business people think about the benefits of videoconferencing.

The timing is very good. The market's growing and the consequences of the ash cloud won't be forgotten very soon, Zimmer said.

The videoconferencing sector has seen a flurry of acquisitions and, analysts say, is a key growth area as companies seek to cut business travel costs.

On a smaller scale, Logitech International SA has acquired privately held video conferencing company LifeSize Communications and U.S. based Polycom is attracting interest as the only major public videoconferencing company left without a deal.

(Editing by Tarmo Virki and Erica Billingham)

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