After the launch of Cisco's Telepresence solution nearly two weeks ago, more specific details are beginning to emerge on the direction and degree to which telepresence will be implemented as part of their core business model and the ramifications that will have on the entire industry as a whole.

Last week in VOIP Magazine, Annie Lindstrom covered the launch with some additional insight into the specifics involved:

Cisco estimates that there is a [USD]$4 billion revenue opportunity for service providers based on network and bandwidth upgrades related to TelePresence, and additional services that are 'pulled though' as a result, between now and 2009.

The [Cisco Telepresence] services road map includes service provider hosted-service; managed end-point, reporting and scheduling services; virtual concierge; and multipoint connections.

From this information, we can see that Cisco is positioning telepresence as an appetizer to the main revenue course of managed services covering the full IT spectrum. Increased bandwidth needs and a new array of services will come online to meet the demands of telepresence. In Cisco's own house, the technology has been mandated to reduce the travel costs for the company:

Cisco will be busy installing 100 TelePresence Meeting systems company wide. Cisco President and CEO John Chambers has directed his employees to use TelePresence Meeting to cut travel expenses by 20%.

In addition to this, only 24 VARs (Value Added Resellers) are going to be authorized as Cisco-certified telepresence solution providers - demonstrating the technical sophistication involved in deployment of such a system versus the traditional 'Where is my IT guy?' ad-hoc, disaster area that usually ensues when traditional videoconferencing meetings take place. Virtual dining and box seating at sports events are also mentioned in the article as possible uses for the technology, further differentiating telepresence from videoconferencing.

We can also preen other useful musings from the traditional stalwarts of corporate information, Gartner. They highlight the fact Cisco is looking at the solution as only one tall money tree in a forest of green:

If overall video demand can increase infrastructure sales by merely 1%, Cisco would gain $136 million in gross profits.

While everything may appear roses, other pundits such as Current Analysis are not able to see opportunities such a solution will provide:

Cisco's advantage of the highest resolution also brings with it a notable drawback; it is bandwidth hog. This and other factors currently restrict TelePresence to support by Cisco-built carrier networks for connection between distributed conference room sites. In addition, the first version of Cisco TelePresence is an intra-company solution only. As a result, the already niche TelePresence demographic of deep-pocketed distributed global organizations shrinks to include only those wishing to conference amongst their own corporate sites.

Because of the high price point of the solution, the need for specialized network assessments, and the potential for sizable (and costly) infrastructure upgrades, the market for high-definition telepresence solutions may very well remain niche for a long time to come.

John's Thoughts and Analysis:


Taken together, these bits of information weave together to form a new tapestry of financial opportunity surrounding the telepresence industry, whether the pundits can see it or not. This is a revolutionary technology but the associated industries that will develop with it in lockstep are even more substantial. Instead of thinking of telepresence as a traditional end-point supply-demand product as Current Analysis sees it, it is much more appropriate to think of the technology as the next big thing.

Much like the automobile was for the rubber, cement and oil industries, telepresence will be the catalyst for communication providers, computer and television manufacturers and IT service companies. Cisco's market leadership in other industries and their recent activities in the world of telepresence show us this is just the beginning of something very big.

With the steady increase in business flowing to the Lab, we are further refining our own new website release here for an even more spectacular debut in the very near future...stay tuned. Here is a mini-snapshot (can't spoil the surprise now can I???)