By Dawn Bushaus
Telephony Magazine

Late arrivals and missed connections could be a thing of the past if telepresence continues to gain popularity among high-flying executives

Marthin De Beer, the senior executive in charge of Cisco Systems' telepresence video technology, may have overlooked one tiny detail when he decided in 2006 to drink the company Kool-Aid and begin meeting whenever possible with colleagues and customers via telepresence, the next generation of high-definition videoconferencing.

Late last year, it began to occur to De Beer, who has racked up 2 million frequent-flyer miles on American Airlines, that he might have to relinquish his coveted Platinum Member status with the airline because he had managed to reduce his travel by two-thirds in 2007.





"Back in December I looked at my wife and I said, 'Honey, you know what, we're going to lose our platinum status this year.' I hadn't thought about this, but the upgrades won't be as easy now," De Beer said with a laugh. Sure enough, a week later he received a letter from American informing him that, indeed, he had not traveled enough miles in 2007; however, he was being granted Platinum Member status for life because of the 2 million miles he had already banked. Thank goodness for small mercies.

De Beer, senior vice president of Cisco's emerging technology group, and the rest of Cisco's management team, including Chairman and CEO John Chambers, are on a mission to make sure that they aren't the only corporate executives faced with losing preferred status on airlines. During the past year, Chambers and company have fast-tracked telepresence to the top of Cisco's priority list, upgrading the corporate backbone by 435% in the past nine months to accommodate traffic among more than 175 of its own telepresence rooms. "We now have OC-12 backbone connections between all of our major geographies," De Beer said. "That is purely driven by telepresence. At least 60% of our WAN traffic today is telepresence traffic."

Cisco's aggressive commitment to telepresence is one of the things breathing new life into videoconferencing, which has languished for years with a reputation for being clunky, unreliable and generally not as appealing to executives as global travel. The other major influence is the growing corporate concern over climate change. Airline travel has perhaps the fattest global footprint on the planet - a round-trip flight from Chicago to London releases 1.459 tons of carbon dioxide gas into the upper atmosphere, per passenger.

"There is a global focus on corporate social responsibility," said Steve Masters, head of global convergence propositions for BT. "The arguments of the past about executives enjoying international travel are wearing thin. What we are seeing is a massive mind-set change that starts at the top. I don't know any large corporate customer who isn't concerned about this."

The availability of relatively cheap bandwidth, the need to reduce travel costs and increase productivity, the more global economy, security concerns, and even the hassle that much commercial air travel has become also are factors in an increased interest in travel alternatives.

The companies that may stand to gain from this renewed interest in video communications are network operators and service providers because telepresence promises not only to drive bandwidth sales, but also to open a new market for managed services that can be wrapped around the technology.

"This is really a big opportunity for the service providers," said Dominic Dodd, principal analyst of conferencing and collaboration for Europe with Frost & Sullivan. "Telepresence is the classic killer application in terms of its ability to use the network."

Last year Frost & Sullivan projected that the global market for telepresence would hit $145 million, up from just $55 million in 2006. The company also projected a $1.3 billion market for products and services by 2013. "This year I'm even more bullish about the demand and uptake," Dodd said, adding that Frost & Sullivan will issue its new forecast within the next few months.

Cisco's own projections are more aggressive. The company expects the industry to realize $4 billion in revenue for telepresence network services alone between 2007 and 2010. The company believes telepresence will fundamentally change how companies communicate.

"Our legacy videoconferencing equipment was utilized about 6% of the time, whereas with telepresence, we're at a 65% average - and that's just for internal use," De Beer said. "Once you can start using this to connect with customers, partners and suppliers, we think the utilization will jump to close to 100%."

Telepresence is different from traditional videoconferencing, and even high-definition (HD) videoconferencing, because it gives users the illusion that they are meeting together in the same room. "The experience is immersive, not observant," said Howard Lichtman, president of Human Productivity Lab, a research and consulting company dedicated to telepresence.

Telepresence systems typically consist of multiple 50-inch plasma screens, which allow for the display of life-size images. In addition, cameras are carefully positioned to achieve the approximation of eye contact, and audio systems provide for surround sound. Finally, all of the technology is hidden so that the room appears to be a typical conference room. Some telepresence meeting participants have reported experiences so lifelike that they have tried to extend a hand for a handshake at the end of a meeting only to remember that they are not, in fact, in the same room.

Besides improving the quality of the visual experience, telepresence also is easier to use than traditional video systems. Most telepresence systems are designed to make initiating a conference as easy as dialing a phone. A managed service can take the headaches away entirely by providing a concierge service that lets users simply make reservations for a telepresence session.

Telepresence also allows for better collaboration opportunities than traditional videoconferencing. Telepresence rooms provide additional screens displayed above or below the plasma row or configured as pop-up screens on the conference table. To share documents or link to the Internet during a telepresence call, users just plug a laptop into a connection at the conference table.

Telepresence technology isn't new. Back in the mid-1990s, TeleSuite, which became Destiny Conferencing and was purchased in 2005 by videoconferencing heavyweight Polycom, came up with the idea. But it was another vendor, Teliris, that launched the first commercial service in 2001. In 2005, HP gave the market a boost with the launch of its Halo service, which originally was designed in conjunction with Dreamworks for Hollywood execs to use in filmmaking. It was HP's entry into the market that caused Cisco to sit up and take notice of the technology's potential.

Today industry-watchers view Cisco, HP, Polycom, Teliris and videoconferencing vendor Tandberg as the top telepresence technology competitors. All of the vendors' high-end products include an entire room installation that amounts to screens, codecs, cameras, microphones, sound systems, furniture and in some cases walls. HP and Teliris also require customers to buy managed services on their private networks, while Cisco, Polycom and Tandberg partner with network operators and managed service providers (MSPs). Analysts also are watching LifeSize and Telanetix, which have entered the market with lower-cost products aimed at getting telepresence to the masses. Their solutions aren't as all-encompassing, allowing the customer to design and furnish the room.

Despite the entry of companies such as LifeSize and Telanetix, telepresence technology so far has been aimed almost exclusively at C-level executives within the Fortune 500, and for good reason: The technology is downright expensive. A typical room installation costs about $250,000, and that doesn't include the network charges for a service that is a true bandwidth hog. HP, for example, requires a DS-3 connection for every room with a monthly price tag of $18,000 per site.

"This is technology for the country club jet set," said Ira Weinstein, senior analyst and partner for Wainhouse Research, a research and consulting company focused on unified communications.

Robin Gareiss, executive vice president and senior founding partner of Nemertes Research, an independent research firm that specializes in quantifying the business impact of technology, agreed. "I hesitate to call it the killer application for the network until the prices come down," she said.

But the fact that the technology is aimed at the corporate elite makes it a perfect candidate for managed services, Weinstein said: "Managed telepresence services provide massive value because for these kinds of sessions, it has to be perfect." In other words, CEOs are not forgiving when the technology doesn't work.

Managed services can make the telepresence experience nearly fool-proof by handling everything from designing
the room and installing the gear to contracting for network services and providing concierge services to set up a company's individual telepresence sessions and monitor them for problems.

While Wainhouse Research stops short of including a managed service in the definition of telepresence, Frost & Sullivan's Dodd argues that it is the managed services wrapper that makes telepresence different from videoconferencing and gives it more of a chance for long-term success.

Overall, the goal is for CEOs to get so comfortable with telepresence that they become anxious to find ways to push the technology down to the masses. Dodd, Gareiss and Weinstein agree that telepresence adoption will drive additional corporate spending on HD and even standard-definition conferencing systems.

Companies providing managed telepresence services range from the vendors themselves (HP and Teliris) to large network operators such as BT and specialty service providers such as Nortel Global Services and iFormata, a spin-off of Destiny Conferencing.

HP and Teliris require customers to purchase managed services in conjunction with the equipment because they believe the service element is crucial for ease of use and for interconnecting companies in business-to-business applications. To ensure quality, HP insists that every telepresence connection on its network be a dedicated DS-3 circuit, whereas most vendors and many service providers believe that MPLS with quality of service (QOS) parameters is sufficient for the telepresence experience, allowing customers to get the most out of their existing network facilities.

"MPLS works well for data, but not for video," said Mark Gorzynski, Halo chief for HP. "It's a wonderful technology, but when you need low packet loss, it has a bit of a problem. If we could save money by using MPLS, we would."

Not surprisingly, the folks at Cisco disagree with Gorzynski, and so does Simon Farr, head of marketing convergence for BT Global Services. BT has been using MPLS to deliver a Cisco TelePresence service for about a year. "We've actually engineered a class of service into our MPLS backbone at the access level that is there specifically for Cisco TelePresence," Farr said. "We can guarantee the application performance end to end."

Other network operators such as AT&T, Orange Business Services, Sprint, Telus and Verizon Business also are working with Cisco on telepresence services, although not all of the companies are providing managed services yet. Verizon Business, for example, resells and installs the Cisco TelePresence gear and provides network connectivity but leaves management up to the customer.

"We're looking at whether customers need us to help manage it," said Roberta Mackintosh, executive director of product marketing for Verizon Business. "Right now it's a toss up as to whether they want that."

Nemertes' Gareiss said her research shows room for both a managed services and company-owned approach to

telepresence. "If a company has an MPLS network up and running and has some significant capacity, they can carve out bandwidth at a top QOS level and run telepresence over the network," she said. "Other companies decide that because telepresence is such a bandwidth-intensive application and because they don't want to risk something going wrong, they'll use a third party so that they can hold that third party liable. I really don't see one taking off over the other. They're both good options."

What may come before a managed service at Verizon Business is a service that links telepresence systems with traditional videoconferencing systems, Mackintosh said. "I think customers are going to want to connect with sites that don't have immersive solutions," she said.

Industry watchers agree that adoption of telepresence technology will cause a ripple effect because as a company's top executives become comfortable with the technology, they will want to extend it deeper into the organization. They won't want to spend $250,000 for every room, however, so they will turn to HD videoconferencing and even desktop conferencing for their employees.

BT has seen that happen already. While so far only BT's largest customers have been interested in telepresence, some of those companies are beginning to consider deploying Cisco's single-screen product at smaller locations, Farr said. "That's pushing the units shipped from the tens to the hundreds," he said, "and it is a good indicator that organizations are understanding the capabilities that telepresence gives them."

Cisco has developed certification programs that its resellers and service provider partners must complete before they can resell the company's gear. The Cisco TelePresence Connection Certification is a rigorous testing procedure designed to ensure that a service provider meets certain standards for MPLS virtual private network architecture, service level agreements and management systems. Another service provider certification program will be added for network operators who want to offer a telepresence exchange service for business-to-business applications, De Beer says.

Analysts, vendors and service providers alike agree that allowing for business-to-business applications is crucial to the success of telepresence. HP and Teliris use their networks as a selling point for companies looking to interconnect with customers or suppliers. And that isn't lost on Cisco.

Cisco has been working with AT&T and BT on telepresence trials. "Some of our big customers like Procter & Gamble and Wal-Mart are starting to make calls between locations in a trial mode," De Beer says. "The plan is to have a commercial intercompany telepresence service available by June that our enterprise customers can purchase from AT&T and BT."

Network operators aren't the only service providers who stand to gain if telepresence takes off. A group of MSPs focused on video communications also wants to carve out a piece of the telepresence pie for themselves.

Nortel Global Services is making a big push into managed telepresence services in the hopes that it might help turn things around for the struggling Nortel parent company, which recently posted a wider-than-expected loss and announced layoffs. Nortel Global Services resells Polycom and Tandberg telepresence systems today and manages them from a global network of eight video network operations centers (VNOCs).

Nortel is not building its own dedicated network like HP and Teliris, rather it will partner with network operators worldwide and focus on delivering concierge and management services, said Dietmar Wendt, president of Nortel Global Services. For example, Nortel is working on a deal now to private label a managed telepresence service with a network operator in Asia, he said.

Other MSPs to watch in the telepresence space include iFormata, Wire One Communications and York Telecom. Wire One and York Telecom are both videoconferencing MSPs that are moving upstream to tackle telepresence management, while iFormata has a long history in telepresence.


Founded by father-and-son team David and Scott Allen, who also founded TeleSuite, iFormata has VNOCs co-located in telco hotels in Ohio, Virginia and Norway with one under construction in India. Because of its history, iFormata has a strong partnership with Polycom, but the company also is working with Cisco to become certified to provide its products, said Scott Allen, CEO of iFormata. The company recently began offering intercompany connectivity among its customers, and Allen sees a lot of potential for business-to-business applications going forward. "I expect that service to be quite successful a year from now," he said.

Only time will tell whether telepresence technology can fulfill the decades-old promise of videoconferencing. But with heavyweights such as Cisco and HP putting money and marketing prowess behind the technology and large global corporations aggressively looking for ways to reduce their travel budgets and carbon footprints, it appears that video's stars might finally be aligned.

GOING GREEN SAVES GREEN

The promise of telepresence technology has the communications industry seeing green in more ways than one.

Of course, vendors and network operators are excited to see the greenbacks pouring in from the sale of bandwidth-intensive systems that cost upwards of a quarter-million dollars per location. But technology providers and their customers also are seeing a more altruistic shade of green: Telepresence technology can help companies save millions on travel, which translates to a worldwide reduction in carbon emissions.

Cisco Systems is not only selling telepresence systems, it's using them. In 2007, the company saved $70 million on travel-related expenses using telepresence, says Marthin De Beer, senior vice president of the company's emerging technology group. Cisco realized that savings despite the fact that it had to upgrade a big portion of its network backbone to OC-12.

"For us telepresence has had a nine- to 12-month [return on investment] per room," De Beer said. "That wouldn't have happened if we didn't see the kind of utilization we've seen. But this is making Cisco more green; it's using the network as a platform for communications, and it's making people a lot more productive."

Robin Gareiss, executive vice president and senior founding partner of Nemertes Research, an independent research firm that specializes in quantifying the business impact of technology, said some of her clients are seeing huge returns from implementing telepresence, even at a steeper price tag. "When telepresence first came out, a large financial services company we were working with installed 10 rooms at $500,000 each," Gareiss said. "They were able to see an ROI of less than a year just based on how much money their executive team was spending traveling globally."

Several vendors and some service providers have begun providing carbon footprint calculators to help customers figure out how much their travel savings can mean in terms of a reduction in carbon dioxide emissions. Videoconferencing vendor Tandberg sponsors a Web site at www.seegreennow.com that offers such a calculator and outlines ideas for how to reduce emissions.

"Two years ago in the U.S., 'green' wasn't a discussion point," said Rick Snyder, president of the Americas for
Tandberg. "Today for any major U.S. company, green is a top-five concern in choosing
 products."

Some European countries have enacted strict carbon-emission regulations, so the idea of using technology to reduce the carbon footprint there isn't new. Many companies now participate in carbon reduction networks, which allow them to "sell" their carbon savings to companies that need to post reductions.

BT has begun a consulting practice devoted to helping companies determine how they can reduce carbon emissions through a variety of measures, including using conferencing services and reducing energy consumption in data centers. The telco has reduced its own carbon emissions in the U.K. by 60% since 1996, said Kevin Moss, head of corporate responsibility operations for BT. "We feel very strongly that the carbon footprint reduction we've achieved has been important for improving shareholder stakes as well," Moss said.

MANY VENDORS, MANY OPTIONS

Cisco has been a large part of the reason telepresence has garnered attention, based on its brand and marketing prowess. To avoid stepping on its service provider customers' toes, Cisco has opted not to build a managed service, relying instead on deals with network operators and MSPs. Analysts agree that Cisco needs to expand its product line to reach beyond the C-level of most corporations.

HP worked with Dreamworks to create Halo after the Sept. 11 attacks as a way for filmmakers to avoid travel. HP launched Halo as a fully managed service in 2005. HP owns its own network, which means Halo customers can interconnect with each other for business-to-business applications. Halo is arguably the most expensive among the telepresence solutions, but analysts say it provides one of the best experiences.

Polycom bought telepresence technology in 2005 with its acquisition of Destiny Conferencing. The RPX product line is unique in that it is a pre-fabricated room complete with screens, furniture, lighting, walls, floor and ceiling - all installed in an existing conference space. In addition to the telepresence product line, the company offers a wide range of HD and SD conferencing solutions down to the desktop. Polycom's go-to-market strategy is to work with a wide range of resellers and service providers. Its alliance with Nortel helps it compete head to head with Cisco.

Tandberg, like Polycom, has a history as a videoconferencing vendor. The company's MXP product line provides comparable HD videoconferencing at a much lower price than telepresence systems. Tandberg also focuses heavily on standards so that its equipment can interoperate with other standards-based gear. Tandberg is even working with rival HP to make its Halo solution interoperate with traditional video systems.

LifeSize was founded by former Polycom executives and now is moving up-market with its telepresence offering. The company is trying to deliver a customizable, lower-cost solution, which is why it does not include furniture or screens with the system. LifeSize also manufactures its own codec, which makes its approach less expensive. Analysts like the company's product and its minimalist approach because it offers an alternative for businesses that can't afford pricey telepresence suites. But they caution that the overall experience can vary widely without strict design guidelines.

Telanetix, like Lifesize, offers a lower-cost solution. Its gear uses the company's own software-based codecs, which help keep costs down. It also offers a telepresence kit for $45,000 that does not include screens. As with LifeSize, analysts like Telanetix's "roll-your-own" approach, but worry about the quality of experience.


Teliris, which launched its service back in 2001, is a telepresence veteran. Like HP, it provides a fully managed service over a privately owned network. Analysts say the Teliris experience is good because camera positioning provides approximation of eye contact. The company also gets high marks for the way it interconnects multiple sites in a conference. The biggest challenge for Teliris lies in getting noticed while bigger competitors pull out the stops to make sure they own the market.

[via  Telephony Online]


Telepresence Briefs





Last week the Lab launched a networking group for Telepresence Industry Professionals on the business networking site: Linked In. 

The goal of this group is to help members:

Reach other members of Telepresence Professionals
 
Accelerate careers/business through referrals from Telepresence Professionals Group members
 
Know more than a name - view rich professional profiles from fellow Telepresence Professionals Group members

If you are already "Linked In" then you can join by hitting this link:
 http://www.linkedin.com/e/gis/76977/3745DE1F46C0

Our friends at the IMCCA launched a similar group today but for the record we are the original!