Tech Watch: Telepresence solutions

By Heather Clancy, Contributor

Telepresence solutions -- with their ability to contain business travel costs and meet market pressure for corporate environmental responsibility -- could prove relatively recession-proof in 2009.

What's more, value-added resellers (VARs) and network integrators have plenty of emerging products they can represent in this budding market, if they're willing to invest in training on both products and video standards, demonstration equipment purchases and lengthy sales cycles. Some companies that sell telepresence technology, such as Cisco Systems, LifeSize Communications, Polycom, Teliris and Vidyo, are recruiting select numbers of partners across North America. (The glaring exception is Hewlett-Packard, which markets its Halo line only into large enterprise accounts and still sells it entirely direct.)

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This is probably a good time to provide some thoughts about the difference between telepresence and its older sibling, video conferencing. For starters, the video quality in a telepresence solution is generally high-definition, and the user interfaces are simpler for the average person to use without training. Telepresence vendors are also keen on promoting the idea that the user experience is much more "immersive" than with video conferencing, which often makes remote participants very aware of their remote status. You could say that telepresence is video conferencing that works as expected.

With systems from Vidyo, for instance, all participants look directly into the camera, and cameras are positioned to focus more on the people in the meeting rather than on the table, cutting down on "walnut cam," said Marty Hollander, senior vice president of marketing at Vidyo.

Marc Trachtenberg, CEO and co-founder of Teliris, another telepresence solutions vendor that actually started out as a video systems integrator, said the user experience needs to be so natural and complete that participants decide using the telepresence system is easier and better than flying to a meeting in person -- not to mention much less expensive.

Telepresence services company Virtela estimates that a company that typically spends $23 million on travel annually can recover roughly 385,000 hours of productivity and save up to $7 million in travel costs by using telepresence solutions to handle some of its meetings. Cisco, which has installed 300 TelePresence rooms for its own use internally, realized a nine-month payoff for its first 110 rooms, according to Erica Schroeder, director of marketing for the Cisco TelePresence line.

"These are tools that are almost self-justifying," said Ira Weinstein, senior analyst and partner for Wainhouse Research, which tracks video conferencing and telepresence sales.

Wainhouse reports that growth for telepresence solutions doubled from 2007 to 2008, with revenue now increasing between 25% and 30% annually. Let's be clear, though -- this is still a small market, mainly because of the six-digit price tags the most sophisticated products carry. As an example, Wainhouse reported that end-point sales for the second quarter of 2008 reached $325 million, up 24% year over year. Cisco, which is credited with making telepresence a boardroom name, sold just 500 high-end TelePresence systems in the first 18 months of the product line's existence.

"When this capability finds its way into software, that's when it will really get big," Weinstein said.

VARs looking to get into telepresence technologies will find there are plenty of products to represent, depending on the customer base they want to penetrate.

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For the enterprise, there are certainly the big six-digit immersive room systems that people usually associate with the concept, but there are now also many options for midsized accounts priced under $100,000. In October, for example, LifeSize updated its line with the LifeSize Room 200 ($16,999) and the LifeSize Conference 200 ($49,999), both of which support full HD video. Vidyo dips the lowest into the small-business space: Some of its products range from $6,000 to $13,000, and you can buy additional licenses for Windows desktops for $30. (Macintosh support is in beta.) Teliris offers everything from a personal edition that goes for $33,000 to its flagship VirtuaLive Telepresence; plus it has introduced a line of whiteboards and other touch collaboration tools to go along with the visual technology.

Two telepresence developments to keep an eye on are support for interoperability that allows a person to use a desktop solution in conjunction with one of the room systems (such as when a consultant or remote worker needs to participate in a meeting), and support for emerging video standards that will distinguish the systems from one another. Vidyo, for example, can reach down onto the desktop because it supports a new protocol called H.246/Scalable Video Coding that essentially accounts for network hiccups and helps make sure that someone with a slow Internet connection has a decent experience.

VARs with a background in audio-visual integration or extensive networking experience are logical candidates to participate in this emerging market, Wainhouse's Weinstein said. The big difference between working with telepresence solutions and their current lines of business will be the attention to customer service that a successful player needs to bring to the relationship. End-to-end support is critical, he noted.

Robert Slye Electronics, an integrator in Washington, D.C., started life by providing intercom systems for the White House and is now studying technology from Teliris as an option for its government and legal clients in "the meeting capital of the world," said Cynthia McAboy, vice president of business development. The company recently worked with Teliris and bandwidth provider XO Communications to provide demonstrations for its clients. "We knew we would get this investment back, even if it's a year or so down the road," McAboy said.

There are a range of partnership types for would-be telepresence solution providers to consider. Cisco supports about 80 authorized technology partners worldwide that have high-end networking backgrounds. These VARs have the advantage of being able to use the roughly 300 TelePresence rooms Cisco has set up internally as demonstration resources. Polycom maintains three different levels to its program, ranging from VARs that can only represent its personal telepresence line to those that are certified to offer its entire end-to-end immersive systems, along with the network services to make the total solution work seamlessly. Vidyo is working on a program that will allow some of its partners to host services for small businesses based on their equipment, much like Cisco has arranged to do with AT&T, which is building out TelePresence service locations that companies can rent by the hour or day.

York Telecom in Eatontown, N.J., specializes in visual communications, so it has invested in understanding a broad range of telepresence technologies and in training at the highest level with its main partner in this space, Polycom.

Over the past year, the VAR has sold 20 totally immersive telepresence solutions, said Ken Scatturo, York Telecom's senior vice president of global sales and business development, and according to Scatturo his company's value-added services were key to these sales.

"I do believe that organizations that just sell the equipment really can't do this effectively," he said.

About the author
Heather Clancy is an award-winning business journalist and consultant on high-tech channel communications with SWOT Management Group. She can be reached at hclancy@swotmg.com.

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