Can You See Me Now?
The Future of Video Conferencing

The following commentary is provided by WiredRed Software regarding the general outlook for business-to-business video conferencing. Additional resources and media contacts are listed below.

A WiredRed Commentary

Business communication has come along way since the advent of the PBX phone system and hand-written messages. The lightening speed of conducting business today requires immediate answers to problems, issues, concerns and more efficient communications overall. One missed call could mean the difference between locking in a new account or losing the deal to your competitor. Cost reduction has driven globalization, telework, outsourcing and decentralized company structures that demand better communications infrastructure. Luckily, technology advancements have risen to the occasion. Boardroom video conferencing, once the domain of Fortune 100 executives, is now available to PC desktop users worldwide. And in the near future, video conferencing will take its rightful place, next to phone, FAX and email as essential business tools.

Before looking at the future, let’s take a quick look at the past. Boardroom video conferencing systems have been around for decades. These were primarily hardware devices, connected in pairs, over multiple leased telephone lines. They evolved and later used standard network connections, though still in pairs over “fixed routes,” or in groups using combinations of fixed network routes or highly specialized switching equipment. The task of digitizing video was so computationally intense, that these devices used dedicated processors for video encoding/decoding and transmission.

That was the past. Today, Moore’s Law recently caught up with this industry. A desktop PC with an Intel Pentium processor is far more powerful than the video encoders and decoders (codecs) of the 1980s and 1990s.

It has been more than 40 years since Intel co-founder Gordon Moore made his now-famous observation. In the April 19, 1965 issue of Electronics magazine, Moore stated that innovations in technology would allow a doubling of the number of transistors in a given space every year and that the speed of those transistors would increase. About 10 years later, Moore adjusted the rate to every two years to account for the growing complexity of chips.

Moore's Law had some profound implications at the time, predicting that computing technology would increase in value at the same time it would actually decrease in cost. In 1965, this was simply a prediction, but after 40 years of technology advancement, both in PC hardware design and TCP/IP networks, not to mention the multitude of standards that are responsible for most of the software and web services available today, we can now say without any hesitation that Moore’s Law has stood the test of time. And there is no better example of this Law than in video conferencing.

Until recent years, business and government had to depend on expensive boardroom conferencing systems that provided little or no real-time collaboration capabilities (e.g., desktop sharing, document mark-up) and were used mainly for executive-to-executive meetings and primarily limited to boardroom studios. These systems were complex to set-up and install, and required dedicated telephone lines (or fixed-route network connections) and only appropriate for those with boardroom access. Because these systems spent a lot of time collecting dust, they did not provide the Return on Investment (ROI) you would expect when spending upwards of $50,000 or more.

Organizations throughout the world are turning in droves – consider the LogiTech announcement that it has shipped 25 million webcams – to services and software that provide all of the functionality of a boardroom system, and more, at a fraction of the cost. What could only be done with a complex, expensive boardroom-quality video conferencing system years ago, can now be done with a standard PC, a high-speed Internet connection and conferencing software that can easily be deployed and managed.

More importantly, this application area, once restricted to sharing two video feeds, has now grown through software advances and the processing power behind Moore’s Law, to include desktop sharing, document sharing, and electronic collaboration as an integral part of the “conferencing” experience. This so-called convergence can provide business, education and government with a multi-purpose application that provides value to nearly every department – from upper management, to human resources, payroll, sales, training and IT/IS.

The value of web and video conferencing is becoming increasingly hard to ignore. The reduction of business travel and associated costs, the ability to meet and interact in real-time with customers, business partners and employees located in other states or countries are just a few of the business and financial benefits. In terms of reducing capital expenditures, some organizations can cut their travel budgets in half, or perhaps more by depending on web and video conferencing to meet, train and provide sales presentations in lieu of in-person visits. The software can pay for itself in a short period of time and be a communications necessity, like the phone and email, rather than a luxury.

As more businesses get exposed to the value of video conferencing, many will explore the full gamut of products and services. Many will quickly determine that consumer products are often designed for unsecure applications, almost always limited to two people, and generally use peer-to-peer connections. Security and two-party limitations aside, the damper for business purposes is direct peer connections, which simply do not work for the 99.99% of business users that are on private IP addresses and behind a firewall (that blocks these types of connections). Seasoned IT managers realize a commercial, not consumer solution is required for multiparty business-to-business video conferencing.

For these reasons, and much more, the future of video conferencing is very bright. The ability for organizations to host their own Internet conferencing application is becoming less costly, along with the cost of the standard PC servers and widely available high-speed Internet connectivity, just as Moore predicted. All told, this makes delivering CPU-intensive applications such as high-quality desktop sharing, multiparty voice and video conferencing available to most every organization, and at all levels.

While there may always be a place for expensive boardroom video conferencing systems, the cost of most of these systems, and the limited features they provide will keep most mid-market organizations from making the large investment they require. As companies seek an affordable, multipurpose solution that allows broader reach to individuals outside of their network, interact on a more personal level, share PC desktop materials, and a more efficient way to conduct hand-on training, video conferencing software will be a better fit for their needs and IT budgets.

Video Conferencing Market Forecast

According to leading industry analyst groups, such as Wainhouse Researchand Frost & Sullivan, much of the increasing market demand for conferencing software and services can be attributed to worldwide economic growth, which will trigger increased IT spending, better system and software interoperability and increased acceptance of the technology itself. From a September 2004 report, Frost estimates that by 2009, web conferencing software and services, including video, voice and data will be a $9 billion industry. Wainhouse Research noted in its 2005 report, “Rich Media Conferencing”, that web conferencing software sales continue to soar with a growth rate of 48 percent in 2004 and a notable movement away from managed services to self-hosted applications.

WiredRed predicts that in the next five years, multiparty web and video conferencing will emerge as a leading communications system, available on most desktops to use on-demand. As companies become more dispersed, with outsourced partners, telecommuting employees and networks of remote branch offices, the need for real-time interaction will become a critical business need. Internet meetings, with multiparty video, will take the place of many meetings that previously had to take place in person.

The applications for web and video conferencing are virtually limitless, and as it becomes a ubiquitous real-time communication application, it will be the standard medium for ad-hoc meetings, training sessions for companies with remote office locations, and the way that engineers, architects and project managers discuss, review and mark-up CAD files and drawings, for example. Overall, WiredRed envisions IP communications, or the combination of real-time data delivery, audio, desktop and application sharing, remote control and video will enable companies, schools and organizations of all sizes to manage increasingly decentralized work forces, campuses, and outsourced critical business functions.

Training, sales presentations and IT support are already commonplace applications for web and video conferencing, but in the next five years, more industries and markets will see the benefits of the technology. Manufacturers, healthcare organizations, engineering and business service providers, and virtually every organization with complex subject matter will be able to actually show conference participants what they’re talking about while marking up files in real-time, rather than emailing large files back and forth.

Sales managers and personnel will accomplish their jobs more effectively utilizing web and video conferencing. Without constant business travel, sales personnel can stay in-house for Internet meetings that provide the same level of interaction in face-to-face meetings and be able to accomplish more and provide quality service to more customers in less time.

Conclusion

The videophone from the future is not a video phone at all, it is your desktop PC, standard audio/video plug-ins, your Internet connection and good conferencing software
Secure, business-to-business video conferencing, designed for 2+ people, is very different from consumer products. The magic is not in the $80 webcam, though amazingly, it can produce quality, full-screen video. The magic is in the routing software, such as that used in WiredRed’s e/pop, which successfully connects multiple users through existing networks and firewalls.
The soaring cost of fuel, travel restrictions, and the need to improve communications response times will drive desktop video conferencing worldwide
For all these reasons, and more, desktop video conferencing will become commonplace in business

The future of web and video conferencing is more than promising. It is part of the evolution of business communications that is already accepted and embraced by organizations worldwide. There is no better reason for the rapid acceleration of its adoption than the common sense reality that the cost of doing business on a global scale requires an affordable, reliable, innovative communication technology that works on standard networks, yet has the ability to reach out to anyone in the world.