With no one certain just how bad the swine flu outbreak is going to get, and folks increasingly talking about a pandemic, the flu is landing some blows on an already unsteady economy. Service and travel industries are taking especially hard hits. Pharmaceutical stocks, however, are rising right along with fear levels since their products could be used to fight the flu.
I wonder if the telepresence market won't see a similar boost. As I wrote back in October, business executives seemed bullish on it due to its ability to help companies cut costly business travel. Companies are still in a travel-cutting mode, evidenced by an announcement that crossed my desk this morning, that the Independent Oracle Users Group is offering virtual sessions for its annual users group conference next week in Orlando. The combination of an iffy economy and a possible pandemic may lead more companies to investigate telepresence.
They should, writes IT Business Edge blogger Rob Enderle. In a post yesterday, he encouraged companies to refresh their business continuity plans, determining how they could shift large chunks of their work forces to work-at-home schedules if necessary and canceling all non-critical business travel. As part of the latter strategy, he recommends using a Web conferencing or telepresence system if you have one, or looking into renting or sharing one if you don't. And make it a priority in the next budget cycle, he writes, since there are almost sure to be future flu outbreaks.
The video conferencing business benefited from earlier disasters, including the Sept. 11, 2001, terrorist attacks and the SARS scare, says Polycom CEO Robert Hagerty in a Forbes article. The article mentions several options, including high-end and expensive systems from Cisco and HP and less costly offerings from Polycom. Both Cisco and HP have deals to offer telepresence facilities at hotels, HP with Marriott, and Cisco with Tata Group's Taj chain.
A March 2008 report from IDC called for the telepresence market to grow from $170 million to $1.7 billion by 2012. ABI Research VP Stan Schatt had a similarly optimistic outlook when IT Business Edge's Carl Weinschenk interviewed him in January. Thanks to falling prices, middle managers and not just senior executives are using telepresence, he said. ABI Research believes the market will reach $2.5 billion by 2013. Even with the tough economy, said Schatt, companies that had earlier purchased telepresence gear are making incremental investments. He said:
You can buy individual systems and take advantage of the initial investments. It is one thing to pay $300,000 for a room, another to pay between $5 and $10,000 to outfit middle manager so they do not have to travel to Asia. It does not take too many trips to recoup the cost. Where we are seeing a decline is in the financial sector. They certainly were early adopters of this technology and are not in shape to buy it in 2009.
Other growth opportunities in the telepresence sector include the consumer market and the kinds of public systems offered by the likes of HP and Cisco at hotels. Another driver is the simplified technology, that makes it possible for even technology-averse users to use systems without IT's intervention. Said Schatt:
In many cases, there is just one button to set up a call. It is handled automatically through a concierge system. It is designed for senior management without patience or technology backgrounds. People won't use equipment if it requires IT to come in and set up and manage. They want it to be very simple. The choice today basically is to have concierge services or a Web portal to schedule calls on something that looks like an Outlook calendar.