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July 15, 2008 | Chris Payatagool

New systems, travel costs give videoconferencing a long-awaited boost

Cisco_Telepresence_EMC.jpgA teleconference gets under way at EMC Corp. in Hopkinton. On the other end are company managers in Santa Clara, California. (Boston Globe Photo / Wiqan Ang)

By Carolyn Y. Johnson
Globe Staff / July 14, 2008

HOPKINTON - Bob Basiliere, an EMC Corp. vice president, used to fly to the West Coast every six weeks to meet with his team. Now, when he needs to talk face-to-face with them, all he needs to do is look across an oval table that extends, virtually, from Hopkinton to Santa Clara, Calif.

The high-end videoconferencing system from Cisco Systems Inc. that Basiliere uses has spared him any cross-country trips since November and has saved EMC an estimated 3,000 hours of employee work time and $300,000 in travel expenses over the past nine months.

Videoconferencing, long touted as a transformative business technology, has long fallen short of its potential, plagued by poor quality or unreliable experiences that can't substitute for important in-person meetings.

But a slew of changes - including improved technology, rising travel costs, and broad societal acceptance of online video - are driving growth in the sector.

Andrew_Davis.jpg"No matter how you look at it, the conferencing and collaboration industry today is in a period of unprecedented growth, and we've been tracking the market for 15 years," said Andrew W. Davis, managing partner at Wainhouse Research, a Duxbury firm that tracks the videoconferencing industry.

Davis said the industry grew at about a 30 percent rate over the last year. He estimates the total market for factory revenues of all conferencing technologies - including audio, video, and Web conferencing - at $8 billion in 2008; it is projected to grow to $10 billion in 2012.

One major factor in drawing attention to videoconferencing are heavyweights that entered the market for high-end telepresence systems that attempt - often through integrated lighting, well-placed speakers, and multiple cameras - to convey a sense of realistic interaction.

The HP Halo Meeting Room

Cisco and Hewlett Packard Co. began offering telepresence systems over the past three years.

Joan_Vandermate.jpgMeanwhile, Polycom Inc., a long-term player and leader in videoconferencing that also offers telepresence systems, is in a state of "hypergrowth," said Joan Vandermate, vice president of marketing.

"We're in almost a bit of a perfect storm in terms of things that are stimulating growth," Vandermate said.

"Oddly enough, the economic recession is helping our sales, which seems counter-intuitive, but this is one of those technologies that [benefits] when organizations look to cut operational expense costs, look to cut travel costs."

Videoconferencing is at the nexus of several trends.

The Polycom 400 Series RPX

As the workplace fills with younger people - comfortable with Internet phone services such as Skype and with online video - offices may be primed for videoconferencing.

Rising fuel costs and the airline industry's woes are making travel less attractive to companies looking for ways to cut expenses and save time.

And companies concerned about their carbon footprints or looking to cultivate a green image may consider videoconferencing as a way to show their commitment to the environment.

But the lifelike videoconferencing systems are not cheap.

EMC estimates it paid about $300,000 for its two studios in Hopkinton and Santa Clara, and plans to build more this year. While costs range widely, a typical Telepresence system might cost $200,000, with maintenance costs of about 15 percent a year.

Still, vendors say the technologies pay for themselves in the end.

W.R. Grace and Co., a Maryland chemical supplier that uses Polycom videoconferencing systems, said it cut travel expenses and outsourcing costs by $8 million in one year.

Darren_Podrabsky_sm.jpgDarren Podrabsky, marketing manager for HP Halo Collaboration Studios, said the company recently decided to quadruple its telepresence studios in large part because of the need to shave travel budgets.

Cisco estimates its teleconferencing systems have saved Cisco alone $150 million in travel costs, and says the systems are its fastest-growing product.

Laurie Heltsley, director of strategic projects at Procter & Gamble, said that since the company has been tracking its videoconferencing over Cisco's TelePresence system eight months ago, employees have reported their sessions took the place of 3,000 trips.

The technology allows it to make better use of the highest-paid workers, Procter & Gamble said. The company can "put those people in different places around the world in literally minutes or hours, whereas in prior kinds of scenarios it would have taken literally days or maybe weeks to scale individuals in that way," Heltsley said. "A conversation that needs to be had can be had in multiple locations around the world, in an hour, in a manner consistent with face-to-face conversation."

The technology also allows the global company a sense of continuity. For example, when an employee retired recently, there was a group luncheon through the TelePresence room, with colleagues from far away participating in the farewell.

"It's time-zone sensitive - a virtual lunch is a breakfast in one place, lunch in another, and happy hour in another," Heltsley said. "It's very fun to watch."

Carolyn Y. Johnson can be reached at [email protected].

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