Can Cisco dominate telepresence without interoperating?

Virtually everyone engaged in telepresence – service providers, equipment vendors and end-users alike – agrees that interoperability is the next major step forward for this technology.  But while other equipment vendors are working to find ways for their telepresence solutions to interoperate with each other and existing videoconferencing equipment, Cisco Systems (NASDAQ: CSCO) remains content to enable its service provider customers to connect their telepresence solutions over its proprietary equipment.

At Cisco Live two weeks ago, three major Cisco customers – AT&T, BT and Tata Communications – demonstrated that level of interoperability, and a fourth, Telefonica, announced it also has that capability.  In addition, Cisco does offer interoperability with standard videoconferencing systems, largely because of demand from customers, said Erica Schroeder, director of marketing for telepresence at Cisco. Both standard-definition and high-definition videoconferencing systems can be connected to telepresence calls via Cisco’s TelePresence Multipoint Switch.

By contrast, Tandberg (Oslo: TAA)  has introduced the Tandberg Telepresence Server to address interoperability, initially with Polycom, and Polycom (NASDAQ: PLCM) has announced that it is marketing a subscription-based interconnection service through Glowpoint. Both Tandberg and Polycom have said they see interconnectivity as a key aspect to growing telepresence. Industry analysts have speculated from the outset that Cisco wants to dominate telepresence, not share sales with other vendors, but Schroeder cites a lack of telepresence standards as the primary problem. And, she adds, Cisco’s customers are not clamoring for that level of interoperability -- at least not yet.

“Videoconferencing interoperability is a check-box item when customers are looking at telepresence,” Schroeder said. “Most companies have something already installed – whether they use it or not. And they want to be able to include it in any telepresence solution. There’s obviously standards around video – our perspective on that is that we have always been standards-based and will continue to be standards-based. There are not standards yet for telepresence.”

Cisco now has 350 telepresence customers globally with 2300 end points and has continued to grow its business by creating smaller end points that enable even telecommuting executives to connect, Schroeder said.

“We are seeing a wide variety of deployments,” she said. “It depends on the company – they can put a big room system in central locations and get the immersive experience. For smaller companies and people’s offices, and telecommuters, there are smaller systems. We are seeing them put [CTS] 500s in the home of a dedicated work-at-home person or executive who is remote, over a dedicated T-1 or an open high-speed cable connection. If they can get pretty good up-and-down connectivity, the system works fine. We see big customers have deployed room-based systems and augment them with smaller systems, and we see smaller companies start with smaller systems to get rolling and then think about how they deploy further.”