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From Telepresence to the Desktop - Video Comes Of Age (The video conference room is dead - long live video conferencing)
November 2, 2009 | Chris Payatagool
By David Danto, IMCCA Director of Emerging Technology
From Telepresence to the Desktop - Video Comes Of Age
The video conference room is dead - long live video conferencing
The video conference room is dead - long live video conferencing
These are exciting times for those of us in the video collaboration industry. Cisco, one of the largest firms in the high tech world has agreed in principle to purchase Tandberg, one of the leaders in the video conferencing industry. While the deal is not completed and still has some hurdles to overcome, on a scale of one to ten this is a solid fifty in terms of the ramifications it presents to the future landscape of our industry.
In order to understand the magnitude and nuances of this approaching upheaval one first has to look back at the history of video conferencing and telepresence. The IMCCA published a comprehensive background on telepresence in the January 2008 edition of Europe's World Commerce Review which provided an in-depth perspective worthy of review. The state of the industry at that time could be summed up as follows:
· While traditional video conferencing systems represented (and still represent) 99% of the industry, Cisco's entry into the top 1% of the market (telepresence) was a defining and disruptive moment. None of the other manufacturers or providers had the marketing budget and muscle of Cisco.
· The legacy manufacturers adopted a "we have telepresence too" stance, very content to increase the sales of their telepresence and traditional video products to the rising tide of customers created by Cisco's marketing.
· The very compelling message of what telepresence provides had not been challenged. There was little incentive to market against the telepresence concept - the idea that big, expensive, high-quality systems "solved the legacy problems" of past, far less expensive solutions - regardless of the inaccuracies that simplistic thinking created.
· Telepresence systems were being marketed and sold to senior management in the C-suite, with many of the manufacturers bypassing the traditional video and multimedia experts at customer firms in favor of the executives and IT leaders (who usually weren't video product experts and didn't question the inaccurate marketing message.)
So then one might ask why Cisco would feel compelled to purchase Tandberg. The list of good business reasons is a mile long and many are outside the scope of this article. What had become clear though, even before the deal was announced, was that the telepresence marketing message was being forced to change. Cisco themselves were having an "Animal Farm" moment with their TelePresence product.
Their go to market themes in late 2007 were:
In order to maximize ROI on a video system the equipment needs to be installed in a specially designed, dedicated room expressly for the purpose of video. Utilization of that space would be able to achieve numbers in the 80% to 95% range, justifying the increased spending in equipment, bandwidth and facilities. Life-size images are an absolute requirement. Interoperability with legacy video conference gear would ruin the TelePresence experience.
Their new themes in mid 2009 - even before the Cisco-Tandberg deal was announced - were as follows:
Target utilization levels beyond 50% to 60% percent result in end-user frustration due to an inability to reserve a first choice room and/or time. There is significant value in lesser priced systems being installed in multipurpose rooms - allowing more people to have access to the video tools (and resulting in even lower utilization). Life-size images are really nice but can be somewhat sacrificed on one end of a call in order to bring video to more users. Interoperability with legacy video conference gear is an absolute requirement.
The message had changed significantly. Everything the legacy video and multimedia professional had said about the emerging telepresence space was shown to be true. This tremendous push into the upper 1% of the market garnered the majority of attention but did not significantly change the reality of video systems as they relate to Metcalfe's law - one has to extend the reach of the video systems to many users - more than the telepresence paradigm allows for - in order for the technology to be widely adopted. While many manufacturers did call their single screen systems telepresence whether or not it was true, the reality was that as these screens continued to get smaller and reach wider deployment, "it really wasn't telepresence any more" (just as we said back in January 2008). For all practical purposes, the term telepresence while having a clear definition in its purest state has really just become a more politically correct method of saying video conferencing.
What will the industry look like going forward?
The coming upheaval will have many effects on the current manufacturers, only some of which can we even attempt to predict.
Cisco and Tandberg have put themselves on an interesting path. The combination has already attracted some creative nicknames from our industry, beginning with the obvious "Cisberg" and including my favorite, the Monty Python homage "Norwegian Blue." There is tremendous speculation about how this newly combined firm would operate. The Cisco TelePresence related business units are a marketing driven operation, very committed to image, message and executive perception. It is not news that engineering prowess and product reliability were not the most important missions in the TelePresence unit there. In contrast, the team at Tandberg always had product engineering and reliability as mission one. On the equipment side one can surely expect a merging / hybrid strategy for a brief period of time. However, in the long run, the better designed products will win out. (If you need to take a car ride, would you choose to take your Lexus or your Pinto?) One has to assume that the superior C60 and C90 codecs from Tandberg will eventually be the engines for Cisco TelePresence. More than just better, these engines will allow Cisco to adopt a strategy that allows interoperability from the telepresence room to the desktop and everywhere in between. Cisco will now be equipped with a broad range of video products for every use case. Just think of how the personal video appliances will explode when promoted with Cisco's marketing might. In addition, it doesn't take a psychic to realize that with a few tweaks Tandberg's industry leading management platform, TMS, will be the TelePresence management platform Cisco has needed for a long time.
On the operational side, it has already been announced that Tandberg CEO Fredrik Halvorsen will take over control of Cisco's TelePresence team upon completion of the deal. Fredrik and his management team will likely represent a complete change of direction for Cisco's video group, moving it much further toward an open philosophy that will listen to customers and respond with dialog and solutions. (In fairness to the existing Cisco team, there was only so much responsiveness they could provide while locked into the CTS platforms as their only product. As an example, take a peek at one of Cisco's own compatibility matrix websites, showing just how many of their own TelePresence products and firmware versions don't work amongst themselves.)
For the rest of the firms in the industry, the picture isn't as clear. Much has been said about Polycom in the wake of the announcement. They are now clearly positioning themselves as the only choice for a Cisco independent, open platform video solution. The latest industry research showed them actually retaking the lead in global video system sales by a small margin for the first time in years. Andy Miller (ex. Cisco, Tandberg and IPC) has recently joined their executive team as the head of "global field operations" with a clear mandate to help move them into a market leadership position. Polycom may wind up strengthening their relationships with the independent, "Cisco-hating" firms of the world, or they might be the next buy-out target of another large IT vendor, further consolidating the industry. If that happens one has to wonder how long the remaining independent video manufacturers will be able to survive on their own. Video collaboration is changing from a product industry to a solution industry - and to a lesser extent from a hardware to a software industry. Stand-alone hardware manufacturers are surely on the endangered list.
Radvision is in uniquely difficult circumstances. Cisco has been utilizing their products - specifically the innovative Scopia Bridge - as their gateway MCU for TelePresence to connect to standards based video products. If the Cisco-Tandberg deal is consummated Cisco will surely switch to using the Tandberg owned Codian bridges coming along with the deal. It's hard to imagine how Radvision will replace their largest customer.
Two clear categories of winners in the new video world will be managed service providers and B2B connection / exchange providers. If you haven't noticed everybody and their grandmothers are getting into the services and connectivity businesses. There are two big reasons for this. Firstly, the paranoia of IT risk and security teams has finally defeated any hopes of a simple, universal border control / firewall traversal solution for IP video. Regardless of the fact that there is an industry standard and highly effective method of enabling secure external video for any enterprise (that Tandberg helped in fact create) this standard has not been widely adopted. Tandberg was not an IT vendor, and as an outsider they rarely gained the approvals required to place this technology at an enterprise's secured doorstep. The other reason for the explosion of these businesses is simple - money. Many firms have discovered that selling these B2B connection services (and to a lesser extent services to manage all a firm's endpoints) is a wildly lucrative business. Customers will pay barrels full of cash to buy secure connections on private exchanges and the related services (even though they could have achieved them for free if they made their paranoid security groups back down.) Look for a continued explosion of offerings in this area.
What will video collaboration look like going forward?
When the Cisco-Tandberg deal is completed and their expanded product catalog offers much more than just rigid telepresence systems we will finally start to see a correction in the over-hyping of telepresence. At this point the video collaboration industry will have been forever changed. The idea of a "video conference room" - meaning a place you have to go to to engage in visual collaboration - will go away, just as the phone booth did when you no longer needed to go somewhere special just to participate in a voice call.
Three paradigms for video will survive: Desktop Video, Telepresence and the Video Equipped Meeting Room.
Corporate executives have certainly embraced telepresence as an excellent system for visual collaboration - in comparison to their legacy equipment. However, no executives are going to prefer going to a shared room they have to wait in line to reserve when they can make a telepresence quality call from a personal 24" screen on their desk. The Cisco-Tandberg deal clearly means that desktop video is about to break-out in a huge manner, far displacing telepresence as the industry darling. Some reasons for this are:
- The desktop appliance is far less expensive than the telepresence room
- It requires no sunk costs - no "construction dependencies" to activate or utilize
- It can be installed, removed and relocated with no loss of investment
- Widespread use of them will require a heck of a lot more bandwidth and connectivity within the enterprise (a reality that makes Cisco's network infrastructure people happy I'm sure)
- It is personal - requiring no reservation and always available - matching the long sought after promise of "video dial tone"
At the same time, other unified communications vendors are pushing the concept of "free desktop video" through an enterprise's PCs. Microsoft OCS as an example offers "click to connect" escalation of IM sessions to voice and video calls - even HD quality video calls with the right camera. Soon a lot of people will be adopting the desktop video paradigm in a big way, making the need to go somewhere to have a video call a thing of the past.
People will still utilize truly immersive telepresence rooms, but only when they are appropriate - when two groups of people need to meet in face-to-face meetings for extended periods of time. Regardless of what the manufacturers call it, the "one screen telepresence room" will fade away.
This leaves the third paradigm, the meeting room. As stated above you'll no longer go to a conference room just to make a video call. However, if you have a real need for an in person team meeting, and one or more of the required participants can't be in the place where the meeting is being held, video will be available in appropriately equipped rooms to be utilized in much the same manner that the speakerphone on the conference table is today - as a tool to allow this remote site to join. This evolution of conference room video will also bring richer collaboration tools, so teams can share and interact with data and content.
With these three models - Desktop Video, Telepresence and the Video Equipped Meeting Room - we will see the end of the video conference room as we knew it, but at the same time we will see the widespread adoption and continued growth of video throughout our culture and businesses.
Death to the video conference room - long live video conferencing!
A View From The Road is written by David Danto and contains solely his own, personal opinions. David has spent 31 years in the audio visual and broadcasting industries. He has designed facilities for firms such as AT&T, Bloomberg LP, FNN, Morgan Stanley, NYU and Lehman Brothers. He has recently joined JPMorgan Chase & Company and is the IMCCA's Director of Emerging Technology. Email David at David.Danto.IMCCA@Danto.com
About the IMCCA
The Interactive Multimedia & Collaborative Communications Alliance (IMCCA) is a not-for-profit user application and industry focused association with membership comprised of service and product providers, consultants, and users. Members benefit from the understanding and the use of various interactive and collaborative communications technologies in their professional and everyday lives.
For further information please contact Carol Zelkin, IMCCA Executive Director, at 516-818- 8184 or firstname.lastname@example.org. Visit the IMCCA web site at www.imcca.org
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