Regus picks Polycom for telepresence after Cisco deal fails

Regus picks Polycom for telepresence after Cisco deal fails

There were too many technical problems deploying Cisco TelePresence under a 2007 deal, the office rental company said

Regus, a provider of rented space and service for business, is getting set to deploy Polycom telepresence suites in at least 30 locations worldwide after a similar 2007 arrangement with Cisco Systems fell through.

Regus will rent out the suites for about US$400 an hour to enterprises that need to bring widely dispersed people together but don't want to fly them around the world.

The deal, worth more than $45 million over five years, involves Polycom equipment and Cable&Wireless network infrastructure. The first suite is set to open in London this summer, Regus CEO Mark Dixon said.

The deal came in the aftermath of a high-profile stumble for Cisco's TelePresence Meeting system. Launched in late 2006, it has been the flagship of the company's push for more video in enterprises and homes. When it hit the market with a price tag of $598,000 for two rooms, Cisco's product claimed a more lifelike experience than traditional videoconferencing and put the spotlight on high-definition video meeting systems.

Generically called telepresence, the new meeting technology typically uses large, high-definition displays and audio systems to simulate a real meeting.

In March 2007, just months after the system was introduced, Cisco announced that Regus would set up TelePresence suites in 50 locations around the world. Regus clients and the public would rent these rooms for virtual meetings among the Regus sites or between those suites and other Cisco TelePresence systems.

But the suites were never set up. Cisco's technology ended up being too hard to implement, and Regus was concerned about interoperability with other vendors' videoconferencing and telepresence systems.

"It was not possible to execute, in terms of the equipment," Dixon said. "Maybe too early stage, I don't know." There were "technical hitches and all kinds of hitches," Dixon said, without going into detail.

"For us, it's ease of operation," Dixon said. "We're a normal company. If we have things that are too complicated to execute on and to implement, then in a way, that defeats the object of why you're doing what you're doing. It's to simplify your life, not to make it more complicated."

Dixon described the failed rollout as frustrating. "In the end, we didn't go ahead because life got too complicated. ... We moved on with our lives... We spent a lot of time on it, and it didn't come to anything."

Regus began looking for alternatives immediately, and it worked with Polycom for about a year on the new deal, which was announced last week. Regus is a long-time Polycom customer, having offered videoconferencing systems from the vendor for about 15 years, Dixon said.

Cisco officials were not available to comment. The company has deployed TelePresence at another network of rental suites, located in Taj brand hotels in India and elsewhere.

It's not likely that immature technology sunk Regus's Cisco deployment, because the system hasn't changed much since early 2007, said Wainhouse Research analyst Ira Weinstein. Many telepresence rollouts turn out to be harder and more expensive than expected, he said.

"This is a complicated product no matter who the vendor is," Weinstein said.

There are always special requirements for space, lighting, networking and other aspects of the deployment, though these are especially strict with Cisco's product, he said. For example, in some cases, some companies are surprised by how many modifications they need to make to a room before a telepresence system is installed. But for 80 percent of companies rolling out telepresence, there's no shock factor, Weistein said.

Interoperability is a bigger issue, particularly with service providers like Regus, Weinstein added. The more endpoints they can manage to connect with, the more customers they can attract to a rental suite, he said.

"Every little step away from total interoperability can have a major impact on the value [of Regus's product]," Weinstein said.

Cisco TelePresence isn't based on the H.323 video standard that Polycom and most other systems use, so Polycom does tend to do a better job with a wide variety of videoconferencing systems, Weinstein said. To communicate with H.323 gear, Cisco has to go through a gateway device.

"You may get connectivity, but it's difficult to maintain the telepresence experience," Weinstein said. "The interoperability they have today is a compromise." Cisco is working on improving this, he added.

Regus will be deploying the Polycom RealPresence Experience 210M system, which features a contoured screen 8 feet wide and 4 feet tall, plus high-definition stereo audio and embedded content displays. It supports video resolutions all the way up to 1080p at 30 frames per second and can have ten people on camera at once in each room, according to Polycom. It has a list price of $299,000.

Polycom's telepresence systems can interoperate with all other platforms except Cisco TelePresence and Hewlett-Packard's Halo, Polycom said.

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