Strong presence

Telepresence technology promises a revolution in corporate communications, but costs may prove prohibitive in the short term.

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By  Administrator Published  January 6, 2009

Telepresence technology promises a revolution in corporate communications, but costs may prove prohibitive in the short term.

While video conferencing has been in use for more than 30 years in one form or another, the latest and most cutting edge version, often referred to as telepresence, has been attracting significant attention over the past few years, particularly after US networking giant Cisco entered the market in 2006 and put the full force of its marketing machine behind the launch.

Telepresence is designed to allow companies to hold face-to-face meetings, usually for up to 12 people, who may be spread across two or more locations. To give the effect of a genuine face-to-face meeting, telepresence relies on large, high definition digital screens to give life size images of participants, surround sound, and matching décor at each site to give the impression that all participants are in the same room.

We see our customers managing travel immediately, in particular with executives traveling business class. With a few nights in a hotel, it mounts up very quickly, so when they model those cost savings, even though it might be millions of dollars, it is quickly paid back. - Steve Leyland

In recent years, telepresence has become a multi-million dollar industry, with the main vendors Tandberg, Polycom and Cisco increasing deployments around the world, while newer entrants including Sony and HP are also vying for a share of the market.

Polycom's vice president for Europe, Middle East and Africa, Steve Leyland, says that researchers are reporting growth in excess of 100% for the company's telepresence system, RealPresence.

"The growth is very healthy for telepresence," he says. "It is still a very small sector but it has grown very fast. We have a number of installations around the world. A key driver of the growth we see is the fact that the technology is hidden to a large extent.

"Being able to walk into a meeting room and see the other participants on the other side of the table as if they were meeting makes for a very natural experience, so the usage tends to be very high, very quickly. So we are seeing very strong growth," he adds.

One of the main drivers for telepresence is the increasing cost of business travel, combined with the cost of lost productivity as key members of staff are away from the office, sometimes for just a few hours worth of meetings.

"The value proposition is so strong right now in terms of companies wanting to operate more efficiently and manage travel. Many companies also want to make a good corporate citizenship statement in terms of carbon footprints, the environment and so on," Leyland says.

Ian Gander, business development manager for emerging markets at Cisco's Telepresence Business Unit, agrees that the sector is being driven by the level of convenience afforded by the technology, which means that people actually want to use it, compared with earlier forms of video conferencing that were awkward to use, and gave a poor user experience. Gander stresses that this is what differentiates the latest breed of telepresence technology from previous incarnations.

Cisco launched its telepresence product in 2006, after examining what customers were looking for in video conferencing technology. "We knew it needed to be easy to use and easy to schedule meetings, and so we designed our telepresence system to provide that capability.

"Now we can sit here across the table from each other. It's nice and comfortable, the rooms look the same, and we feel like we are in the same room, even though we are not."

One potential barrier to the growth of telepresence is the hefty price-tag that accompanies it. A typical telepresence deployment from Polycom or Cisco for two offices starts at about US$500,000. Deployment across multiple sites is likely to cost several million dollars.

But despite this, the leading vendors insist that the return on investment for customers is rapid. "A typical global customer deployment with six, seven or eight units in the main cities of the world will cost several million dollars, but the payback is very quick," Leyland says.

"We see our customers managing travel immediately, in particular executives traveling business class. With a few nights in a hotel, it mounts up very quickly, so when they model those cost savings, even though it might be millions of dollars, it is quickly paid back."

While some customers will no doubt wait far longer than this to see a full return on investment, it can also be quicker, depending on how many sites are covered, and how often the company uses its telepresence system to avoid costly foreign trips and boost productivity. Andy Sanctuary, general manager at Tandberg, says that telepresence appears to be particularly successful in the financial services sector, where financial advisors use the technology to have face-to-face meetings with clients in other countries.

Setting the standard

Despite the rapid growth experienced by the sector and the quality of the leading telepresence products, cost is not the only hurdle to the technology moving into the mainstream. Another major challenge facing the sector is a lack of inter-operability between telepresence suites from the main vendors, which is mostly caused by a lack of compatibility between the protocols and compression methods used by equipment vendors, according to Andrew Hicks, a senior telecoms analyst with IDC-CEMA.

Hicks says that every major vendor is working on interoperability, although he admits the solutions "aren't very mature". Hicks also recently saw a beta demo of interoperability for high definition Polycom and Cisco systems, and while he says they were doing good work it was "obvious that it will take some more time to perfect."

"It's not just the CPE but also the underlying network technology, which has to provide much higher quality of service, lower latency, and things like video and audio trans-coding. It will be a while before standards emerge around these issues," he adds.

Indeed, while the majority of telepresence systems are deployed for internal meetings at the moment, this is likely to change as the technology moves into the mainstream. And this in turn will create a greater demand for telepresence users to have quality meetings with clients or partners using telepresence systems from different vendors.

Tandberg and Polycom's telepresence systems are compatible with each other, but not with Cisco's offering, according to Leyland. Sanctuary confirms that the two systems are interoperable, and that Tandberg can also be used with the telepresence offering from another US vendor, LifeSize.

Meanwhile, Cisco's business development manager, Ian Gander, says his company and other vendors are working together to improve interoperability.

He says: "All of the vendors have difficulty working with each other, but we are working very hard on fixing that so we can inter-operate with other user endpoints."

Another challenge for telepresence meetings using technology from rival vendors is ensuring the availability of the correct bandwidth. Indeed, Hicks points to the need for operators to interconnect their networks reliably in order to be able to transmit the telepresence traffic efficiently across different networks, which would involve work on prioritising telepresence traffic over other types of traffic.

Maximum returns

Certainly, it is important for companies to gain maximum usage from their telepresence technology to gain the best return-on-investment, and telepresence meetings with other companies is one way to boost usage. Indeed, telepresence meetings with potential clients in other countries have the potential to help win business contracts, further contributing to return on investment.

But the potential for meetings with other companies can be limited, given that the price of telepresence technology is beyond the reach of many organisations. Furthermore, where other companies do have telepresence technology, it might be from a rival manufacturer.

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