Group videoconferencing is accepted as a useful business tool, and the next wave - desktop videoconferencing - is now hitting the marketplace with all the hype that vendors can muster. In Gartner Group's view, technology is, in fact, beginning to catch up with the hype. We anticipate that unit shipments in the real-time collaboration market (this encompasses both traditional and desktop videoconferencing as well as data conferencing, which lets users view the same screen and work on the same document in real-time) will grow exponentially, achieving an average annual growth rate of more than 70 per cent over the next three years.
Gartner Group recently conducted interviews with managers from multiple industries responsible for some of the largest, best-managed videoconferencing networks in the world. The information gathered from these leading-edge users can help increase success rates at all levels of videoconferencing deployment, from the planning phase to maintenance of mature implementations.
Goals and advantages
Executives responsible for videoconferencing universally state the same two objectives for their applications: travel reduction and competitive advantage. Many executives say that videoconferencing results in more-productive meetings and the ability to attend multiple strategic meetings in far-flung locations within a short time span. The CEO of a huge multinational corporation sums up his view of the advantages of videoconferencing by saying: "It is the only way I can be in my office, participate in a European operations review meeting in London, attend a key session of a sales managers meeting in another city, get a presentation from the president of our South American operations in Buenos Aires, sit in on an important strategic planning meeting at our Los Angeles-based subsidiary and be home with my family by 8pm."
Aside from enabling executives to virtually travel the globe in seconds, videoconferencing also helps organisations reduce time to market, accelerate product cycles and improve training. Many companies are also using videoconferencing to enhance communication with external business partners. Although only 10 to 15 per cent of all videoconferencing traffic flowed between enterprises in 1995, Gartner Group expects that number to increase to 20 to 25 per cent by the end of 1996. Major enterprises are making large-volume, blanket purchase agreements and then allowing suppliers and business partners to take advantage of pricing discounts. Some even have policies that force important suppliers to support videoconferencing.
The largest, most aggressive users of videoconferencing do not try to justify the capital costs of their installations based on hard monetary savings; instead, they focus mainly on saving time and other benefits. In the area of recruiting, however, videoconferencing provides significant, quantifiable benefits. Videoconferencing is highly effective for conducting initial interviews of candidates, especially for multinational corporations. Enterprises claim that videoconferencing not only saves money but enables them to hire more-qualified candidates.
Videoconferencing systems are currently segmented into boardroom, fixed high-end and roll-about units. A typical configuration has one or two fixed sites for major corporate locations and roll-about units in other locations (more than 85 per cent of all installed units fall into the roll-about category). When asked if significant configuration changes were expected, all the managers interviewed said that if $7,000 to $10,000 roll-about systems, which are scheduled to debut by early 1997, offer comparable performance to and require less physical space than today's $30,000 medium roll-about systems, they will rapidly deploy multiple units of those videoconferencing systems within their larger facilities.
In 1996 worldwide unit shipments will be two and a half to three times what they were in 1995, with roll-about systems accounting for more than 90 per cent of this growth, according to Gartner Group projections. However, market definitions of fixed and roll-about systems will be meaningless by the end of 1996, when new categories and definitions - such as set-top, desktop, portable, fixed high-end and fixed low-end - will be required to cover the plethora of new products about to hit the market. Companies should weigh business needs when deciding whether to delay videoconferencing investments until these products appear. If payback can be achieved in a few months, Gartner Group recommends forging ahead now.
The managers we interviewed, all of whom had sophisticated deployments, identified key application categories and their success factors:
Ad hoc or crisis use. To be effective on an ad hoc basis or during crises, a videoconferencing system must have high availability and reliability. It must also offer additional audio-bridging capabilities.
Management. Using videoconferencing effectively for management depends on the ability to support existing handouts and graphs, ease of use and audio quality (minimal delay time, high fidelity and full duplex, or the ability to transmit and receive simultaneously). Video quality turns out to be much less important.
Engineering. Managers that rated engineering as very important considered document and screen-sharing - or data conferencing - their top requirement. All said that desktop video- conferencing using installed workstations will be more effective in supporting engineering than group videoconferencing systems.
Sales and marketing. Managers who rated this category as very important insisted that they are not actually selling via videoconferencing but supporting complex sales. Audio quality again emerged as the number-one requirement.
Recruiting. Key success factors are minimal audio delay and high video quality.
Distance learning. Due to the acoustical challenges of use in large auditoriums, audio was also the top concern in this category. It was followed closely by simplicity in bringing up classroom materials with electronic annotation.
There are a number of hurdles in effective videoconferencing deployment, and scheduling tops the list. The managers surveyed unanimously agreed that scheduling multipoint videoconferences - those involving participants at more than two locations - is the most difficult hurdle. Many organisations lack company-wide access to the electronic scheduling system; in other cases, office politics in room scheduling are as much to blame for problems as the equipment. In addition to coordinating conference participants' schedules, companies also must arrange for telecom service providers to do the necessary switching and bridging at the appropriate time.
Naturally, videoconferencing is only as reliable as the network on which it takes place, and more than half the managers surveyed expressed disappointment with network service providers. Their complaints focused on poor availability during a crisis and security concerns. The need to rely on service providers to link participants in different locations leaves many executives understandably worried about security. In one case, a service provider setting up a high-level strategy meeting caused a moment of panic when it switched into an incorrect site at another company. A significant emerging trend - moving to very small (three- to four-port) multipoint control units that are totally integrated and embedded with group systems - will alleviate many of those issues. Such units, which allow companies to set up their own conferences among three or more locations, simplify internal scheduling and eliminate the inherent risks of depending on a third-party provider to set up - and perhaps monitor the quality of - the connections.
Almost 80 per cent of worldwide videoconferencing systems run at bandwidths of 384Kbit/sec or less. When asked about future plans, all managers interviewed stated they are running at 128Kbit/sec and would switch to 384Kbit/sec for the majority of their systems in the next two years. That upward trend is typical of the group videoconferencing market as a whole.
All managers surveyed rely on H.320 specifications, a family of videoconferencing standards that enable dissimilar videoconferencing systems on switched digital circuits, such as ISDN, to communicate with one another. In addition, a majority will support the T.120 series of specifications for multipoint, real-time data conferencing across a wide variety of systems and communications links. T.120 has strong support from Intel and Microsoft. In the future, more and more new units are expected to support both standards.
As for plans to mix different vendors' equipment, there was consensus not to do so until 1997, when, most managers believe, H.320 specifications will be robust. Enterprises should assume single-vendor deployment of videoconferencing systems through 1996; by 1997, however, H.320 specifications will have matured sufficiently for enterprises to mix and match vendor equipment.
Since all of the managers interviewed have sophisticated videoconferencing deployments, they reported heavy use of peripherals, which include document cameras, scanners and integrated fax systems. T.120-based ancillary equipment began to hit the market in mid-1996, so peripheral-device support is now the biggest factor differentiating group videoconferencing products. Instead of needing separate products to enable videoconferencing and data conferencing, companies will be able to choose one that does both. Enterprises should select only vendors with clear T.120 implementation plans.
All of the enterprises surveyed rely on a combination of public and private networks. Future plans include using public networks worldwide, which is consistent with overall market trends.
A majority of managers interviewed say they expect satellite videoconferencing to increase. They are preparing for full digital up-and-down links, primarily for economic reasons. Many enterprises plan to implement both video and high-speed data communications support via digital satellite by the end of 1997.
Videoconferencing use is enabling many enterprises to rack up impressive success stories, contributing to greatly improved time to market and faster, more effective decision making by top executives. The new generation of economical videoconferencing systems will enable many companies to justify establishing videoconferencing links with small branches and offices. Enterprises that have previously rejected or limited purchases of videoconferencing systems based on high capital costs should re-evaluate such systems.