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Pushing telepresence into the boardroom

January 8, 2009 | Chris Payatagool

Thumbnail image for cisco_cts3000.jpgBy Philip Stafford

In less than an hour, David Rowe, chief executive of Easynet, has completed three face-to-face meetings with people in Hamburg, Los Angeles and London.

In fact, they are conducted from his desk via an online high-definition video conferencing system, known as telepresence.

Since the broadband network provider was bought by British Sky Broadcasting in 2005 for GBP 211m, Easynet has launched the same system across the News Corp and BSkyB empires. James Murdoch, chairman and chief executive of News Corp, and Jeremy Darroch, chief executive of BSkyB, are on his speed dial, as is Rupert Murdoch "although I've not actually phoned him yet", Mr Rowe admits.

He uses the telepresence system two to three times a day, not only to see his executives but also his children.

Dimension Data, the London-listed South African communications technology group, uses it to keep in touch with its executives around the world and with Cisco, an important customer and one of the largest teleconferencing equipment makers.

The technology is spreading fast among large companies eager to cut travel costs and executive fatigue and improve productivity, with BT's Conferencing division recording a 25 per cent year-on-year growth in teleconferencing to the end of October.

Although some of its champions tout telepresence as a new conferencing medium, it is essentially the next stage of online video conferencing, using high definition screens and improved audio quality. It enables users to see and hear every facial and vocal nuance, much like being in an actual meeting save the exchange of business cards. The system can range from a screen on a desktop to a purpose-built suite.

A typical suite can cost GBP 350,000 (GBP 240,000) or more and a further $20,000 a month to run. HSBC has six telepresence rooms, incorporating speakers, lighting, cameras and microphones. The bank estimates that for a single meeting by telepresence that might have required three employees to travel from Hong Kong to Chicago, the group could save up to $50,000 in airfare and travel costs.

Furthermore, it estimates for every 2,000 miles of personal air travel, one tonne of carbon dioxide is emitted.

Even its most ardent supporters, however, admit that it will never completely replace the need for face-to-face meetings. Instead it will cut their frequency.

Although video conferencing was first unveiled by IBM in 1964, only recent technological strides such as broadband and improved compression have made it a viable proposition. "Every customer has a individual decision to make about how it plays into their communications strategy," says Mr Rowe. But whether it is advancing as quickly as its proponents argue is another matter.

Aaron_McCormack.jpg"It is clear customers are more nervous about making buying decisions of any nature, whether it be video or other services, than they were a year ago, so they're carefully evaluating return on investment", says Aaron McCormack, chief executive of BT Conferencing.

"But it means we are winning greater share of the available business in the marketplace. I think the market is backing off somewhat," he says.

"The downturn has made us focus less on the 'wow' factor and more on the compelling return on investment," agrees Joe Sigrist, senior vice-president and general manager of video solutions at Polycom.

However, Mr Rowe points out that it is difficult to sell the idea to a chief financial officer simply on the basis of cost cutting. "It's difficult to tell people not to travel because there is no money, as it implies you were travelling needlessly."

Nevertheless, the industry is aware that it is has to overcome video conferencing's patchy history.

"We have to make sure that the technology works and this is quite difficult," says Hakon Dale, chief technology officer at Tandberg.

Nevertheless, Mr Rowe foresees the technology moving beyond just an internal communications tool. "News Corp is also driving efficiencies into other people's businesses," he points out.

"The more feature-rich the tool becomes and the more it becomes an inter-company tool and not just an intra-company tool, the more likely people will want to take part, as that's yet another set of conversations and travel needs that can be cut", says Mr McCormack.



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