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AT&T Rolls out Intercompany TelePresence, Cisco hits 500 systems sold with Howard Lichtman's Thoughts and Analysis
Cisco, AT&T Look To Expand High-End Video-Conference System
By Roger Cheng, Dow Jones
NEW YORK - AT&T Inc. (T) will partner with Cisco Systems Inc. (CSCO) to manage Cisco's souped-up video-conferencing system, as the two hope to expand its appeal beyond a niche group.
'It's Cisco's version of a technology that is called "telepresence" because its large high-definition TV screens and custom set-up simulate a face-to-face meeting. Cisco likes it because it can also sell more networking gear to support it. AT&T, meanwhile, is attracted to telepresence because it requires another service that locks in their business customers.
"It does look like we're finally getting to the point where video-conferencing is able to deliver what it promised," said Jan Dawson, an analyst at research firm Ovum, adding that it allows both companies to increase the number of potential customers.
San Jose-based Cisco said it has received its order for its 500th telepresence room, and has a total of 750 rooms out there, including the ones within Cisco itself and those given away. Still, the average price tag of around $200,000 per room and the relative lack of other rooms to communicate with have been tough barriers to overcome.
Enter AT&T. For a customer, the San Antonio telecommunications company will provide the Cisco telepresence equipment and run the service for companies for a lower monthly fee, shouldering the upfront costs and maintenance. The company declined to comment on pricing, saying the figures varied widely depending on the deployment.
More importantly, the carrier will allow every Cisco telepresence room to connect with each other, even if AT&T isn't running the service. Previously, telepresence rooms could only communicate within a company, and couldn't reach out to others.
"Inter-company is the operative word," said Joe Lueckenhoff, senior vice president of product management for AT&T. "It allows companies to talk between themselves now."
It's a big move for Cisco's telepresence product, which played a large part in the networking titan's bid to resonate more with consumers. Its telepresence room was featured on such TV shows as "24."
While still a niche business, telepresence represents Cisco's fastest-growing business ever in emerging technology, according to Marthin De Beer, senior vice president of the emerging tech group.
It's estimated that by 2011 the installed base of video-conferencing rooms will be 144,000, according to Dawson. In comparison, the number of desktop units - using Web cams and existing monitors - will reach 1.5 million, he said.
AT&T hopes to grow the business further by pushing the service onto its own suppliers and customers, increasing the base and inducing a viral interest in telepresence.
"We think by talking to the ecosystem, we can expand the market exponentially," Lueckenhoff said.
Cisco isn't the only company pushing telepresence. Hewlett-Packard Co. (HPQ) offers HALO, the highest-end product; Telanetix Inc. (TNXI) has a cheaper offering. Cisco also plans to roll out a lower-end version to target small and medium businesses.
Eventually, De Beers said, he would like to see all systems work together to further broaden the number of telepresence endpoints.
"It's to everyone's benefit to make all systems communicate," he said. "We realize that even though we would like to, we won't be the sole choice of all customers."
At least Cisco has AT&T. The carrier has 10 telepresence rooms set up. "I don't fly to San Antonio nearly as much anymore," said Lueckenhoff, who is based in New Jersey.
Howard Lichtman's Thoughts and Analysis
I can remember back in late 2006 shortly after Cisco launched their telepresence offering to much fanfare and media attention I would somewhat frequently get some version of the following question: "So... Is this telepresence thing real?" A year and a half later TelePresence is Cisco's "fastest growing business ever in emerging technology." 500 systems sold worth conservatively between $120 - $150 million + tens of millions more (SWAG) in networking gear for both enterprise customers and carrier partners. This includes Cisco TelePresence MultiPoint Switches, core routers, edge routers, customer premise routers, LAN switches, etc.
The Cisco TelePresence eco-system is profiting as well. First, the network and managed service partners who provide bandwidth, help desk, and/or managed telepresence gear are celebrating: This includes carriers such as AT&T, BT Conferencing, Glowpoint, MASERGY, Verizon Business, and WireOne. The carriers are upgrading/building out true QoS networks for telepresence customers that represent high-dollar recurring revenue (which Wall Street loves) from global Fortune 5000 customers. Second, the Cisco resellers and channel partners such as Dimension Data, Presidio, BT Conferencing, and Nexus are celebrating. These companies are reselling TelePresence gear, architecting networks, and installing systems for enterprise clients. Finally, the traditional videoconferencing companies like HaiVision, Polycom, Tandberg, and Vidyo are celebrating because the tremendous buzz generated by Cisco TelePresence is driving "tire kickers" into the showroom to check out "telepresence" who end up driving off with a traditional HD videoconferencing systems (or their telepresence offerings).
Thoughts on AT&T
I haven't really spoken with AT&T yet so I really only have part of the story but right out of the gate they seem to be on the right track with the first Cisco inter-company telepresence offering. It is no secret that the Lab is a big fan of inter-company telepresence. In fact I think we probably coined the term "inter-company telepresence" in our 2006 paper and earlier writings on the subject. For the uninitiated inter-company telepresence is the ability to connect a telepresence system to another telepresence systems not on your corporate network so you can do business with joint venture partners, vendors, and customers.
Being connected to your key stake-holders dramatically improves the utility of telepresence which increases the adoption and usage in a "virtuous cycle" I.E. as more and more organizations can be reached over inter-company telepresence networks it improves the business case to buy telepresence so more companies do which then improves the business case to buy telepresence which... You get the idea.
So AT&T getting into the game is a big deal... The company runs one of the largest IP networks in the world, has a tremendous installed base of global Fortune 5000 customers and fields one of the largest sales organizations in the world. If the company really gets behind telepresence ... watch out...
AT&T's Global IP Network
- Worldwide global network reach with 535,000 route miles
- Network availability of up to 99.999%
- Average 13% or better latency compared to key competitors, near-perfect packet delivery
- Dedicated access to MPLS services from more than 1,600 service nodes in 137 countries
- 143,000 routes and over 960,000 ports manages for customers
- Over 117,000 MPLS customer ports
- 8.52 petabytes of data traffic handled on average day
- 30 Global Internet Data Centers
- Remote access from over 45,000 points in 149 countries
- 4 million users of remote access client software
Aaron Roe has joined Nortel Multimedia Services
Rose Klimovich has joined telx as Vice President of Product Development
Libby Brennan has retired from AT&T
Michele Damerau has joined Cisco as Product Manager Remote Operations Services
Telepresence Industry Professionals - Our industry association on Linked In for professionals from the telepresence industry now has over 115 members!
I wanted to throw out a hearty: Welcome to TIP! to some friends, colleagues, and notables:
Jonathan Brust - Vice President Marketing and Business Development @ Glowpoint, Mark Casey - President of CFN Services, Jody Thomas - President @ Emergent, Manny Francisco - Senior Technologist @ DreamWorks, Thomas Jackson - CEO Mission Benefits/Former CEO TeleSuite, Duffie White - Founder and CEO @ Telepresence Tech, Peter Brockmann President of Brockmann & Company, Dan Lejeskar - Chairman & Co-founder of EON Reality, Steve Huey - Partner, Allen Austin , Dominic Dodd - Principal Analyst @ Frost & Sullivan, Chris Carr- Director of Video Markets @ MASERGY, Rob Hughes, Senior Vice President - Worldwide Sales & Support @ Vidyo, Bob LeBlanc - VP Strategic Alliances @ Savvis, Jim Oldham - VP of Sales - Teliris, Larry Stone - Senior Multimedia Collaboration Engineer @ Google, Kirk Topits - Product Manager @ Cisco TelePresence, Chris Otten - Business Unit Manager @ ROSCOR, William Guyton - President, Business Arts and Sciences, Ed Kohler - Producer & Talent - TechnologyEvangelist.com, Marshall Eubanks- CEO of America Free TV / CTO Iformata, Christine Perey - President, Perey Research & Consulting, Mike Guerrero - Director of Sales - HaiVision, Rich Tribino - Regional Sales Director - Savvis, Jeff Fleisher - Wholesale Account Exec @ XO Communications, Rusty Scott - DSP Pro, Christine Kelly - Business Development Pro, Irv Rodrigues - President, Avalon Technology, Kirk Muffley - Director of Conferencing, The Whitlock Group, Scott Lee - Vice President - Strategic Partners @ Teliris, Seth Borus - Sales Ronin, Brian Thornton - Consulting Engineer @ Savvis, Brad Allen - Senior Experience Design Manager @ HP Halo Collaboration Solutions, David Stern - Global Services Product Leader - Video & Rich Media Communications @ IBM Global Technology Services, April Slayden Mitchell - Research Engineer @ HP Labs, Mike Reetz - Vice President of Technology @ WireOne, Martin Monson - Vice President of Sales @ Glowpoint, Eamonn Shaw - Interaction Designer R&D @ TANDBERG, Mat Hans - Director @ Motorola Labs, Deb Hesse - Information Technology Manager @ Intel, Wayne "Lumpy" Ordakowski - President , LII Inc.
Are you a Telepresence Industry Professional that is interested in joining? If you are a member of Linked In then hit this link : http://www.linkedin.com/e/gis/76977/3745DE1F46C0 then drop me an e-mail at HSL@HumanProductivityLab.com to approve your membership. Include your snail mail address and I will send you a complimentary copy of the Telepresence Options 2008 Yearbook when released.
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