Video Conferencing Grounds Travelers, Yields Sky-High Savings


In a contest to find the technology with the most obvious appeal in these recessionary times, I think video conferencing would win, hands down.


Check out the numbers in a SiliconValley.com story about the growing popularity of video conferencing among tech companies. Cisco says it trimmed its annual travel budget from $750 million to $240 million and HP reports a 30 percent drop in travel costs, with both crediting video conferencing for the savings. Of course, as the article points out, both companies have a vested interest in promoting video conferencing since they sell expensive, high-end conferencing systems. But still, I don't think they'd use the systems if they weren't saving them money.


Even when flush times return, Cisco says it'll cap its travel budget at $350 million. It has deployed 530 of its TelePresence rooms for 66,000 employees across the globe. In the past three years, it's conducted more than 350,000 meetings via the technology, 68,000 of which were substitutes for travel.


Those are the kinds of numbers that get the attention of CFOs and other business executives. Maybe that's why v<strong>ideo conferencing got such a warm reception</strong> in a Robert Half Technology survey from last summer. Thirty-four percent of CIOs said they already used video conferencing and another 18 percent planned to adopt it in the next five years. (I suspect the "intend to adopt" number would be even higher now.)


The SiliconValley.com article quotes aviation industry analyst Michael Boyd, who calls video conferencing the "wave of the future." He predicts it will "slow business travel as the economy comes back."


I assume companies installing Cisco's TelePresence system, which costs $34,000 to $340,0000, and HP's Halo, which costs $120,000 to $349,000 plus additional monthly service fees, will need to keep using them to get a compelling ROI. But even companies using the kinds of less expensive telepresence systems that IT Business Edge's Carl Weinschenk wrote about last spring may decide they like keeping employees closer to home and giving them a break from trying travel schedules.


For those of us not ensconced in first class, flying the skies has become an increasingly unfriendly activity. How many productive hours are lost shuttling to and from airports, waiting there for delayed flights and trying to get some work done on laptops balanced precariously on a tray table? Good luck getting decent customer service from the airlines. Referring to heavy travel schedules, an AMD executive interviewed in the story says:

It just tears you up. When I go to my (Austin-based) CEO and say, 'I need you to meet with HP's (CE0) Mark Hurd,' the first thing out of his mouth will be, "Hey, can we do a Halo? Do I have to fly?'"

Uptake is bound to increase as vendors work to reduce the upfront costs of their systems. As I wrote in October (and the SiliconValley.com article mentions as well) both Cisco and HP are partnering with hotel chains like Marriott to install their systems at those properties where companies can rent them by the hour. And Carl noted in April that managed services proivders are expanding their telepresence offerings. It's especially well suited to this approach, writes Carl, because "it is a complex field and the gear is very expensive."


Business meetings aren't the only cost-saving application for video conferencing. When I interviewed Tony Lucich, chief information security officer and enterprise architect for California's County of Orange, earlier this year, he told me the county was rolling out video conferencing to cut down on costly trips to the courthouse for prisoner arraignments. Without the video conferencing, officials would need to add more prisoner holding areas and deputies at the courthouse and more vehicles to get prisoners there.