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Telepresence With Grandma Makes Cisco Flip

March 27, 2009 | Chris Payatagool

By Sagee Ben-Zedeff

Last week there were two announcements coming out of Cisco, that seriously shook the grounds of the world IT market. While Cisco's Unified Computing system got a mixed reaction, ranging from "a significant shift" (from Cisco and its technology partners) to "nothing new" (from competitors), its decision to acquire Pure Digital Technologies for $590M, maker of a popular digital camera technology - The Flip, has left most simply wondering.

As Andy Greenberg from Forbes wrote, Cisco's love of video is no secret. Cisco's CEO, John Chambers, has said more than a few times, that video is the next killer app (video). For the past two years Cisco was furiously marketing their Telepresence technology and Telepresence experience, and had a significant role driving the great hype of high definition video conferencing.

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Cisco Telepresence System 500. Source: [email protected]

But Cisco's "high end, high priced, high quality product" pitch kind of backfired in the face of the San Jose giant. While it prides in customer adoption, it's clear that the fancy-yet-expensive Telepresence rooms won't rule the collaboration world. In fact, it seems more likely that if video conferencing becomes a mass means of communication, it would be via the desktop or over mobile networks. Even Cisco is now talking about "a collaboration infrastructure" that spans across different networks, wired and wireless, and has recently launched a mobile version of WebEx, its popular conferencing client.

And so Cisco, as well as its fierce competitors, came up with the ultimate fusion between the high-end experience of Telepresence and the personal nature of desktop conferencing: personal telepresence. That is, a telepresence-quality endpoint that can be massively deployed on desktops as well as at homes - cost-effective and yet rich in experience, the best of the two worlds.

Last week, Cisco's VP of Marketing of the Emerging Technologies unit, David Hsieh, wrote that he's "tired of TelePresence elitism":

If I got a nickel every time someone says "Telepresence is great, but it's only for top executives" I could solve the economic crisis single handed... as if a great experience must only be for the high and mighty...

If you have an idea about how we could make Cisco TelePresence even more accessible to anyone, anywhere, leave a comment...  we've got some pretty good ideas already, and we'll be sharing them soon so stay tuned!

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The Original Flip Video. Source: The Flip's website.

If you're reading David's strong words a few days after the Pure Digital acquisition, suddenly things fall in place. Pure Digital's small, handset-like video cameras sell for a couple of hundred of dollars, and feature a simple one-button interface, a USB port and the software to make its service simple and seamless. Just what Carlos Dominguez, Cisco's senior VP, fantasized about a few months ago:

"Eventually we'll put it [Telepresence] in people's home. You have a high-definition television and a set-top box. All you need is a high-definition camera. That's it".

Now imagine the Flip connected to a Scientific Atlanta set-top box at home or a Linksys router at work. What you get is exactly the high-quality, cost-effective, very cool "personal telepresence" everyone's talking about. When you examine what the competition is doing, rolling out HD USB cameras, and what happens elsewhere in the market, with wireless HD cameras being introduced, Cisco buying the Flip suddenly makes a lot of sense.

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Next-Gen Personal video conferencing?  (CC)

Telepresence with your Grandma? James McQuivey, analyst for Forrester Research, sees it as a feasible future in "two or three years from now". If this is the business case, then $600 Million are a small price for Cisco to pay. Selling to Grandma, however, may prove to be much more complicated than selling to IT managers of big corporations.

One may argue that buying Pure Digital makes much more sense if Cisco plans to "simply" enrich its set-top box with video streaming or uploading capabilities. Just add the Flip, and you can share your video content with your friends and family, either in real-time or via UGC websites such as YouTube.

In any case, personal telepresence or not, the video conferencing market, and the video market in general, will definitely benefit from this massive investment in visual communication by one of the big giants of the industry.







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