Enterprise Networks Asia Article about Video Conferencing, June 1, 2005

Video's days

June 1, 2005
By: Geoff Long
Enterprise Networks Asia

For years now video conferencing was tipped to be the "next big thing." But the technology is still far from commonplace.

What's not to like? Video conferencing can cut down dramatically on travel costs, allow meetings (ad hoc or planned) across multiple countries or regions, and let businesses communicate visually with far-flung branch offices, partners, suppliers and customers.

But the technology was off-putting. Staff didn't like the sterile environment and formality of a typical video conferencing room, the technology was unreliable and often difficult to use, and enterprise networks often lacked the capacity to deal with video. Expense was a perennial concern. And some staff simply prefer good old-fashioned face-to-face meetings-and the accompanying travel perks.

So what's the current state of enterprises and video communications?

Bring it on

Video conferencing can't arrive quickly enough for Steven P, sales manager for a global textile manufacturing company. He requested anonymity because he's critical of other staff who he says reject video conferencing out-of-hand, because they're scared of losing travel entitlements and they haven't realized that video conferencing has evolved.

"A video conferencing project was analyzed [at our company] and it would have been financially viable, but my colleagues said What are you doing?' In our case it was being boycotted and undermined," he claimed.

Yet his industry could benefit greatly from video conferencing, not just on the cost side but also on the productivity side. "Merchandisers need to give a quotation overnight, but often the instructions aren't clear," explained Steven. "So there's huge demand to communicate on a visual basis and work out the details." The sales manager added that he would also like to use the technology to push commission agents and show them new collections.

However, he says traditional video conferencing is often too formal. "People are too stiff... but if you do it all the time people would get used to it and relax," he said. "If you have to work with different offices regularly, it would be perfect to have a virtual office at a reasonable cost. It would also be a good tool for getting new customers by offering them the opportunity to link up by video conference."

Seasoned user

Mugi Jabre, managing director of Thailand-based video conferencing provider Realcom, has ten years experience as both an integrator and supplier of video conferencing equipment for enterprises and as a video conferencing service provider. In that time he's seen the business grow-but only slowly.

He says that perennial reports of an imminent boom never pan out, although cost savings are apparent. Jabre estimates that, when using a video provider, video conferencing would cost 25 percent compared to a typical one-person business trip from Asia to Europe, and 10 percent for three or more people. Savings would increase significantly for companies investing in their own setup, less depreciation.

Jabre estimates that about 80 percent of video conferencing is done over ISDN lines-a technology generally considered more stable than the newer IP delivery method. The Realcom chief says that the last time he remembers a line cut during a video conferencing session was in 2000.

One event that brought a peak in the business was SARS. April and May of 2003 were two of Realcom's strongest months, although by year's end things reversed as companies were back to using their travel budgets-which had inflated due to the no-travel period.

According to Jabre, many companies have inadequate IP networking infrastructure for video conferencing. While ease-of-use has improved, he suggests that dedicated IT staff are needed for reliability. Companies without a dedicated IP link are asking for trouble-while they may have broadband, they often won't have a unique IP address, making it harder to set up conferences.

"If a company has a fixed data line for something else, then it's worthwhile to add video conferencing," said Jabre, "but in Asia the infrastructure and level of knowledge are often lacking." He added that firms wanting to remain competitive in the future would have to make use of video conferencing.

Moving up

Global telco MCI provides hosted video conferencing and IP connectivity for large enterprises with their own conferencing facilities. Eileen O'Connell, managing director, conferencing and global accounts, MCI Asia Pacific, notes that many enterprises are less prepared for video traffic on their IP networks than expected.

"We launched IP access to video last year," she said, "but found that many companies didn't have their IP infrastructure ready." She added that barriers to entry remain, including the bandwidth-intensive nature of the technology, user expertise, the initial investment costs and the formality aspects of traditional video conferencing. "Formal video conferencing does put people off and the user friendliness hasn't been there, but desktop video will be more accessible," O'Connell said.

However, she sees change on the horizon and suggests that video conferencing from Web-based platforms (with its promise of always-on instant video) will help alter the landscape.

Net conferencing could also cannibalize traditional video conferencing revenues. While video conferencing provides MCI with a consistent stream of revenue and has been growing around 8-9 percent per year, the year-on-year growth for Net conferencing is more in the order of 60 percent, although its base is smaller. Still, O'Connell expects Net conferencing revenues to outstrip video conferencing this year.

She believes that the real-time collaboration offered by Net conferencing, coupled with technologies such as session initiation protocol (SIP) and VoIP, is the forward trend. "MCI believes it's the way to go because we're driving towards real-time collaboration," she noted. "We pasted our colors to the wall early on."

To the desktop

In March, MCI announced that it was working with Microsoft on IP-based solutions for voice, video and document sharing. Its Net Conferencing solution will be powered by Microsoft Office Live Meeting, one of a number of recent partnerships that has seen Microsoft become a major player in the conferencing space.

Peter de Zoete, marketing and sales manager for Microsoft's real time collaboration business unit, Greater China, says that the availability of broadband and higher quality webcams are driving desktop video conferencing. "In the past... setting up connections was not easy and you needed to book a special room and so on," he said. "Now with desktop video conferencing it's much easier and we predict usage will boom."

He suggested that medium and large enterprises would likely set up their own servers but smaller companies would probably rely on hosted solutions, something he thinks more telcos will offer over the next eight to 16 months.

Microsoft also has a joint marketing and development agreement for desktop video conferencing with equipment vendor Polycom. "Video conferencing in the mid-90s or before was a very different experience to that of today," said Jean-Francois Poulain, vice president and managing director, Polycom Asia Pacific. "Expensive, chunky equipment requiring a team of technicians, jittery images with slow frame rates are all ancient history. Today's products are easy-to-use, incorporate high technology, and are available at the desktop or in the conference room with broadcast images similar to that of TV quality," he said.

Polycom's desktop conferencing software-PVX-combines PCs with USB cameras. Poulain claimed this provides the same quality of audio and video as Polycom's group conferencing solutions, including allowing multipoint conferencing and content-sharing at the desktop.

Education and quality

Benny Lee, Asia Pacific president for Tandberg, another conferencing equipment supplier, sees education as key. "The main impediment? User-education and awareness of the simplicity, reliability and quality of video conferencing today," he said. "Many users still have a bad taste in their mouth from the poor quality and poor ease-of-use of previous experiences-it just did not feel 'natural' enough."

Another roadblock is the lack of QoS on many IP networks. Even when network infrastructure is exceptional, Lee sees two additional issues as critical: the lack of conferencing communications between enterprises," he said.

Tandberg's recently introduced Expressway technology is described on the company's Web site as a firewall traversal technology. According to Lee, the solution is simple to deploy and provides a pathway through any firewall with no feature loss-even for IP video in home offices. It also supports UPI dialing, which uses the same naming convention as e-mail, as well as DNS to resolve addressing.

Bright forecasts

A November 2004 report by Wainhouse Research declares that the enterprise videoconferencing industry is back on a growth track after a multi-year slump.

The report says that industry growth-drivers include: continued pressure on the enterprise market to contain costs and drive efficiencies; the availability of integrated conferencing and collaboration tools that make videoconferencing easier to use, the entry into the market of major players such as Microsoft, Avaya, Disco, Oracle, and IBM Lotus; the integration of video with other enterprise desktop software; and new high performance algorithms that deliver superior audio-video quality.

"We're finally beginning to see some traction in running rich media conferencing and collaboration over IP networks," said Andrew Davis, managing partner at Wainhouse Research. "The fear of running real-time communications over the enterprise LAN is beginning to dissipate at the same time that web conferencing and instant messaging are changing the rich media conferencing paradigm.

"The bottom line is that the products and services have improved continuously and are now able to overcome the behavioral and psychological issues associated with video to the enterprise desktop," said Davis.

It forecasts industry factory revenues for hardware-based personal systems growing from about US$21 million in 2003 to almost $180 million in 2008.

Of course we've had heady predictions for video conferencing in the past, but perhaps the days of visual communication and collaboration really are near.

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