Published in October 2004

The Conferencing Factor
By Chris Böttger

.
With videoconferencing, conference rooms become collaborative environments.

On the rise, and quite possibly in your next design build.

      It’s all the rage. It’s being covered by all of the trade rags. It’s the way AV will be done for many years to come. It’s the convergence of conferencing technologies, and it’s headed to an AV installation near you. Over the past year, there has been what appears to be a collective demand by entities of all sizes for a more collaboration-friendly AV environment. This demand is not limited to large corporations. More and more, small businesses, schools, worship centers and even private citizens are requesting collaborative capabilities in conjunction with their customized AV builds.

An Example
     The TCI Group (www.tcioptics.com), a New York City-based supplier of custom optical components, is a small company that has joined the convergence bandwagon. Recently the company was searching for an AV solution that incorporates collaboration technology in order to reduce travel to the company’s manufacturing plant in the Czech Republic. When TCI contracted a local AV and conferencing integrator for the implementation of a modest videoconferencing addition, within two weeks the New York group was having face-to-face meetings with the Czech-based team. The installation was a complete success and TCI recovered its investment in the system within a few months of usage. President G. Rausnitz was so pleased with the installation that he purchased a videoconferencing system for his own Long Island NY home so he could participate in the meetings without having to drive into his office at 2:00am (8:00am Czech time). The company has seen a significant increase in usage and a substantial reduction in travel to the European office. As the company grows, they expect this increase in usage to continue.
     The appeal of conferencing capability is not new. Collaboration technologies such as the web and videocon-ferencing have been around for some time, videoconferencing for more than a decade. It’s a fact that face-to-face meetings are vital to the success of many business relationships and work-related projects. However, collaborating in today’s fast-paced, ever-connected world demands that we be in all places at once. The only way to maintain this level of communication without ringing up hundreds of thousands of dollars in travel costs and losing hundreds of valuable hours in productivity every year is by incorporating conferencing technologies into the mix.
     Videoconferencing, for its part, has redefined the “face-to-face” meeting. Over the course of three years, Wainhouse Research (www.wainhouse .com), an independent market research firm covering the rich media conferencing and communications fields, conducted a detailed study into the incorporation of collaborative technologies into the work environment. The data reveals that people are increasing their reliance on these technologies and this demand is spilling over into the AV integration industry. Those companies that provide AV system-integration services, with experience in conferencing technologies, stand to benefit most.

Changes Spurring Growth
     Several trends have spurred the recent growth in conferencing:
     • More Reliable: Most companies using videoconferencing conduct their meetings over ISDN (Integrated Services Digital Network) lines. Although it has always been the most affordable medium for video communication, ISDN is plagued by performance, reliability and image-quality issues. For years, the typical conferencing user has had to deal with the dreaded “dropped call.” Imagine being in the middle of an important board meeting with senior-level, international attendees and the call abruptly ends due to a service interruption. For this reason, large corporations accepted the initially higher costs of IP (Internet Protocol) Networks, and enjoyed relatively uninterrupted service.
     For the last few years, however, there has been a significant migration to these IP networks, a medium that is much more robust and recently has become more affordable. Used almost exclusively by larger organizations to date, video over IP rapidly is gaining adoption among mid- and small-sized companies. The image quality of the video calls is superior, the point-of-entry is significantly lower and the call connections are more reliable. Some service providers even guarantee their network’s uptime. One of those, IVCi (www.ivci.com), touts a 99.99% guaranteed network uptime behind flagship service IntelliNet, which is used by some of the nation’s largest companies.
     • Industry-Standard Increased: Video call quality is improving constantly, with this trend continuing due to H.264, a newly ratified video compression standard by the Switzerland-based International Telecommunication Union. H.264 aims to cut the necessary bandwidth for sending video during a videoconference in half. This translates into improved call clarity/definition and an increase in simultaneous call capacity. It also means that there is a substantial reduction in the bandwidth needed to hold video-conferences. This year, a call placed over a 256k IP connection (substandard economy class) looks as good as if were placed on a 384k IP connection (quality business class) last year.
     This means that companies of all sizes can now enjoy the same quality only larger corporations had access to previously. Because less bandwidth is needed to conduct better quality video calls, IT departments are more interested than ever because they can now devote less departmental resources and reduce the recurring operating costs associated with implementing videoconferencing.
     • Varying Uses: Companies of all sizes are employing a combination of conferencing technologies because each serves a different purpose. For instance, companies use videocon-ferencing to supplement face-to-face meetings, where the tangible elements of human presence, body language and eye contact are all active components of the meeting. This differs somewhat from web conferenc-ing, which companies are using almost exclusively to collaborate and share documents. In other words, video and audio conferencing are being used to make faster, smarter decisions, whereas web conferencing is being used to get work done rapidly in a collaborative environment.
     • More Affordable: With escalating international violence and terrorism still a point of concern for many business professionals around the world, conferencing companies realize that the technology is more relevant than ever, and with enhanced quality and reliability, demand will only continue to grow. What is happening in the conferencing technologies space can best be described as a communications phenomenon; akin to the boom of the home computer in the 1980s. It wasn’t that long ago that revolutionary technologies such as videoconfer-encing were available only to large companies with equally large budgets. This has changed with the “consumeration” of conferencing technologies.

A New York middle school benefits from the potential of videoconferencing.

Costs Have Changed
     Two years ago, you could have expected to spend $30,000 on two videoconferencing setups and many thousands of dollars on monthly network usage fees for a modest package linking two offices. Although big firms were happy to pay these prices to eliminate travel cost and productivity loss, the formidable upfront costs were a barrier for smaller companies. Today, entry-level products start at as little as $400 and maintenance-free, unlimited-use services packages start at $500 per month. A year ago, a simple package linking two offices in different geographical regions with the high-end IP service would have cost tens of thousands of dollars in setup, network integration and maintenance. Today, the same package can be purchased for as little as $4000. Last year, a study by Wainhouse Research showed that companies could expect to break even 12 months after implementing a videoconferencing system, factoring in cost savings associated with business travel, lodging and dining. Today, companies can break even easily only two to three months after implementation.
     Videoconferencing is the new “face-to-face” meeting. Wainhouse Re-search’s recent study, along with every other study that has been conducted recently on videoconferencing, shows that people are now able to effectively receive all of the key elements present with in-person face-to-face meetings (body language, eye contact, hand movements, subtle gestures). The technology has improved so drastically that it’s literally like being in the room with the person with whom you are meeting. For example, Polycom, manufacturer of video-conferencing products in the world, recently released the VSX 7000, which touts television-like video quality and integrated speakers that deliver sound crisp enough to make you forget that your meeting participants are actually not in the same room.
     It’s a different world out there. All accounts suggest that people around the world feel less safe because of terrorism, disease, loss of productivity and the expense of traveling, and are turning to efficient methods of communications that will allow them to communicate without taking the risks and drawbacks associated with traveling to their meetings.
     Related to concerns about terrorism, the continuing violence in the Middle East, escalating outbreaks of violence in Africa and Europe and the creation of a national terror alert, there is more resistance to fly than ever. Communication in today’s business world is different; it’s riskier and costlier.
     If it’s safer, more affordable and efficient to meet face-to-face over video than it is in person oversees, companies will choose videoconferencing because both accomplish the same result and provide the same effect. A recent report showed that employees still would prefer not to fly to their next out-of-town business meeting. Employers also prefer that their employees not fly because it is estimated that companies can reduce their travel expenditures by more than 50% annually by introducing videoconferencing to their overall communications program. In many cases, the savings equates to hundreds of thousands of dollars.

Findings
     In the second quarter of 2004, Wainhouse Research conducted a comprehensive study regarding the applications and usage of conferencing technologies and how they are impacting the way we communicate. The accompanying boxes offer some key findings of the study.

Chris Böttger, vice president & general manager, IntelliNet MCS for IVCi, LLC, Hauppauge NY, has been a regular speaker at industry events such as InfoComm and the Polycom User Group Annual Conference, and has worked for Polycom, PictureTel and British Telecom. He is heavily involved with IP networks and the future of conferencing technologies.