Telepresence: Ready for its close-up

Late arrivals and missed connections could be a thing of the past if telepresence continues to gain popularity among high-flying executives

Marthin De Beer, the senior executive in charge of Cisco Systems' telepresence video technology, may have overlooked one tiny detail when he decided in 2006 to drink the company Kool-Aid and begin meeting whenever possible with colleagues and customers via telepresence, the next generation of high-definition videoconferencing.

Late last year, it began to occur to De Beer, who has racked up 2 million frequent-flyer miles on American Airlines, that he might have to relinquish his coveted Platinum Member status with the airline because he had managed to reduce his travel by two-thirds in 2007.

“Back in December I looked at my wife and I said, ‘Honey, you know what, we're going to lose our platinum status this year.’ I hadn't thought about this, but the upgrades won't be as easy now,” De Beer said with a laugh. Sure enough, a week later he received a letter from American informing him that, indeed, he had not traveled enough miles in 2007; however, he was being granted Platinum Member status for life because of the 2 million miles he had already banked. Thank goodness for small mercies.

De Beer, senior vice president of Cisco's emerging technology group, and the rest of Cisco's management team, including Chairman and CEO John Chambers, are on a mission to make sure that they aren't the only corporate executives faced with losing preferred status on airlines. During the past year, Chambers and company have fast-tracked telepresence to the top of Cisco's priority list, upgrading the corporate backbone by 435% in the past nine months to accommodate traffic among more than 175 of its own telepresence rooms. “We now have OC-12 backbone connections between all of our major geographies,” De Beer said. “That is purely driven by telepresence. At least 60% of our WAN traffic today is telepresence traffic.”

Cisco's aggressive commitment to telepresence is one of the things breathing new life into videoconferencing, which has languished for years with a reputation for being clunky, unreliable and generally not as appealing to executives as global travel. The other major influence is the growing corporate concern over climate change. Airline travel has perhaps the fattest global footprint on the planet — a round-trip flight from Chicago to London releases 1.459 tons of carbon dioxide gas into the upper atmosphere, per passenger.

“There is a global focus on corporate social responsibility,” said Steve Masters, head of global convergence propositions for BT. “The arguments of the past about executives enjoying international travel are wearing thin. What we are seeing is a massive mind-set change that starts at the top. I don't know any large corporate customer who isn't concerned about this.”

The availability of relatively cheap bandwidth, the need to reduce travel costs and increase productivity, the more global economy, security concerns, and even the hassle that much commercial air travel has become also are factors in an increased interest in travel alternatives.

The companies that may stand to gain from this renewed interest in video communications are network operators and service providers because telepresence promises not only to drive bandwidth sales, but also to open a new market for managed services that can be wrapped around the technology.

“This is really a big opportunity for the service providers,” said Dominic Dodd, principal analyst of conferencing and collaboration for Europe with Frost & Sullivan. “Telepresence is the classic killer application in terms of its ability to use the network.”

Last year Frost & Sullivan projected that the global market for telepresence would hit $145 million, up from just $55 million in 2006. The company also projected a $1.3 billion market for products and services by 2013. “This year I'm even more bullish about the demand and uptake,” Dodd said, adding that Frost & Sullivan will issue its new forecast within the next few months.

Cisco's own projections are more aggressive. The company expects the industry to realize $4 billion in revenue for telepresence network services alone between 2007 and 2010. The company believes telepresence will fundamentally change how companies communicate.

“Our legacy videoconferencing equipment was utilized about 6% of the time, whereas with telepresence, we're at a 65% average — and that's just for internal use,” De Beer said. “Once you can start using this to connect with customers, partners and suppliers, we think the utilization will jump to close to 100%.”

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