Telepresence technology promises a revolution in corporate communications, but costs may prove prohibitive in the short term.
Telepresence technology promises a revolution in corporate communications, but costs may prove prohibitive in the short term.
While video conferencing has been in use for more than 30 years in one form or another, the latest and most cutting edge version, often referred to as telepresence, has been attracting significant attention over the past few years, particularly after US networking giant Cisco entered the market in 2006 and put the full force of its marketing machine behind the launch.
Telepresence is designed to allow companies to hold face-to-face meetings, usually for up to 12 people, who may be spread across two or more locations. To give the effect of a genuine face-to-face meeting, telepresence relies on large, high definition digital screens to give life size images of participants, surround sound, and matching décor at each site to give the impression that all participants are in the same room.
We see our customers managing travel immediately, in particular with executives traveling business class. With a few nights in a hotel, it mounts up very quickly, so when they model those cost savings, even though it might be millions of dollars, it is quickly paid back. - Steve Leyland
In recent years, telepresence has become a multi-million dollar industry, with the main vendors Tandberg, Polycom and Cisco increasing deployments around the world, while newer entrants including Sony and HP are also vying for a share of the market.
Polycom's vice president for Europe, Middle East and Africa, Steve Leyland, says that researchers are reporting growth in excess of 100% for the company's telepresence system, RealPresence.
"The growth is very healthy for telepresence," he says. "It is still a very small sector but it has grown very fast. We have a number of installations around the world. A key driver of the growth we see is the fact that the technology is hidden to a large extent.
"Being able to walk into a meeting room and see the other participants on the other side of the table as if they were meeting makes for a very natural experience, so the usage tends to be very high, very quickly. So we are seeing very strong growth," he adds.
One of the main drivers for telepresence is the increasing cost of business travel, combined with the cost of lost productivity as key members of staff are away from the office, sometimes for just a few hours worth of meetings.
"The value proposition is so strong right now in terms of companies wanting to operate more efficiently and manage travel. Many companies also want to make a good corporate citizenship statement in terms of carbon footprints, the environment and so on," Leyland says.
Ian Gander, business development manager for emerging markets at Cisco's Telepresence Business Unit, agrees that the sector is being driven by the level of convenience afforded by the technology, which means that people actually want to use it, compared with earlier forms of video conferencing that were awkward to use, and gave a poor user experience. Gander stresses that this is what differentiates the latest breed of telepresence technology from previous incarnations.
Cisco launched its telepresence product in 2006, after examining what customers were looking for in video conferencing technology. "We knew it needed to be easy to use and easy to schedule meetings, and so we designed our telepresence system to provide that capability.
"Now we can sit here across the table from each other. It's nice and comfortable, the rooms look the same, and we feel like we are in the same room, even though we are not."
One potential barrier to the growth of telepresence is the hefty price-tag that accompanies it. A typical telepresence deployment from Polycom or Cisco for two offices starts at about US$500,000. Deployment across multiple sites is likely to cost several million dollars.
But despite this, the leading vendors insist that the return on investment for customers is rapid. "A typical global customer deployment with six, seven or eight units in the main cities of the world will cost several million dollars, but the payback is very quick," Leyland says.
"We see our customers managing travel immediately, in particular executives traveling business class. With a few nights in a hotel, it mounts up very quickly, so when they model those cost savings, even though it might be millions of dollars, it is quickly paid back."
While some customers will no doubt wait far longer than this to see a full return on investment, it can also be quicker, depending on how many sites are covered, and how often the company uses its telepresence system to avoid costly foreign trips and boost productivity. Andy Sanctuary, general manager at Tandberg, says that telepresence appears to be particularly successful in the financial services sector, where financial advisors use the technology to have face-to-face meetings with clients in other countries.
Setting the standard
Despite the rapid growth experienced by the sector and the quality of the leading telepresence products, cost is not the only hurdle to the technology moving into the mainstream. Another major challenge facing the sector is a lack of inter-operability between telepresence suites from the main vendors, which is mostly caused by a lack of compatibility between the protocols and compression methods used by equipment vendors, according to Andrew Hicks, a senior telecoms analyst with IDC-CEMA.
Hicks says that every major vendor is working on interoperability, although he admits the solutions "aren't very mature". Hicks also recently saw a beta demo of interoperability for high definition Polycom and Cisco systems, and while he says they were doing good work it was "obvious that it will take some more time to perfect."
"It's not just the CPE but also the underlying network technology, which has to provide much higher quality of service, lower latency, and things like video and audio trans-coding. It will be a while before standards emerge around these issues," he adds.
Indeed, while the majority of telepresence systems are deployed for internal meetings at the moment, this is likely to change as the technology moves into the mainstream. And this in turn will create a greater demand for telepresence users to have quality meetings with clients or partners using telepresence systems from different vendors.
Tandberg and Polycom's telepresence systems are compatible with each other, but not with Cisco's offering, according to Leyland. Sanctuary confirms that the two systems are interoperable, and that Tandberg can also be used with the telepresence offering from another US vendor, LifeSize.
Meanwhile, Cisco's business development manager, Ian Gander, says his company and other vendors are working together to improve interoperability.
He says: "All of the vendors have difficulty working with each other, but we are working very hard on fixing that so we can inter-operate with other user endpoints."
Another challenge for telepresence meetings using technology from rival vendors is ensuring the availability of the correct bandwidth. Indeed, Hicks points to the need for operators to interconnect their networks reliably in order to be able to transmit the telepresence traffic efficiently across different networks, which would involve work on prioritising telepresence traffic over other types of traffic.
Certainly, it is important for companies to gain maximum usage from their telepresence technology to gain the best return-on-investment, and telepresence meetings with other companies is one way to boost usage. Indeed, telepresence meetings with potential clients in other countries have the potential to help win business contracts, further contributing to return on investment.
But the potential for meetings with other companies can be limited, given that the price of telepresence technology is beyond the reach of many organisations. Furthermore, where other companies do have telepresence technology, it might be from a rival manufacturer.Cisco is looking to circumnavigate this problem by establishing public telepresence meeting rooms around the world, giving all companies, and even individuals, access to telepresence.
Cisco recently rolled out a number of public meeting rooms in India with Tata Communications, and has plans for more public rooms globally. Gander is hopeful that these meeting rooms will "create more leverage for the investment that the companies have made."
Most vendors and analysts are optimistic that interoperability issues will be solved in the near future, and with the roll out of fibre cables helping to increase bandwidth around the world, telepresence looks set to move squarely into the mainstream.
At Polycom, we communicate all the time with the video, and if we have to use a phone, it feels weird. When you don’t have the picture of the person, technically you are missing 55% of the human communication and you do feel the loss of that. - Steve Leyland
Many consumers are used to combining video with voice through the use of web cameras, and although a move to telepresence will involve the use of more advanced technology, they will already be familiar with the basic concept.
"Telepresence will absolutely move into the mainstream," says Hicks. "In 7-10 years most of the necessary functions will be on a chip in consumer set-top boxes, and the network intelligence will be there to support widespread use. By then, large HD displays, high-quality cameras and microphones, and surround sound will be commonplace, so home equipment should be no problem."
Hicks says that the sector could have a certain amount of immunity from the global economic downturn as companies look to make investments that will help them cut back on business travel. "Anecdotal evidence from vendors suggests that the recession is forcing companies to contract their ROI timeline from 18 months to 8-10. On the benefit side, reduced travel expenditure is obviously the primary factor, although increased productivity is harder to measure in the short term," he says.
Polycom's Leyland says he thinks people will eventually have a form of telepresence equipment in their homes. He adds that Polycom is working on some projects for governments in Europe for small business-based video services through the local carrier. "They are very interested to bring video to doctors' offices, elderly homes for patient care for that type of enterprise," he says.
"We will see the video becoming mainstream, a normal way of communicating. It's going to move into homes, more and more into enterprises and it is going to be a powerful tool," he adds.
"At Polycom, we communicate all the time with the video, and if we have to use a phone, it feels weird. When you don't have the picture of the person, technically you are missing 55% of the human communication and you do feel the loss of that. I think it will become mainstream. We have been using phones for 100 years. It's time for a change."
Cisco recently announced the launch of a new set of collaboration technologies, which it believes will help it tap into the US$34 billion market for collaboration solutions.
The launch includes over 40 products, including updates to key lines and new additions, for unified communications including video and Web 2.0 platforms.
In a video briefing with journalists, Cisco CEO and chairman John Chambers said the launch would usher in a "decade of productivity and a decade of innovation, in which people all around the world will be able to participate".
The launch includes the latest version of Cisco Unified Communications, version 7.0. The new version of Cisco's core collaboration software, Unified Communications 7.0 now includes compatibility with Windows Mobile to increase mobility usage. The company also plans to introduce integration with Apple iPhone within the next year.
Unified Communications also now includes full integration with leading Microsoft and IBM collaboration solutions, to enable customers to select best of breed solutions, and new solutions, plus enhancements for remote workers.
Telepresence set for "explosive growth"
Analysts from ABI research say that the entire telepresence market, which includes equipment, network services and managed services is set for a period of "explosive growth" over the next six years, with the market forecast to expand from a 2007 level of not quite US$126 million to nearly $2.5 billion in 2013.
"People thought Jimmy Stewart was crazy when he talked to his imaginary six-foot rabbit friend, Harvey," says ABI Research vice president Stan Schatt. "Now hundreds of senior executives are talking to virtual friends around the globe and no one is laughing anymore. The telepresence illusion is so real that many executives forget the person they're talking to is not really in the same room."
While telepresence might attract the most attention, vendors are also experiencing an increase in business for desktop video conferencing solutions, many of which are compatible with telepresence offerings.
Tandberg's Andy Sanctuary says he is seeing big growth in demand for desktop and regular video-conferencing applications for meeting rooms.
"We have only a handful of installations at the moment with the telepresence, with our Experia systems. Clearly we do expect that to change. We have had a lot of interest since the announcement of T3, the immersive telepresence proposition," he says.
Demand for Tandberg's video conferencing products has come from various sectors including oil and gas, finance, and government and education. Sanctuary adds that he has seen solid growth in some of the key oil and gas producing countries in the world, in particular in the Middle East, with Saudi Arabia showing a keen interest in the products.