Wainhouse Summit 2010: Why desktops are the future of vcon

The future's bright, the future's on your desktop. That was the message from a volcanic ash-delayed Wainhouse Summit in Berlin last month. In 2009, the videoconferencing market suffered negative growth for the first time in many years (with revenues and units down 4 to 6 per cent), but those at the summit predicted a prosperous future for the technology.

The annual two-day event brings together a range of speakers to discuss the latest developments in the videoconferencing/unified communications industry. This year, Wainhouse Research partner Andrew Davis began the conference with his overview of the industry in 2010, and his insight into where it is headed in the next five years.

Davis values the videoconferencing industry at $2bn (using figures from 2009). This is broken down into $1.5bn for end-points, with the infrastructure market (bridges and gateways) worth $0.5bn, the highest it has ever been.

Others at the summit are not so gushing. Dr Alex Eleftheriadis, chief scientist and co-founder of Vidyo, says the videoconferencing industry was only worth the same as the amount spent on hair, nail and beauty in California, and as such could not be considered a great success.

However, Charles Stucki, vice-president and general manager of Cisco's telepresence systems business unit, agrees with Davis that the sector has huge potential, predicting it to reach up to $10bn in value within the next ten years.

Desktop's promise

Despite the large telepresence systems from Polycom, Cisco, Tandberg and HP dominating the agenda in the past few years, Davis sees the biggest growth potential in desktop systems.

This is not surprising given the cost differential - $300,000 for a full telepresence system compared with $2,000 for HD desktop vcon. What is surprising, however, is that so much focus from the manufacturers - and money, no doubt - has been invested in an area of vcon that made up just one per cent of units sold in 2009 (although the high cost of full telepresence systems means they contributed 18 per cent of the market's total revenue). In fact, so much emphasis has been placed on telepresence that you would be forgiven for thinking the large manufacturers in the sector made nothing else.

Davis says there will be a huge swing from boardroom to desktop systems in 'the future' (see chart overleaf). When pressed to give a definite timescale for this development, however, Davis suggested 'sometime in the next three to five years'. He is wary of giving exact timings, he says, because he once proclaimed 1995 to be 'the year of desktop videoconferencing'.

Davis describes the seismic shift to desktops as not just a case of expensive products being replaced with cheaper systems, or room-based appliances being supplanted by PCs. He says there will be a fundamental change in approach from manufacturers and users because people using personal systems have a different expectation of what the conferencing and collaboration environment should look like. 'When you are using a standard room system, you have to walk to a boardroom, you are dressed appropriately and you expect it to work straight away,' he says. 'When it happens at your desktop, it's like the phone - it's ad hoc. So you will have a different expectation about its reliability, convenience, and it's ease of use.'

He adds: 'The whole support service network and philosophy of desktop video requires a change of thinking for both vendors and the support people. It's not just a change in economics.'

Davis and Stucki agree that vcon could become as integral to desktops as email. This is despite the high initial investment and the demand from corporates for proof of the technology's cost-efficiency. 'Who installed email and justified its deployment against the cost of postage stamps?' Davis asks.

Stucki cites desktop integration as a way to transform the workplace. 'PCs were built to make spreadsheets easier, then people used them to talk.

Communication is what drives productivity,' he says.

All speakers at the summit concur that ease of use and interoperability must be at the centre of all future offerings - something that seasoned observers of this sector will have heard time and time again. At last, however, the big players are not just paying lip service to the sentiment - BT, Tata and several other telecoms companies are debating the best way to build a standard dialling system for all vcon end-points. This may be a relatively small development, but it will ultimately play a significant role in making vcon systems as easy to use as a telephone, which is surely the technology model this sector should be aping.

The market drivers

Davis highlights the five market drivers for videoconferencing, the principal one being the economy. This, he says, is a double-edged sword because while companies are increasingly looking to globalise, at the same time they want to cut their travel costs. This dual factor is pushing sales of audioconferencing, videoconferencing and webconferencing systems to new levels.

Globalisation itself is another driver. Davis and Stucki both point out that Cisco has two global HQs - San Jose in California and Bangalore in India - and the management team at each site needs to collaborate.

Apart from companies such as Cisco having executives scattered all over the world, telepresence sales have also been driven by the heavy snowfall of last winter, oil shortages, the bird-flu scare, the volcanic eruption in Iceland and the threat of terrorism. In other words, businesses have been snapping up vcon systems to improve their business continuity measures.

Another driver is the corporate push toward unified communications.

Cisco, IBM and Microsoft have all been promoting the business case for this to senior executives (although Stucki is keen to let the audience know that Cisco now sees itself as a 'collaboration company'). Yet Davis argues that widespread adoption of vcon would only happen following the development of user-friendly, intuitive interfaces.

The final driver is climate change, Davis says, because people want to work for, and buy their products from, companies with good environmental credentials - and the use of vcon, which reduces the need for business travel, is a part of that. He adds that future government commitments to improve the country's environmental record - by cutting travel, say, to reduce the UK's CO2 emissions - could be a further spur for the adoption of vcon.

Video-managed services, meanwhile, are of increasing interest to corporates. Although they are getting easier to use, videoconferencing systems can still be complicated to run. For sophisticated large-scale vcon systems, companies will want an expert to run them, which is where the av industry can definitely find an opportunity.

Present challenges

Stucki highlights the layout of a typical boardroom as a big challenge for the industry. How can manufacturers and installers solve the problem of supplying high-quality video, where facial gestures are clearly visible, across a long boardroom table? Assuming that the design of boardrooms is not going to change, then the equipment serving it will have to. One solution is cameras with zoom facilities, but that is not without its problems - who will control the zoom, for example, and what happens if two people speak at once?

The final message from the summit is that the rise in acceptance of desktop videoconferencing will be a big boost for manufacturers, integrators and users alike. It will transform the way workers communicate and collaborate. And Davis, concluding with a quote from Charles Darwin, says all parties must be willing to embrace this change: 'It is not the strongest of the species that survives ...

it is the one that is the most adaptable to change.'

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REASONS FOR BUYING VCON

Promises of efficiency and cost savings push the case for vcon

In July 2009, Wainhouse Research asked corporate vcon buyers to define the two main reasons for implementing unified communications. The two outstanding responses were productivity and cost reduction (see chart, left).

Wainhouse partner Andrew Davis says this represented both good and bad news for the sector. He argues that users of vcon achieve greater productivity, but it is hard to prove this. Even harder to prove, he says, are the cost savings. 'We all know that the cost reductions of videoconferencing are usually associated with travel savings,' he adds. 'With unified communications, we are going to have to be a little more creative in calculating the cost reduction.'