Video Conferencing the Best or Worst Return on Investment You'll Likely Ever Get

Rob Enderle

I've been covering video conferencing for several decades and it has often fascinated me how some companies get a massive return on investment from their systems while others have what amounts to a wasted room full of expensive, unused hardware. With the new high-definition products coming to market, let's do a quick overview of the offerings and why some pay off and others don't.


A Little History


Video-conferencing systems have been around since the '80s. At first they required a leased line or satellite service and a trained technician to get the thing to actually work. Latency was horrible, but as long as you were in presentation mode -- which is often the case during a presentation -- they weren't that bad. However, if you wanted to have a collaborative meeting, the latency could drive you nuts, and these systems, which often cost more than $200,000 in today's dollars, were known to sit around unused.


As networks improved, so did the ability to connect systems, and ISDN allowed any system to call any other system without requiring an expensive dedicated T1. These systems typically came with directories for the calling information of the other systems you could call. There also was a level of interoperability as common standards allowed one vendor system to talk to another. Latency was improved, but it was common to take the voice side of the call out of band, or basically use a regular phone system to handle the voice and if lip sync wasn't right, at least it was better than everyone talking on top of each other.


Video bandwidth was limited, and it wasn't unusual to have cameras that automatically followed speakers because wide-angle shots weren't very useful. My experience with these cameras was mixed. The cameras often would lock in on room light fixtures during a talk, which caused some disruption. Still, as a way to present to groups of people, these systems were usable and, if used, could recover their cost in several months.


High Definition


The market for video conferencing has consolidated and there so many choices anymore. Polycom bought up most of the small independents and has the most complete line of products in the segment, but, the advent of high-definition video conferencing has brought several new players.


At the high end, the amazing HP Halo system arguably provides the richest overall experience. Developed with DreamWorks and used heavily by that studio, it's at least worth a look. It comes with a dedicated network and has the least latency and most consistent resolution of the offerings I've seen. It also is the most expensive, but if used, it still provides a payback that can be measured in months.


A new entry backed by a number of industry insiders called LifeSize comes in at the other end of the scale. This product line ranges from a single-screen product for around $7,000 to a conference-room offering with multiple screens prices at around $34,000. This solution does not require a dedicated network and performance likely will be tied to your network's reliability (when I tried this out, we were getting some packet loss causing the picture to occasionally break up). However, the experience was surprisingly good and the high-definition feed did make it feel more like you were in the same room.


Overall these high-definition systems provide capabilities that the previous systems lacked. They are relatively easy to use, they don't require the problematic motion-tracking cameras, and latency is almost non-existent (though, depending on the system, there may be some latency tied to the compression and decompression of the video stream). You can save a fortune on travel with one of these, but only if people use them.


Video Conferencing Failures and Successes


There are several reasons video conferencing systems haven't provided the return on investment they have promised. The first is that people don't like change and are often tied to frequent-flier benefit programs that provide incentives for travel. The second is that travel expenses drop in to a different bucket, traditionally, than do expenses related to a video-conferencing system. That means one organization often gets the savings while another incurs the cost.


Generally, I have seen a strong return when employees are driven to use the video-conferencing systems and travel savings are reported back and tied to the cost of purchasing and maintaining the video-conferencing system. This requires executive support, because if folks can easily get travel approved for things where the video-conferencing system is more appropriate it likely will languish.


If you don't have the authority or executive backing to require that the system be used instead of travel, or if you can't get credit for the savings, but will be charged for the hardware and upkeep, then you probably won't be happy with the result. If you can, however, get the authority or backing to change the behavior and can get credit for the savings, then the ROI (depending on how much traveling you do between offices) can be amazing.


There is a secondary benefit. People are not very productive on planes and these systems allow more people to actually be working more of the time (and it is this productivity loss, which we don't measure, that is the extra hidden cost of lots of travel). And, with a video-conferencing system, there are no missed connections, lost luggage, airborne in-plane viruses or long lines to the terminals.


Wrapping Up


Technology, to a large extent, often takes more of our free time than it gives back. Video conferencing is one of the few that, when used properly, gives back time and has offers more consistent collaboration. There is a set of best practices that, should you decide to go down this path, is worth reading to get the most out of this technology.


In any case, it is worth checking out one of these new high-definition video-conferencing systems just to get a sense for where this technology is.

Add Comment      Leave a comment on this blog post
Oct 26, 2007 4:16 AM Borokinni Olubunmi Borokinni Olubunmi  says:
HiYour comments on the use of video conferencing are commendable. My comments are on the human factors and office politics that often impede the use of Video Con. technology. One, people see traveling to attend a meeting/course as a reward for a loyal subordinate, Human interaction in the classroom setting, bandwidth problems, power outage and resistance to change make VC uninspiring. On the other side, traveling for six hours to attend a two-hour lecture is a colossal waste in terms of man hour, what of the danger/hazards of being on those dangerous roads, leaving your official job schedules for a week and others. Weighing all these, the right path is that of technology. Management must be made aware of all these, to gain their support. This is very important. Reply
Nov 7, 2007 6:04 AM maslakha dan yuli rokhmawati maslakha dan yuli rokhmawati  says:
selamat sore pa. . . saya absen, maslakha dan yuli rokhmawati, terimakasih Reply
Jan 5, 2008 6:16 AM mark mark  says:
Sure wish people would stop mixing the terms HD and Telepresence as they are not the same at all. HD can be purchased for under $10,000 with top line room systems easily installed for around $25,000.So make sure you are evaluating HD and not Telepresence which is a lot more expensive! Reply
Jun 11, 2008 3:23 AM John Burke John Burke  says:
I wanted to write in and let you know I am client of MegaMeeting. They are completely browser based and they allow up to 16 videos up at one time in each room. You can even have multiple rooms at the same time, which is great for educational or business type needs. I have been using them from about 6 months and found their customer support is amazing and they will even train you on how to use the system which makes it easy and fun to use. I would suggest you check them out if you need video conferencing for anything. My rep is Matt McClure and he has done great in making this simple and easy.MegaMeetingEnjoy!John Burke Reply
Nov 19, 2008 7:43 AM dan dan  says:
Hi Rob,i enjoyed your blog post.I guess the big challenge with investing in VC is actually having auditable low effort way to calculate and report on return on investment (i.e. travel cost savings, man-hour savings, carbon emission savings).This something we are helping our clients with at the moment as part of our FlyLess program would be keen to hear your comments on this.Best regardsDan Reply
Aug 9, 2013 12:34 AM Ismail Akinci Ismail Akinci  says:
Travelling for six hours to attend a two-hour lecture is a colossal waste in terms of man hour...could not be stated any better, Borokinni. I really like that. I have absolutely no doubt thatvideo conferencing will soon find its place at the core of business. Reply

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