Will Cisco and Tandberg Fix What Videoconferencing Is Still Lacking?

Rob Enderle

Down markets often create massive companies. Cisco wasn't exactly tiny as we entered this downturn, however, it is suddenly much larger, having picked up Tandberg, one of the oldest and largest videoconferencing vendors in the world and the one partnered with HP. In communications, Cisco is playing hardball with the traditional telecommunications vendors as exemplified by an ailing Lucent, sickly Nortel, and few others that even remain interesting. I spent some time with Andy Grove a few weeks ago (great video on this which emphasizes my last post on the economy and will likely scare you as it did me) and recalled that one of the areas he used to believe was his worst failure was videoconferencing. Since I covered that failure, actually participated in or read some of the largest studies on this technology, and recently started noticing a competing technology, one that is quite different and driven by Polycom (another company that at one time cornered the videoconferencing market), I thought it might be fun to explore this.


The Historic Promise and Problems with Videoconferencing


Videoconferencing is a communications technology. But unlike the phone, which replaced the telegraph, and e-mail, which replaced the fax, videoconferencing seeks to replace transportation. To do that, it has to emulate a face-to-face meeting, including all the visual and audible cues. The core problem comes from what people don't think about, which is that a meeting is typically only one part of an interaction that generally includes social events, dinners, hall conversations and the ability to make side comments.


The key benefit is the massive reduction or elimination of travel time and costs for the company and the individual. When used heavily, the cost savings for a good videoconferencing system can generally provide a recovery on the initial investment in the first year with bottom line improvements, through cost reductions, increasing in the following years.


Policy, Not Technology, Is Key to Success


Regardless of whether the system is very high quality or low, if the policy requiring its use is enforced, the benefits result. If it isn't, they don't. Any organization that can't restrict travel expenses shouldn't expect to see a return on any videoconferencing system. The other problem is that often the cost of a videoconferencing system hits a company at an organizational level but the benefits hit line organizations' bottom lines. If the line manager doesn't feel the videoconferencing solution is worth it, they won't use it and, if they do, they get the benefit and the purchasing organization gets the cost. This is not a good for either selling the systems or for ensuring their use. These systems have been in use since the '80s and the airlines, while hardly at their peak, have been hurt by other things.


Fixing the Force Problem


With a few exceptions, we didn't have to force employees to use PCs, cell phones, cars, phones, printers, copy machines, or most other forms of technology. But we do have to force them with videoconferencing systems. Given a choice, employees would rather attend the remote meeting. Even if they have to fill out expense reports, get on planes, and get away from their families (granted, for some this last is actually a perk). The missing link is that these systems need to improve on meetings, not simply be a travel-saving alternative. Another technology is suddenly looking a bit more compelling.


A Better Solution? Polycom CX5000


I used to see this device, initially created by Microsoft, in Microsoft conference rooms but rarely in use. Now, I have recently been in several meetings where it has been in use. The device, rather than trying to replace air travel, tries to improve on in-room conference calls and it is actually rather impressive in use. Because it improves on something rather than trying to replace in-person meetings, it appears more natural. And since it uses the Microsoft Live meeting service, also commonly used for meetings and in competition with Cisco's WebEx, usage isn't seen as excessively difficult either.


The experience is like a Live or WebEx meeting, where you can actually see the remote participants and they can see the people who are talking. Done right, it is actually a more natural-feeling experience than a typical videoconference is because it feels more like a meeting with people sitting around a table and folks don't have to go to special rooms.


At $4,300, this is an expensive speakerphone, but against a typical high-end videoconferencing system, this is dirt cheap. It can be easily added to rooms with a good Ethernet feed. In short, enhanced Web conferencing may do what videoconferencing never did and actually make video a standard part of future meetings.


Future Fix-Applied GPU Computing?


I spent today at the Nvidia GPU Technology Conference and one of the things that came up during my panel was the use of this technology to address the conference room problem. The experts on my panel, who came from a variety of disciplines and companies, imagined the creation of virtual conference rooms that would be more like the real thing, allowing for side conversations and social interaction that is currently lacking in most conference room solutions. The sense was that this was likely a number of years away but demonstrations blending the real and the virtual using shipping products were all over the event, which implied it isn't a technology creation problem but one of waiting until someone applied the technology to this problem. Under conditions like this, things tend to happen rather fast.


Wrapping Up: Rethinking Videoconferencing


The lesson in this market is that solutions need to improve on the status quo, not just provide a cheaper alternative. If this were not true, we'd all be driving motorcycles and not cars because motorcycles are vastly cheaper. It is interesting to note that the last time there was an effort to consolidate the market, it was done by Polycom. It also has the most interesting alternative in the market but likely doesn't market it heavily for fear of cannibalizing its legacy videoconferencing products. There is no doubt in my mind that eventually someone will get this right. In the meantime, check out the Polycom CX5000 and ponder that Cisco likely would have been better off buying that company than Tandberg.

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