In the picture

Geir Olsen, Tandberg president, EMEA, tells CommsMEA about Tandberg’s plans for the region, trends in the sector, and the potential benefit of video conferencing.

Tags: Cisco Systems IncorporatedTandberg Middle EastUnited Arab Emirates
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In the picture Tandberg’s EMEA boss Geir Olsen is upbeat about prospects in the region, following growth in 2009 of 30%.
By  Roger Field Published  April 12, 2010 Communications Middle East & Africa Logo

With average global revenue growth of about 12% for the full year 2009, reaching $902.6 million, Norwegian video conferencing specialist Tandberg has by anybody’s reckoning fared the economic downturn well.

But for Geir Olsen, Tandberg’s president for the EMEA region, the results are not entirely surprising, and stem mainly from the need for all types of businesses to cut costs and raise productivity.

“The whole world has been going through a fairly tricky period over the last few quarters. We have been able to maintain growth on a global level and also here in the region. Last year we had growth of about 30% in the Middle East,” he says.

“Companies want to cut costs and be more productive, and just doing business the way they have always done it is no longer an option. They are turning to these kind of technologies to help them be more productive, to save costs and also to help increase efficiency.”

Olsen admits that the recession has hit the company in some ways. Growth in 2009, while strong, was significantly slower than in previous years, and clients are now more demanding and want to know more about the benefits of the systems they are investing money in, and consequently sales take longer. 

But despite this, Olsen believes the video conferencing sector is at an exciting stage of its development, and is poised to go mainstream, not least because ongoing economic problems and relatively high oil prices mean that all types of organisation need to find ways to operate more efficiently.

He points out that in the 1930s, sales of refrigerators boomed, while in the 1980s personal computers started to change business practices.

“In many times, crisis change the way people do things,” he says. “We believe this crisis will help us to drive these technologies much stronger than previously.

“There is also a lot of investment in infrastructure going on at the moment, with operators building up networks and governments strengthening education and healthcare, and our technology can really help in many of those, so we are optimistic about the future,” he adds.

In terms of the sectors that are helping drive growth of the video conferencing industry, Olsen points to development in the public sector including education, medicine and administration. Education is proving particularly strong in parts of the Middle East, for example in Saudi Arabia where there is a demand for video conferencing technology for female education. 

Globally, governments have also been investing in public sector organisations to help stimulate the economy, which has also helped Tandberg, Olsen says.

While Olsen says that there has been strong growth in the higher end immersive telepresence side of the business, he also sees significant potential at the lower end of the sector, from small and medium size organisations that are spread across more than one location.

“We have seen a strong expansion into the higher end, more immersive video and telepresence but also in the lower end and we are looking at mass deployment on the desk top. Companies are now deploying this not only as a meeting room tool but also as a one-to-one tool that you use on a day-to-day basis that you use as your primary communication tool,” he says.

To this end, Tandberg released a new desktop product, called the EX-90, in March. The device, which features enhanced audio and visual quality, also has a touch screen interface and allows users to share files and presentations more easily, and take part in meetings on the larger telepresence systems.

Niche sectors

With cost being an important factor for smaller firms, Tandberg is also looking at different types of business model for deploying its technology, including video as a service, and monthly fees, which make the systems far more affordable. “We are working with our partners to develop more of a managed services approach to address that market. We can deliver high quality video that is secure, and with some innovative business models around it. That is much more important than just price itself,” Olsen says.

Video conferencing technology is also moving into niche sectors such as fashion design and research and development. Tandberg launched a product called T3 Custom Edition in 2009, a customisable version of its higher end T3 product. This has applications in numerous places, from fashion catwalks, research laboratories and universities.

“You really get the benefits of video when you start integrating it into normal business processes, so before video designers were sending samples across the world, and travelling to see products or research, and now they are using video more to be able to do this remotely,” says Olsen. “Once companies start doing that, they will start seeing the value of doing it. They integrate it into their business processes taking down supply cycles, getting time to market quicker and realising some of the benefits.”

With video conferencing applications, from high end telepresence to desk top tools, growing in popularity, the sector is also offering operators an important source of demand for high capacity networks.

Olsen says that Tandberg works through different types of partners, including operators, in each of its markets. “We see an increasing interest from service providers in this space because it is an application that really drives network demand,” he says.

“They have invested heavily in large networks around the world and they want to have applications that people can use on this. Is it very compelling for C-level people in an organisation. Instead of just selling bandwidth you have something that can really drive productivity, so you get the attention at the highest levels in an organisation.”

Cisco acquisition

Following the decision of US networking giant Cisco to make an offer to acquire Tandberg late last year, the proposed deal has been accepted by 91% of Tandberg’s shareholders, and is now waiting for regulatory approval. “We are expecting regulatory approval in the first half of 2010,” Olsen said. “Once we have that – which we are confident we will get – the transaction will close.” While there has been some speculation about how the two companies’ telepresence systems might be combined, Olsen said that the firms’ technologies are “complementary and not overlapping.”

“We cover different needs and we have different segments that we deal in – high-end immersive telepresence, multipurpose room, and the personal space, and we will continue to develop all the product lines we have,” he said. “The power of this relationship is combining what we know about video with Cisco’s strong network capabilities and understanding of implications from a network point of view regarding video. They are interested in collaboration and see video conferencing as an important part of that. I think the combination will help us to innovate more quickly together than we could do on a standalone basis.”

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