Telepresence: Looking Beyond the HypeTelepresence: Looking Beyond the Hype

(this article originally appeared in the "Real-Time" column of the December 2007 issue of Business Communications Review magazine)

For about a year now, “telepresence” has been the hot buzzword in videoconferencing. Enterprises are being hit by a marketing blitz, led by Cisco, designed to convince them that existing videoconferencing systems are as outdated as black-and-white TV, and that telepresence will both save money and improve productivity. But is there any reality behind the hype? Before getting too far into a discussion of telepresence, it’s worth setting some ground rules. We define telepresence as videoconferencing that incorporates furniture, lighting, camera and acoustic elements that give meeting participants the feeling that they are all in the same room. This means that a telepresence system goes beyond just high definition on large plasma screens, but defines the entire conferencing experience. Telepresence is meant to deliver a natural meeting experience, with multiple cameras to eliminate scanning and permit individuals to look directly at the other participants rather than the camera.

Telepresence eats a lot of bandwidth, typically 1-6 Mbps per screen depending on the product and the desired resolution. HP’s Halo system requires a full T3 (45 Mbps) between locations. Bandwidth isn’t the only concern; latency, jitter and packet loss need to be tightly controlled to minimize quality issues.

But as the term “telepresence” became a marketing buzzword (largely due to Cisco’s marketing efforts), just about every vendor in the videoconferencing space introduced a “telepresence” offering. Here though, numerous differences exist between offerings. Companies such as Cisco and HP set the bar by offering large-screen displays supporting 1080p resolution, the highest-resolution format currently available. Other vendors offer telepresence rooms with slightly lower resolution (720p is typical).

Should enterprises care about 720p versus 1080p? I’d venture to guess that most would be hard pressed to see a difference. Most discussions I’ve read comparing 720p and 1080p note that 1080p is slightly better for fast-motion pictures, such as sports or action movies, which is hardly the typical content in the average teleconference.

Competitors to Cisco and HP, including Tandberg’s Experia and Polycom’s Telepresence Experience TPX offer 720p resolution and aim to compete in two areas: price and flexibility. Whereas Cisco’s and HP’s solutions list for over $200,000 per room, competitors come in at a lower price and offer integration with non-telepresence users. For example, Tandberg’s and Polycom’s offerings enable users of desktop or non-HD room-based systems to join telepresence conferences (though obviously at a reduced quality). Tandberg even supports interoperability with HP’s Halo.

Building the Business Case

Earlier this year we asked enterprises their views on both high definition videoconferencing as well as telepresence. Approximately 51 percent were either evaluating or already planning to deploy high-definition or telepresence systems. High definition video was seen as the logical upgrade to existing room-based systems, but most participants understood that telepresence was something more, and in large global organizations, they were investigating its use.

Given the high cost of initial investment, most enterprises were identifying specific business opportunities for use, rather than considering deployment of telepresence as a general-purpose conferencing solution. Specific examples included the use of telepresence for engineering teams to share detailed images, researchers who needed to share high resolution images during presentations, telemedicine applications including collaboration for physicians, and for graphic designers who needed to share project details including high-contrast color schemes.

These limited examples don’t translate well to a broad market for telepresence, so it’s not surprising that companies like Cisco have touted the ability of telepresence to reduce travel, while also offering tangible benefits in improved meeting productivity, and the ability to impress customers and prospects by using telepresence for sales meetings and product demonstrations, and to improve access for clients to senior executives. In this approach telepresence becomes a substitute for the executive briefing center that most vendors currently use to wow their clients. Cisco noted at a recent analyst conference that approximately 40 percent of all internal telepresence sessions at Cisco were used for customer meetings, a number that had grown from 30 percent a year earlier. Among global enterprises, we found a great deal of interest in telepresence, primarily to reduce travel among senior executives, to improve the overall meeting experience and to reduce an organization’s carbon footprint. High-level executives are drawn to the quality, life-size screens and the actual feeling of being in the same room as those on the other end of the conference. That same experience translates well to organizations looking to impress potential or existing customers. Vendors in the telepresence space are stressing the “luxury” aspect of telepresence, in effect making ownership of a telepresence system a status symbol for the corporate executive.

Calculating ROI

So what’s the payback on these systems? We found that large global enterprises are spending anywhere from $200,000 to $500,000 per room in startup and annual operational costs. By consistently reducing global travel between 2 percent and 5 percent, they can cover the costs of a multi-site rollout in fairly short order, especially as system prices continue to fall. One executive for a global organization told us that even with factoring in the cost of a 45 Mbps connection between locations (T3/E3), he figured the system would pay for itself in a short time by reducing international travel by 2-3 percent.

Again using Cisco as an example (arguably the largest telepresence deployment in the world with over 110 rooms as of September), one executive noted he had reduced travel from over 200,000 miles in 2006, to 110,000 miles in 2007 by adopting policies in which meeting organizers would have to justify why they needed to travel versus make using of a telepresence system.

Calculating productivity from better quality video is more difficult. Anecdotally, I’ve talked to a number of people who have bought into the telepresence hype, stating that the feeling of being in the same room as all meeting participants does provide benefit, at least once folks have a few meetings under their belt and get over the “wow” factor of their first few telepresence meetings. But qualitative benefits are difficult to sell, and difficult to measure. The cost conscious CEO will need more than just “we feel our meetings are more effective” to justify spending hundreds of thousands of dollars.

Questions Remain

Despite all the hype, a number of questions remain about telepresence as a mainstream enterprise technology. Perhaps the biggest question is whether or not telepresence is at odds with the trend toward an increasingly virtualized workforce consisting of a growing number of people working from home, branch offices, or telecommuting centers. If hosting a telepresence conference requires those individuals to travel to a telepresence center, have we made any gains in productivity? Have we made any gains in carbon reduction when individuals must commute to participate in a telepresence session?

Vendors including Tandberg and Polycom address this issue by allowing those using desktop videoconferencing platforms to participate in telepresence sessions, while Cisco argues that the telepresence experience requires physical attendance in the room. Perhaps Cisco has a point: Why invest in telepresence rooms if a large percentage of participants are using standard systems? But the corollary to that argument is “why even invest in telepresence in the first place if the workforce is too distributed to use it?”

The second pressing question is the justification for high-cost telepresence rooms versus more traditional standalone videoconferencing systems. Vendors such as LifeSize (offering high definition at 720p resolution with support for multiple screens) make the case that enterprises need not invest in telepresence rooms to gain the benefits of high-definition videoconferencing. Given that an enterprise can deploy a high-definition system consisting of two screens in a room for less than $20,000 per room, it’s hard to argue that the telepresence experience is worth the additional expense. They also argue that standalone systems provide greater flexibility. It’s much easier to move a codec and a few plasma displays to a new room or facility than it is to pack up a telepresence system and set it up in a new location.

But there is a noticeable difference between sitting around a conference table staring at a screen (or screens) at the end of the room versus sitting in a telepresence environment where the other end of the conference table is the screens. Those who have participated in a telepresence session generally praise the quality of the experience as being far superior to generic videoconferencing, but still, is it that much better to justify a 10x or 20x cost differential?

Conclusion

If the hype over telepresence hasn’t reached your organization yet, it soon will. Evaluate telepresence carefully, asking yourself if your environment can benefit from better conferencing sessions, potentially reduced travel and the prestige of owning a high-definition telepresence solution. But at the same time, ask yourself if it’s worth the cost, and if you can really justify telepresence over basic high-definition videoconferencing systems.

Irwin Lazar is a principal research analyst and program director for collaboration and convergence at Nemertes Research. His blog is called Real Time.