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Video conferencing finally takes wing | November 17, 2008
Long a solution looking for a problem, video conferencing is finally being pushed into the mainstream by fuel prices, border hassles and the greening of Canadian companies
By Danny Bradbury
Pat Burke isn’t a terrorist, so why was he held up for three hours at the American border on a flight from Toronto to Las Vegas? It turns out that having an obviously Irish name can work to your disadvantage if you run into a skittish border guard. Al Qaeda isn’t the only terrorist group U.S. immigration officials are afraid of, and the guard told him his name had triggered alarm bells. For Burke, it’s just one example of why flying has become a trial rather than a treat.
“We dropped a lot of flights because of 9/11,” he said, speaking from the Mississauga, Ont., offices of Psion Teklogix, the tech company at which he works as IT services manager. “We couldn’t get some of the guys in our Kentucky office to fly up. They’d drive instead.”
With offices in France and England alongside the two North American sites, the company had been spending significant dollars to fly its board-level executives to meetings. But with the inconvenience of flying during paranoid times, coupled with the rise in fuel prices, the company decided to explore video conferencing. With four room-sized systems now in place, it hasn’t looked back and it could be an example of a sea-change in attitudes toward this long-available but rarely adopted technology.
Slow start
Video conferencing systems have been around for 25 years, but take-up has been relatively flat. The technology was expensive, and so was the bandwidth necessary to make it work adequately. Add to that the technical knowledge and preparation required to get a call running smoothly, and the systems simply weren’t attractive.
But things are changing. The cost of air travel is rising, along with oil’s price per barrel. This year, both Air Canada and West Jet imposed a fuel surcharge as they struggled to offset the cost of fuel with seat pricing.
The green issue, too, has become a pressure point for companies; with customers asking questions about their vendors’ stance, these companies must consider their overall carbon emissions more than they did before. Also, the current worldwide financial crisis has companies reconsidering every expense.
These issues have all contributed to a marked uptick in sales of video conferencing equipment in recent years. Wainhouse Research, which follows the video conferencing market, has seen 25 per cent year-on-year growth for the first time in the video conferencing sector.
“One thing that changed in the last seven years is that video conferencing moved from running on ISDN to running on IP networks and the Internet,” said managing partner Andrew Davis. Video conferencing systems used to work by aggregating dedicated dial-up integrated services digital network (ISDN) lines, which provided a higher throughput than conventional analogue dial-up connections. But they were expensive and aggregation was a specialist activity. Today, with multi-megabit DSL broadband connections or high-throughput dedicated leased lines being more readily available, that problem has gone away.
Selling “telepresence”
Video conferencing vendors, plagued for years by such difficulties, are using everything in the marketing toolbox to encourage a renaissance in the technology. The likes of Cisco, Nortel, HP and Tandberg are reinventing the genre under a new name: telepresence. You’ll see solutions such as HP’s Halo branded with this concept, which is associated with life-sized video images and near-direct eye contact between participants. However, the underlying message is one of remediation: making up for the inadequacies of the past.
“It’s a tight integration of video and audio technology plus a service wrap around. That’s a key differentiator from video conferencing and it explains why HP et al made such a splash,” said Dominic Dodd, senior industry analyst and program manager with Frost & Sullivan’s European information communication and technologies practice. “They identified the network as the problem. They identified that where customers were happy with visual communications, they could have the call and the meeting and not worry about the technology.” In other words, telepresence is video conferencing with no glitches. It’s everything that the concept should have been in the first place.
“One of our IT guys had a bad personal experience with video conferencing at another company. That’s why it took awhile,” confirmed Burke, who said the company had tested various video conferencing solutions over the years before taking the plunge. The board, fed up with flying to so many meetings, told the IT department to make it happen. Burke brought in Toronto-based Videoconference Solutions, who sold him four systems from LifeSize, a manufacturer of high-definition video conferencing equipment. “Now, we have a virtual C-suite.”
Economic considerations
But even with prices coming down, the cost of these systems is still a barrier, even with the promise of long-term savings. Polycom puts a $100,000 floor on its telepresence systems, for example, and HP’s chief Halo scientist Mark Gorynski agreed there may be a glass ceiling, but adds that it depends on your business model. “The larger firms are obviously more likely to invest,” he said. “But if an organization is spending a lot of time, energy and money trying to get its higher-level people together, then the return on investment may be very fast. That may be a six-month return on investment, just looking at the travel cost, not even looking at the softer cost of being able to go home to the family every night.”
With the U.S. government repossessing the Fannie May and Freddie Mac mortgage organizations, and with analysts worried about a global meltdown, it seems less likely that many smaller firms will be willing to invest today. Even though it has only piloted four systems, Psion Teklogix has 43 offices in 32 countries. It has the capital to invest. What will it take to get other companies interested?
“You’ll see a blurring between top-end high-definition and basic telepresence, especially as companies are finding that the floor space for a full telepresence meeting room is hard to justify,” said Frost’s Dodd, who said large LCD screens in a room serving four people at most will be the sweet spot for smaller companies.
Psion Teklogix installed LCD screens between 42- and 50-inches in size at three of the four initial video conferencing locations, although the French offices use a simple overhead projector for their display, making the system cheaper still. LifeSize also has data capability in addition to the audio and video channels, so that meeting attendees can distribute presentations.
“If it’s executives, it’s mostly PowerPoint that they’re showing. If it’s engineers, then they’re holding a prototype up to the camera so that they can discuss it across the water,” said Burke, adding that the user base is expanding within the company. “We picked our four largest offices where most of the C-level guys hang out for the video conferencing system, but they are also the big R&D and engineering offices. The engineering guys caught onto it.” He is consequently preparing to install a second LifeSize system in the Mississauga office.
Some companies may also take a longer-term view, Dodd adds. “The financial sector was traditionally a strong investor in telecoms. We’re seeing some of them sitting on their hands because of the impact in their sector,” he said. “Others are still saying there will be an upturn in 18 months to two years, and they want to have that ability to leverage their global capacity when the upturn comes.”
“Banking is an area where there’s strong traction, because of the geographic spread of the banking industry,” agreed Erica Shroeder, direct market manager for Cisco Telepresence. “Rapid decision making is a big deal in banking.”
Smaller firms with less capital may be more interested in smaller desktop-based systems, and these are getting better. LifeSize sells a high-definition system that can sit on a desk and that only requires 768Kbit/sec in bandwidth. The LifeSize Express, for example, costs about $6,000 per device and at least two are required. Some companies are already working toward more widespread video conferencing systems, in which any desktop client in a company can be easily linked to any other on an ad hoc basis. Polycom is eager to see this happen, and recently shipped a new version of its Converged Management Application (CMA) Desktop video conferencing solution.
“There’s instant messaging, and it’s all tied into a [Lightweight Directory Access Protocol] directory. The technology for very easy ad hoc quick video is there,” said Laura Shay, director of marketing for video solutions at Polycom. “I had the previous desktop version but you had to know someone’s IP address. It didn’t have presence, either, but this one does. I can see who’s online, offline, who’s busy or who’s in a call.”
However, many companies are still only getting to grips with basic VoIP installed for cost-saving purposes. Integrating presence, video and phone systems begins to sound more like unified communications, and that’s still a nascent market for Canadians. And while Canadian businesses tackle that, they face another problem: interoperability. Shay said the Session Initiation Protocol (SIP)—traditionally used for beginning VoIP calls—could solve part of that problem. The other part will be solved by conferencing bridges that allow systems from different vendors to talk with each other. Psion Teklogix has already begun video conferencing with a couple of third-party suppliers that had older ISDN-based systems, using a conference bridge to tie the systems together.
Video conferencing doesn’t completely replace travel. Watching a video conference is like editing documents on-screen: useful, but tiring if you do it too much. “Executives that I talk to would say ‘If I have a three-hour meeting I’d probably still fly,’ Burke said. But with a 20 to 25 per cent cut in travel since February, the firm is feeling the benefit of lower travel costs and the company can make better use of an executive’s time. “Just by having the guy out of the office, he was less available,” Burke said. In an era of rising air costs, concern over carbon emissions, and more flexible broadband options, at least some in Canada are finally getting the picture.
SIDEBAR
The video conferencing market has gained 25 per cent year-on-year, according to Wainhouse Research.
Definitions
SIP: Session Initiation Protocol is an Internet telephony format that can cover voice communication or multimedia elements such as video, voice, chat, virtual reality, etc.
LDAP: the Lightweight Directory Access Protocol enables users to locate people, organizations and other resources in an Internet or intranet directory.
GreenTrends Archive
By Danny Bradbury
Pat Burke isn’t a terrorist, so why was he held up for three hours at the American border on a flight from Toronto to Las Vegas? It turns out that having an obviously Irish name can work to your disadvantage if you run into a skittish border guard. Al Qaeda isn’t the only terrorist group U.S. immigration officials are afraid of, and the guard told him his name had triggered alarm bells. For Burke, it’s just one example of why flying has become a trial rather than a treat.
“We dropped a lot of flights because of 9/11,” he said, speaking from the Mississauga, Ont., offices of Psion Teklogix, the tech company at which he works as IT services manager. “We couldn’t get some of the guys in our Kentucky office to fly up. They’d drive instead.”
With offices in France and England alongside the two North American sites, the company had been spending significant dollars to fly its board-level executives to meetings. But with the inconvenience of flying during paranoid times, coupled with the rise in fuel prices, the company decided to explore video conferencing. With four room-sized systems now in place, it hasn’t looked back and it could be an example of a sea-change in attitudes toward this long-available but rarely adopted technology.
Slow start
Video conferencing systems have been around for 25 years, but take-up has been relatively flat. The technology was expensive, and so was the bandwidth necessary to make it work adequately. Add to that the technical knowledge and preparation required to get a call running smoothly, and the systems simply weren’t attractive.
But things are changing. The cost of air travel is rising, along with oil’s price per barrel. This year, both Air Canada and West Jet imposed a fuel surcharge as they struggled to offset the cost of fuel with seat pricing.
The green issue, too, has become a pressure point for companies; with customers asking questions about their vendors’ stance, these companies must consider their overall carbon emissions more than they did before. Also, the current worldwide financial crisis has companies reconsidering every expense.
These issues have all contributed to a marked uptick in sales of video conferencing equipment in recent years. Wainhouse Research, which follows the video conferencing market, has seen 25 per cent year-on-year growth for the first time in the video conferencing sector.
“One thing that changed in the last seven years is that video conferencing moved from running on ISDN to running on IP networks and the Internet,” said managing partner Andrew Davis. Video conferencing systems used to work by aggregating dedicated dial-up integrated services digital network (ISDN) lines, which provided a higher throughput than conventional analogue dial-up connections. But they were expensive and aggregation was a specialist activity. Today, with multi-megabit DSL broadband connections or high-throughput dedicated leased lines being more readily available, that problem has gone away.
Selling “telepresence”
Video conferencing vendors, plagued for years by such difficulties, are using everything in the marketing toolbox to encourage a renaissance in the technology. The likes of Cisco, Nortel, HP and Tandberg are reinventing the genre under a new name: telepresence. You’ll see solutions such as HP’s Halo branded with this concept, which is associated with life-sized video images and near-direct eye contact between participants. However, the underlying message is one of remediation: making up for the inadequacies of the past.
“It’s a tight integration of video and audio technology plus a service wrap around. That’s a key differentiator from video conferencing and it explains why HP et al made such a splash,” said Dominic Dodd, senior industry analyst and program manager with Frost & Sullivan’s European information communication and technologies practice. “They identified the network as the problem. They identified that where customers were happy with visual communications, they could have the call and the meeting and not worry about the technology.” In other words, telepresence is video conferencing with no glitches. It’s everything that the concept should have been in the first place.
“One of our IT guys had a bad personal experience with video conferencing at another company. That’s why it took awhile,” confirmed Burke, who said the company had tested various video conferencing solutions over the years before taking the plunge. The board, fed up with flying to so many meetings, told the IT department to make it happen. Burke brought in Toronto-based Videoconference Solutions, who sold him four systems from LifeSize, a manufacturer of high-definition video conferencing equipment. “Now, we have a virtual C-suite.”
Economic considerations
But even with prices coming down, the cost of these systems is still a barrier, even with the promise of long-term savings. Polycom puts a $100,000 floor on its telepresence systems, for example, and HP’s chief Halo scientist Mark Gorynski agreed there may be a glass ceiling, but adds that it depends on your business model. “The larger firms are obviously more likely to invest,” he said. “But if an organization is spending a lot of time, energy and money trying to get its higher-level people together, then the return on investment may be very fast. That may be a six-month return on investment, just looking at the travel cost, not even looking at the softer cost of being able to go home to the family every night.”
With the U.S. government repossessing the Fannie May and Freddie Mac mortgage organizations, and with analysts worried about a global meltdown, it seems less likely that many smaller firms will be willing to invest today. Even though it has only piloted four systems, Psion Teklogix has 43 offices in 32 countries. It has the capital to invest. What will it take to get other companies interested?
“You’ll see a blurring between top-end high-definition and basic telepresence, especially as companies are finding that the floor space for a full telepresence meeting room is hard to justify,” said Frost’s Dodd, who said large LCD screens in a room serving four people at most will be the sweet spot for smaller companies.
Psion Teklogix installed LCD screens between 42- and 50-inches in size at three of the four initial video conferencing locations, although the French offices use a simple overhead projector for their display, making the system cheaper still. LifeSize also has data capability in addition to the audio and video channels, so that meeting attendees can distribute presentations.
“If it’s executives, it’s mostly PowerPoint that they’re showing. If it’s engineers, then they’re holding a prototype up to the camera so that they can discuss it across the water,” said Burke, adding that the user base is expanding within the company. “We picked our four largest offices where most of the C-level guys hang out for the video conferencing system, but they are also the big R&D and engineering offices. The engineering guys caught onto it.” He is consequently preparing to install a second LifeSize system in the Mississauga office.
Some companies may also take a longer-term view, Dodd adds. “The financial sector was traditionally a strong investor in telecoms. We’re seeing some of them sitting on their hands because of the impact in their sector,” he said. “Others are still saying there will be an upturn in 18 months to two years, and they want to have that ability to leverage their global capacity when the upturn comes.”
“Banking is an area where there’s strong traction, because of the geographic spread of the banking industry,” agreed Erica Shroeder, direct market manager for Cisco Telepresence. “Rapid decision making is a big deal in banking.”
Smaller firms with less capital may be more interested in smaller desktop-based systems, and these are getting better. LifeSize sells a high-definition system that can sit on a desk and that only requires 768Kbit/sec in bandwidth. The LifeSize Express, for example, costs about $6,000 per device and at least two are required. Some companies are already working toward more widespread video conferencing systems, in which any desktop client in a company can be easily linked to any other on an ad hoc basis. Polycom is eager to see this happen, and recently shipped a new version of its Converged Management Application (CMA) Desktop video conferencing solution.
“There’s instant messaging, and it’s all tied into a [Lightweight Directory Access Protocol] directory. The technology for very easy ad hoc quick video is there,” said Laura Shay, director of marketing for video solutions at Polycom. “I had the previous desktop version but you had to know someone’s IP address. It didn’t have presence, either, but this one does. I can see who’s online, offline, who’s busy or who’s in a call.”
However, many companies are still only getting to grips with basic VoIP installed for cost-saving purposes. Integrating presence, video and phone systems begins to sound more like unified communications, and that’s still a nascent market for Canadians. And while Canadian businesses tackle that, they face another problem: interoperability. Shay said the Session Initiation Protocol (SIP)—traditionally used for beginning VoIP calls—could solve part of that problem. The other part will be solved by conferencing bridges that allow systems from different vendors to talk with each other. Psion Teklogix has already begun video conferencing with a couple of third-party suppliers that had older ISDN-based systems, using a conference bridge to tie the systems together.
Video conferencing doesn’t completely replace travel. Watching a video conference is like editing documents on-screen: useful, but tiring if you do it too much. “Executives that I talk to would say ‘If I have a three-hour meeting I’d probably still fly,’ Burke said. But with a 20 to 25 per cent cut in travel since February, the firm is feeling the benefit of lower travel costs and the company can make better use of an executive’s time. “Just by having the guy out of the office, he was less available,” Burke said. In an era of rising air costs, concern over carbon emissions, and more flexible broadband options, at least some in Canada are finally getting the picture.
SIDEBAR
The video conferencing market has gained 25 per cent year-on-year, according to Wainhouse Research.
Definitions
SIP: Session Initiation Protocol is an Internet telephony format that can cover voice communication or multimedia elements such as video, voice, chat, virtual reality, etc.
LDAP: the Lightweight Directory Access Protocol enables users to locate people, organizations and other resources in an Internet or intranet directory.
GreenTrends Archive
