The rise, fall and redemption of videoconferencing
07/28/2003 08:02 AM
By: Todd Luttinger
Recent world events—from terrorism to SARS to the sluggish economy—have
led businesses back to videoconferencing. Organizations of all sizes are
turning to videoconferencing as a way to reduce costs and avoid business
travel. As these organizations embrace and in many cases re-embrace videoconferencing
they are finding it far more cost effective, reliable and useful—far
different from the initial impression of videoconferencing a decade ago.
In the earliest days of the Internet euphoria, videoconferencing was touted
as a technology that would fundamentally change the way business was conducted.
Videoconferencing would reduce costs, increase productivity and improve
the quality of life for employees. But the promise of the technology far
exceeded the reality. The equipment was expensive, difficult to install
and operate and the quality was what could be generously described as
“spotty.”
Vendors like PictureTel were manufacturing proprietary equipment that
still cost between $40-50,000 for a standard system. Installing a full-blown
conference room could cost upwards of a quarter million dollars. These
proprietary systems were not only expensive but difficult to operate.
Conducting a videoconference became more about running the technology
then having a meeting! Videoconferencing was supposed to bring efficiencies
and increase productivity but in reality became very frustrating and time
consuming. The average user could not initiate a conference and had to
rely on an IT professional.
Another major problem was the quality of the video. The systems could
often not effectively handle the inconsistencies of ISDN transmission
and as a result conferences were often lost in mid-meeting. This was very
frustrating to users and proved to be a significant roadblock to widespread
videoconference acceptance.
Expensive, difficult to use proprietary systems with poor quality were
not exactly a recipe for success. Many companies that made large capital
investments in videoconferencing equipment were left disappointed. By
the late 1990s many were turning to web and phone conferencing for simplicity,
better reliability and lower cost. This could have been the end of the
road for videoconferencing. Most technologies that fail to satisfy customers
on so many levels never get a second chance.
Ironically, it was at this time when videoconferencing technology began
to change for the better. A newcomer, Polycom, entered the market and
created a new space, “appliance-based” videoconferencing systems.
A quality videoconferencing system from Polycom sold for under $10,000.
As a result the leading vendors at the time saw their business start to
drop. This loss of business and lower average sales prices forced them
to restructure and eliminate much of their large direct sales and support
staff. After a period of consolidation, equipment vendors moved to a reseller
model, now relying on quality integrator and reseller support organizations,
as they focused almost exclusively on manufacturing.
This was the turning point when the videoconferencing industry began to
address its deficiencies in earnest. In short order, the hardware and
software improved dramatically, especially the algorithms that control
video and audio quality. A videoconference using ISDN lines is far more
reliable today than on the earlier generation of equipment. It is also
much cheaper. A coast-to-coast conference could cost hundreds of dollars
per hour in the mid-1990’s, today the same conference would have
much higher audio and video quality at a fraction of the cost.
Manufacturers also learned that they had to make the products easier for
the average worker to operate while at the same time incorporating features
that would emulate “real life” meetings. They moved further
away from proprietary systems to standards-based equipment and began to
incorporate PC functionality. This new “media-conferencing”
approach enabled the use of PowerPoint and other desktop applications
typically used in a meeting environment to now be available in a videoconference.
This added functionality together with easier to use systems has made
the need for dedicated IT resources rare.
Videoconferencing has been further enhanced by new services such as Video-
over-IP networks. Video-over-IP is taking hold because of competitive
pricing, superior quality and reliability. According to Wainhouse Research,
most companies using ISDN are happy with a 92-94% success rate while those
using video-over-IP often achieve a greater than 99% success rate. Another
key benefit of IP videoconferencing is that you can use the existing data
network as the means of transport. This is known as “converged networking”
and can lead to dramatic cost savings and efficiency improvements because
only one network is deployed and managed.
All aspects of the customer experience have been transformed since the
mid-1990s. The products are much less expensive, easier to operate and
provide far better audio and video quality. All of these improvements
come at a time when outside events such as travel concerns and economic
weakness are driving people back to videoconferencing.
This time the industry is mature enough to handle the attention. According
to Wainhouse Research, the global conferencing market is estimated to
grow at a compound annual rate of 22% between 2001 and 2006 to $9.8 billion.
The ultimate driver of this growth will not be travel concerns or economic
weakness but rather the improved experience for the end user.
Videoconferencing is finally delivering on its promise to reduce costs,
increase productivity and improve the quality of life for employees.
Todd Luttinger is co-founder and principal partner at Videré Conferencing.
Videré Conferencing is a provider of video, audio and web conferencing
solutions
About Videré Conferencing
Videré Conferencing, Inc. of Braintree, MA specializes in audio,
video and Web conferencing and collaboration solutions for the commercial,
education, health care and state government markets. Videré’s
expertise includes consultation, design, sales, implementation and support
of the leading remote meeting and distance learning technologies. The
founders of Videré — Todd Luttinger, Bill Benoit and Steve
Cogliano — have over 35 years of collective experience in conferencing
systems design, sales, implementation and support.
