Cisco looks to push high-end IP video

High-definition video conferencing technology is touted as a slasher of travel budgets, promoter of face-to-face contact.

Cisco this week is expected to launch its long-anticipated video communications technology - a combination of life-size displays and high-definition IP video designed to let customers replace in-person meetings with long-distance virtual powwows.

With the technology costing $250,000 a room and requiring 15Mbps of bandwidth, however, it remains to be seen whether only the largest companies have the budgets and capacity to embrace it. Some industry watchers say telepresence products will never get beyond being a niche IT luxury for a rarified group of executives. Plus, Cisco is entering the market almost 12 months behind other telepresence competitors such as HP, which already has claimed customers PepsiCo, Dreamworks and chipmaker Advanced Micro Devices.

Cisco CEO John Chambers has hinted about the company's telepresence effort over the last nine months in interviews and at industry events.

"Video communications is the most effective way to communicate," he said at the Interop Conference in Las Vegas in May. "If you ask me what excites me the most . . . I'll say it's telepresence - the ability to interface with customers [all around the world] in a way that's not just about videoconferencing."

See related stories: 'Virtual Margaret' supports San Jose-based Cisco VP from Texas via telepresence

HP and Cisco travel separate paths to high-end, high-speed video communications

He is excited specifically about the Cisco TelePresence 1000 and TelePresence 3000 systems, expected to launch this week. The high end of these multicomponent packages has three 65-inch high-definition plasma displays, an appliance that combines a high-resolution IP video camera, echo cancellation, four-channel IP audio- and IP video-encoding hardware and software, and network connectivity.

Cisco's TelePresence

The 3000 system even includes a specially built half table, designed to look like a large oval ring when it's combined with the plasma screens, which show an identical setting on the other side of the conference room. Cisco also has specifications for the room's background color and lighting.

"We're even in the furniture business now," says Randy Harrell, director of product marketing for Cisco's TelePresence group, which is one of the company's Emerging Technologies business units.

"This is not something you really want to put in the same class as videoconferencing," says David Willis, an analyst with Gartner, who has seen Cisco's and HP's telepresence offerings "First off, it may actually work in displacing meetings. Secondly, it's a much bigger investment to pull it off."

For companies willing to spend and build the infrastructure to support telepresence, however, the experience is impressive, he adds. "If [telepresence] is designed and implemented properly, you really can have a quality meeting without any second thoughts about the tech being there."

Two HP Halo rooms are running in the Sunnyvale, Calif., and Austin, Texas offices of chip-maker AMD. Four more rooms are scheduled to come online domestically and abroad this year. Since the technology was deployed almost a year ago, usage has taken off among senior executives and engineers at the company, according to Linda Starr, corporate vice president of worldwide sales and marketing at AMD.

"The benefits have been so great that there hasn't been the normal demand for us to justify the technology" dollar-wise, says Starr, who initially promoted the technology inside the company after seeing a demo of Halo from AMD customer Dreamworks, which co-developed the technology wth HP. "There are certain hard dollar benefits -- not flying someone to China, for instance. What we're struggling to quantify are the soft benefits: the wear and tear on people that's eliminated by not having to fly; what that takes out of a person."

AMD's president Dirk Meyer, conducts performance reviews over the Halo system with his key reports. Interviews for senior positions are held over Halo. Negotiations and contracts worth million of dollars are hammered out in Halo rooms.

The high-quality experience is what makes the technology in high-demand at the company, Starr says. Even if it sometimes causes minor embarrassments as people get used to it.

"We've seen people get up and try to shake hands across the table, forgetting they're in two different places," Starr says. I actually did that one time, and got into a discussion about where we were going for lunch" with the party on the other side of the Halo conference.

The TelePresence systems come with a Cisco CallManager IP telephony server, used to administer the system and control the setup of TelePresence sessions. The in-room interface for setting up a meeting is a Cisco IP phone, attached to the CallManager. Cisco says the CallManager platform also enables integration with Microsoft Outlook and Lotus Notes, which can be used to schedule room times and send e-mail or voice mail reminders to meeting participants.

Cisco says it has designed a video codec that compresses the three 1080p video streams and four audio channels into a 10M-to-15Mbps IP data stream. Cisco says the system's network latency is less than 250 millisec, which is the limit for perceptible levels of network delay for images and video.

The company has identified 25 channel partners including Dimension, NexusIS, Presidio, World Wide Technology and others authorized to offer the TelePresence systems, which include services such as on-site network assessments to ensure the data infrastructure and carrier services can support the technology. (Cisco describes the setup of the system as a two-day process. Partners AT&T and Verizon provide bandwidth services for TelePresence systems, based on metro Ethernet last-mile services, and MPLS core services for transport.)

Cisco says the system uses standard protocols, such as Session Initiation Protocol for session setup and transport. The Interactive Connectivity Establishment, a proposed industry standard supported by Cisco and Microsoft, lets separate businesses with a TelePresence system establish Internet-based connections securely through corporate firewalls without adding latency to the traffic stream.

Building the TelePresence technology was a two-year, multimillion dollar development effort involving more than 100 engineers - about 40 of whom were hired from outside the company. Cisco says all system components were developed and built in-house; it had to hire to account for its lack of expertise in acoustics, cameras and high-definition plasma display manufacturing.

Cisco's TelePresence product will compete with products from traditional video conferencing vendors, such as Polycom and Tandberg. The competitor Cisco will most likely butt up against is HP with its Halo telepresence offering, which was launched last year and has more than 60 installations with 12 customers.

Executives from vendors that make telepresence their only business, and have been in the market longer than HP and Cisco, say these relative newcomers don’t bring the deep video and conferencing background to the market, and only make products designed to be deployed at a few sites.

"Compared to HP Halo, our product line is much broader and allows telepresence to exist deep within the organization and not only at the executive level," says Marc Trachtenberg, CEO of Teliris, which makes conference room telepresence systems. One Teliris customers, drug maker GlaxoSmithKline, has 15 units installed in facilities worldwide. "Cisco will have its place in the telepresence market, [but] their system is clearly a first-generation appliance-like product," he says.

HP's Halo approach is similar to Cisco's - oversized plasma TV screens replace people at a conference table, and real-time interaction is delivered via IP audio and video streams. HP's approach to telepresence is more service-focused, however. With the Halo Video Exchange Network (HVEN), bandwidth services are provided by carrier partners selected by HP and specific to the regions where Halo customers are located. A larger pipe is required - a dedicated 45Mbps T-3 link. Rooms cost as much as $425,000 to set up for Halo, and an $18,000 per-month service fee is required. (HVEN includes language interpreter services.) Halo's video display is 720p in resolution.

The system supports multipoint telepresence meetings, where as many as three locations can be linked into the same meeting - a capability Cisco says it will have next year.

"We're trying to carve out a space at the highest end of the telepresence market," says Ken Crangle, general manager of HP's Halo business. "Given what we wanted to do, and what we had in terms of latency and quality of service characteristics . . . there wasn't really a way to do that over the public Internet."

Crangle says HP's proprietary codecs and protocols and service-based approach solve the issues of linking across corporate security boundaries and ensuring the low-latency bandwidth the system requires.

"Telepresence is definitely a cool technology, and I do think Cisco and HP are on to something," says Ellen Daley, an analyst with Forrester Research, who was shown a demo of the Cisco product. "But this is way more costly than getting a standard video conferencing system set up. It will be a niche technology for those top executives in big enterprises, who feel it will be an investment [not just to] save on travel, but to promote more face-to-face interaction."

Analysts don't expect telepresence products to be a large-volume business for Cisco.

"At $250,000 a site, you don't have to sell too many of them to have a good business," Gartner's Willis says.

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