Telepresence, Effective Visual Collaboration and the Future of Global Business at the Speed of Light
By Howard S. Lichtman Human Productivity Lab August 2006

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Telepresence, Effective Visual Collaboration and the Future of Global Business at the Speed of Light

Table of Contents
Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Effective Inter-Company Business . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Understanding the Hard, Soft, and Opportunity Cost of Physical Travel on Senior Executive Time: . . . . . . . . . . . . 5 Why Traditional Videoconferencing Fails to Deliver the Goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Telepresence — What is it and Why Does it Cost so Much Money? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 So Why Does Telepresence Cost So Much Money? . . . . . . . . . . . .9 The Importance of Creating Social Connections . . . . . . . . . . . . . 10 Types of Telepresence Solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Headends- Content Will be King . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Delivering Telepresence and Effective Visual Collaboration: The Telepresence Tool Kit. . . . . . . . . . . . . . . . . . . . 15 The ROI of Telepresence and Effective Visual Collaboration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Measuring and Understanding Telepresence and Effective Visual Collaboration Usage . . . . . . . . . . . . . . . . . . . . . . . . 24 Business Effectiveness — Increased Utility, Greater Productivity, and Improved Outcomes . . . . . . . . . . . . . . . . . . . . . . 24 Hard Dollar Travel Avoidance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 The Decline of the Dollar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Summarized Hard and Soft Dollar ROI and Intangible Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Telepresence Buyers Guide . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Understanding the Total Cost Ownership and Acquisition Scenarios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 End-to-End Managed Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Custom Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Appendix B: Sponsoring Vendor Marketing Material . . . . . . . . . . 52 Capitalize or Lease? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 About the Author . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 About the Human Productivity Lab . . . . . . . . . . . . . . . . . . . . . . . 41 Bibliography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Appendix A: Telepresence Company Profiles . . . . . . . . . . . . . . . . 44 Accelerated Adoption for Economic and Geopolitical Reasons. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Outsourcing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 The Higher Costs and Reduced Convenience of Physical Travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Dramatically Higher Oil Prices — Peak Oil, Natural Disasters, Terrorism, Expanded War in the Middle East or All of the Above. . . . . . . . . . . . . . . . . . . 38 The Interconnection of Effective Visual Collaboration Networks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Publicly Available Telepresence Systems . . . . . . . . . . . . . . . . . . . . . 33 Small Office/Home Office (SOHO) and Consumer Telepresence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 The Rise of the Virtual Organization . . . . . . . . . . . . . . . . . . . . . . . 34 Better and Cheaper Telepresence Solutions . . . . . . . . . . . . . . . . . 34 Distance Learning Will become a Key Telepresence Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 The Future of Telepresence and Effective Visual Collaboration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Teliris Global Table

HP Halo Collaboration Studio



“The future is already here. It’s just not very evenly distributed.” — William Gibson Over the next decade, virtually every major Global 5000 company will adopt a technology allowing them to interact with people, no matter how far away, as if they were in the same room. The technology is called telepresence, and a variety of Fortune 1000 organizations already use it, reporting both satisfaction and a strong return on their investment. Telepresence meetings make remote participants life-size, with fluid motion, accurate flesh-tones and flawless audio. The experience feels remarkably natural and comfortable for almost any size meeting from two people to large classrooms. Telepresence solutions are easy to use and surprisingly handy for collaborating on spreadsheets, slide decks, documents or even physical objects with minute details. Specialized telepresence solutions for specific industries already exist for settings as diverse as pharmaceutical research labs, movie and television studios, university-level distance learning, and neurological operating rooms. Soon enough, executives and the affluent will equip their homes with telepresence capabilities, while everyone else will be able to rent a telepresence system in a hotel, mall, restaurant or pub. Within a decade’s time, you won’t think twice about having a virtual business meeting (or virtual dinner) with participants from Baghdad, Tokyo, Milan, or all three cities simultaneously. While this paper focuses on the current global corporate usage, ROI, main players, and future of telepresence, it barely scrapes the surface of the impact the technology will have on society. Telepresence will ultimately produce good, bad and unintended consequences as it revolutionizes the way the world communicates. Already it’s made a mark, and that impact will keep growing in ways we can only speculate about at the dawn of its inception: • It will continue to accelerate commerce, globalization, outsourcing and the creation of wealth • It will dramatically impact the airlines, hotels, global network providers, financial markets, advertisers and Hollywood • It will continue to revolutionize, among other things, global corporate governance, gaming, education, entertainment, medicine, diplomacy, home schooling, politics, warfare and pornography • It is and will continue to expand the places where knowledge workers can live and work while simultaneously shrinking the world around them It will be a trip . . . Best, HSL Howard S. Lichtman President, Human Productivity Lab

This paper focuses on a group of revolutionary visual collaboration technologies called telepresence. In the spirit of full disclosure the author sits on the informal and unpaid Board of Advisors of telepresence provider Digital Video Enterprises and was the former Vice President of Business Development at TeleSuite Corporation (now Destiny Conferencing). This paper was sponsored by the following companies: ATK Services, Destiny Conferencing, Digital Video Enterprises, HP, MedPresence, Polycom, Telanetix, and Teliris.

Telepresence Conferencing Defined
Telepresence is the science and art of creating visual conferencing environments that address the human factors of the participants and duplicate, as closely as possible, an in-person experience. Telepresence greatly improves end-user acceptance, which dramatically increases usage and substantially improves demand, ROI and customer satisfaction. While a variety of methods can be used to deliver telepresence solutions, they typically offer some combination of the following improvements over the “talking heads” experience of traditional videoconferencing: • Life-size participants • Fluid motion • Accurate flesh tones • Studio quality video, lighting and acoustics • The absence of visible technology • True eye contact, or the approximation of eye contact in large group settings • Immersive and/or mirrored environments where participants feel as if they are in the same physical space • A consistency-of-quality between disparate locations.

Destiny Conferencing / Polycom RPX 400 Series


Telepresence, Effective Visual Collaboration and the Future of Global Business at the Speed of Light

Executive Summary
At its core, business is about face-to-face relationships. Whether those relationships are between a board member and corporate officer, salesperson and client, or partners in a joint venture, effective business communication remains a combination of understanding, mutual advantage and trust best exercised eye-to-eye between the main participants. For decades, business has relied on commercial air travel to bring together the main players. Unfortunately, commercial air service continues to deteriorate (flight delays, mishandled bags and consumer complaints were all up in 2005i ), and last year alone a record five airlines declared bankruptcy, including mega-carriers Northwest and Delta.ii Reduced competition and record fuel prices promise more problems in the future. Compounding the problem, the Federal Aviation Administration forecasts a 45 percent growth of commercial passenger volume to one billion passengers annually by 2017.iii In the same time period, the FAA estimates that the private aviation jet fleet will double in sizeiv, putting further pressure on an already strained capacity. An article in the May 21, 2006 New York Times assessed the state of the industry: “Planes are expected to be packed fuller than at anytime since World War II, when the airlines helped transport troops. Fares are rising. Service frills are disappearing. Logjams at airport security checkpoints loom as the federal government strains to keep screener jobs filled. The usual violent summer storms are expected to send the air traffic control system into chaos at times, with flight delays and cancellations cascading across the country. And many airline employees, after years of pay cuts and added work, say they are dreading the season ahead.Those workers — and there are about 70,000 fewer of them than in 2002 — will be handling more than 100 million more passengers this year than they did four years ago. The friendly skies, indeed.” Meanwhile, business continues to globalize, further increasing the length, expense and hassle of both private and commercial aviation in managing international operations. The 19-hour flight from New York City to Shanghai runs $2,300 for a 21-day advance coach fare; a 7-day advance business class ticket costs $9,500.v As commercial and executive aviation slows down, the speed of business accelerates. The instantaneous nature of e-mail, webconferencing, and instant messaging have reset expectations of turn-around times for decisions. Waiting days or weeks to huddle the team doesn’t cut it anymore. The need to improve productivity and time-to-market advantage becomes even more paramount in the face of nimble international competitors who compete with third world labor costs and first world technology.

Many thought that traditional videoconferencing would solve the problems of establishing face-to-face collaboration. However, the technology has failed repeatedly to satisfy end-user expectations. Though videoconferencing has moved from ISDN networks to IP, displays have gotten larger and better, and video codec resolution has improved significantly. The average usage of videoconferencing remains moribund at an abysmal 15 hours per month during a time of globalization, increasing costs and inconvenience of physical travel, and the general speed of business Many videoconferencing users complain that talking to the “camera-on-the-TV-set-on-the-dessert-cart” is uncomfortable and unnatural. The audio is often poor, the lighting wrong, colors off, resolution bad, format artificial, controls complex, collaborative tools weak and overall experience meager. Consequently, traditional videoconferencing is often the option of last resort, and even then almost always internally, and almost never for important meetings or with customers or partners. Telepresence has dramatically improved the usage and acceptance of visual collaboration by addressing the human factors of participants to create a more natural, productive and realistic experience. Unlike videoconferencing, telepresence works at any scale, from the desktop to small groups to distance learning classrooms to neurological surgical education. Quite simply, telepresence lets users feel as if they are “present” in the same physical space with others who might be thousands of miles away. The experience is natural, comfortable, easy-to-use, supremely collaborative and as different from traditional videoconferencing as the space shuttle is to a commercial airliner. Where traditional videoconferencing systems average 15 hours per month, adopters of telepresence group systems report revolutionary usage between 60 and 275 hours per month. Internally, these solutions reduce travel for intra-company business, improve productivity and reduce wear and tear on road warriors. More importantly, most telepresence solutions provide a meeting experience with a “business-class consistency-of-quality” between different organizations on the same network while simplifying how they connect to and securely collaborate with partners, vendors, investors and customers. This ability to effectively conduct global inter-company business will be, without a doubt, the “killer app” of the 21st century, and an application with potential for the same exponential growth that characterized telephony, the Internet and other communication networks. As more and more organizations join telepresence and effective visual collaboration networks, costs will drop, utility will rise and the benefits of being connected will drive exponential adoption. The future of business will be the ability to cost-effectively leverage your knowledge workers around the world wherever their geographical location, connecting them instantly with a lifelike experience and providing familiar and contextual tools to easily collaborate with colleagues, partners, vendors and customers. This experience will be as natural and comfortable as if everyone was in the same room.


.350 actual air miles apart as the crow flies. Bristol. And let’s not forget the most overlooked cost: the opportunity cost of doing whatever it is you would have been doing while you and your team are out of the office. and Los Angeles. lost productivity. in transit and/or jet lagged. Soft and Opportunity Cost of Physical Travel on Senior Executive Time Understanding the Hard. but you can’t since the G IV’s range is only 4. Now he was looking for telepresence solutions that would allow the company to leverage its talent around the world without extensive physical travel. hotel rooms. etc. . are 5. in transit and/ or recovering from a trip. . delayed/cancelled flights and the opportunity cost of being trapped in a flying aluminum cylinder 40.Understanding the Hard. or wedged into a middle seat in the steerage section of a commercial 747. • That makes the total flying time 12-13+ hours minimum trapped in the flying tube. multiplying the chances of a delay or missed connection. the cost of the executive’s time while in transit. jet lag. . When I was with TeleSuite Corporation we once received a call from a senior technologist at a Fortune 1000 company whose CEO was: “Sick of Flying Around on his Private Jet” If you really think about it. the hard costs: Airline tickets/executive aviation. I’d learn more of the specifics: The CEO spent hundreds of hours flying between Los Angeles and Bristol. Much of the pain of physical travel is the same: Time away from the family and friends. rental cars. California. Oppor tunity Cost A term used in economics to describe the often hidden cost of choosing one course of action over another. The opportunity cost is the cost of the next best alternative use of the same time and resources. the lost productivity of being inaccessible to colleagues and away from information and corporate resources. I had just joined TeleSuite as a new employee when this company called and had only heard the generalities of the CEO’s pain from the other members of the executive team. • . Each Way! • Flying commercial would take 16 to 19 hours if the gods of travel smile upon you.350 Nautical Miles. it doesn’t matter if you’re relaxing in the sumptuous leather seating of the $25MM Gulfstream IV that this particular CEO is reported to own. Still.. dining. The opportunity cost of physical travel is the value of what could be accomplished during the time spent preparing for. were the costs and pain of physical travel really bad enough to merit betting millions on deploying telepresence? Let’s crunch some numbers on the situation and see: 5 . Later. so you’ll need to tack on another 2 hours minimum for landing and refueling. • I wasn’t able to find any flights between Los Angeles and Bristol with less than two stops each way. England in a single year to complete a multi-million dollar project and cement what would become a very profitable ongoing collaborative relationship with a strategic par tner. UK. Soft and Opportunity Cost of Physical Travel on Senior Executive Time The expense of physical travel can be measured in several different ways: First. • Flying at the G IV’s recommended long range speed of 452 knots or 521 mph makes the flight 10 to 11 hours if you fly non-stop . car services and taxi cabs. Then the soft costs: The wear and tear on personnel.000 feet above the ground.

475 an hour on the OmniJet Trading Website) and the cost of ownership really starts to climb. So. while road warriors suffer the physical and mental pain of physical travel. • That brings the total estimated annual budget for flying the G IV 400 hours a year (or 16 round trip flights between Burbank and Bristol) not including aircraft purchase price or lease payments to $1. . shareholders pay an even higher price in addition to the hard and soft costs of executive aviation and the employees’ time. and employees). developed. managers and employees trapped in an aluminum tube for hundreds of hours a year. The hidden cost of physical travel is that often overlooked opportunity cost of keeping the executive team. the back-of-the-napkin calculations on the monthly payments for a 60-month lease of the $34 MM G 450 with a $1. Assuming a CEO works 50 hours a week (probably a fair estimate given the responsibilities of running a Fortune 1000 company) and takes three weeks of vacation a year. the base replacement cost of its upgraded replacement the G450 is $34 MM. Completing the exterior and cabin can add $3-5MM depending on the options. airframe and engine maintenance. charts.000 or $3. add the Annual Fixed Costs that OmniJet estimates at $540. According to the Economic Policy Institute. transported. managers. and especially inconvenient for families. • Next. the average total compensation for a CEO in 2005 was $10. • Assuming the aircraft are leased for the tax advantages.982. hangar costs. project managed. • Tack on the direct operating costs of the G IV including fuel.244 (and we haven’t even touched on the cost for the rest of the executive team. Steve Reinemund. • Even bargain hunting in the “previously owned” section of the lot is almost as expensive. the true cost of keeping employees up in the clouds are the lost profits from the products and services that don’t get researched. distributed. manufactured.000. has announced a goal of replacing the time that employees spend traveling internally with time spent meeting with customers and prospective customers. stressful. Jetlag. The example seems starkly illustrative of the opportunity cost concept and the benefits of reducing avoidable internal travel. One 2001 G IV in Las Vegas recently listed for a fire-sale price of $28MM with “MAKE OFFER — MUST SELL!!!!” emphasized in the ad.44 an hour. 6 . recognized.00 buyout are over $670K a month. Let’s assume that physical travel takes the same toll on CEOs as it does on other mortal men. the CEO and Chairman of PepsiCo and an HP Halo customer. training and modernization. or more than the $3. Many CEOs are already wealthy and if they ever tire of hauling themselves around the world. . Travel is hard physically. tested. jetlagged or in-transit between locations. And we haven’t even touched on the direct cost of the CEO’s time . loss of momentum and an expensive Heidrick and Struggles search.Telepresence.584. catering and landing fees (estimated at $2. his direct employment cost to the company is around $4482. Effective Visual Collaboration and the Future of Global Business at the Speed of Light Now let’s look at the money involved for executive aviation: • While Gulfstream discontinued the G IV in 2002. Put quite simply. • The G550 is $45 MM. they can take all their chips. insurance. inventoried. and generally moved along through the process as quickly when the team is airborne. Factor in a loss of 100 hours per year of productive work in the case of our 200 hour frequent flier and the hard cost of the lost time attributable to physical travel in the cost of employment alone in this one example is $448.000 a year including crew salaries. take-offs/landings and the need for food and sleep leaves them with 50 percent of their time in the air for getting any work done.935 an hour cost in Direct Operating and Annual Fixed Costs for 400 hours of flying time. billed.935 an hour. • That $34 MM is the base cost for unpainted “green” planes with unfinished cabins. Potential lost revenue to the company: staggering. go home and leave the board of directors to deal with investor uncertainty. sold.

Instantaneous. while the cost of group videoconferencing systems have declined dramatically. as well as hear them — well. There was only one problem with the traditional videoconferencing provider’s calculations: “But our videoconferencing end-points are averaging more than 15 hours per month?” Organizations that use traditional videoconferencing more than 15 hours per month typically do so because: • They’ve applied videoconferencing industry “best practices”: Dedicated QoS IP networks. and the pace of business has accelerated? Traditional videoconferencing’s ugly little secret: Many people don’t like the experience and prefer not to use it. Tom! It can’t be done! I admit that you’ve made a lot of wonderful things — things I never dreamed of — but this is too much. 1914 The first mention of electronic visual communications I’ve ever seen is in “Tom Swift and his Photo Telephone. While some organizations do see higher usage. good user training/IT support and improved ease-of-use through programmable graphical user interfaces • Top down mandates curtailing business travel and/or requiring employees to use videoconferencing • Low ratio of videoconferencing end-points to employees Since no one really liked traditional videoconferencing very much. desktops and living rooms of the world. travel has become more difficult. I should be sor ry to see you waste your time trying to invent such a thing. graphs and even interactive tools that promised substantial hard-dollar ROI based on avoided travel between a company’s internal locations. and allowing communication between multiple parties in multiple locations. “The Picture that Saved a Fortune. and meetings with partners. Traditional videoconferencing systems have seen dramatic improvements in screen resolution. audio quality.” seems especially apropos given the multi-billion dollar stakes in the coming battle to connect the conference rooms. especially important meetings where relationships are formed. When corporations do use videoconferencing. the threat of terrorism has grown. they didn’t view it as an alternative to an effective in-person meeting. it pales in comparison to the demonstrated usage of telepresence and effective visual collaboration solutions. usage of traditional videoconferencing group systems averages 15 hours per month per end point. and didn’t use it nearly as often as the providers projected. where body language is as important as what is said. proper environmentals in lighting and acoustics. It has steadily improved in capability and functionality. not limited by geography. so that persons cannot only see to whom they are talking. it is internally. clients or prospects? Why has videoconferencing’s average usage per endpoint per month barely moved even as globalization has increased. For years the traditional videoconferencing industry produced a variety of spreadsheets. to be frank with you. Tom. higher bandwidths. 7 . security and ease-of-use. To transmit pictures over a telephone wire. According to Wainhouse Research. The book’s alternate/subtitle. with colleagues only or because there isn’t another option. So why does it fail to deliver year after year in connecting the world? Why are only a small fraction of meetings done over videoconferencing. reliability.Why Traditional Videoconferencing Fails to Deliver the Goods Why Traditional Videoconferencing Fails to Deliver the Goods “It can’t be done. videoconferencing should be a “slam dunk” for business communications.” published in 1914 by Victor Appleton. Some companies in the field estimated additional soft-dollar benefits from improved productivity. an analyst firm that follows the conferencing industry. when AT&T built its first Picturephone test systemvii. but users haven’t exactly universally embraced it. Videoconferencing has been around since 1956.” — Barton Swift to his son Tom Swift in Tom Swift and his Photo Telephone.

limited body language visible. objects to this conflict and. immersive “Life Size” visual experience. and a combined horizontal field of view of about 180-200 degrees. poor audio. the observant experience itself: the obvious TV set. etc. the delay. it is actually more important to address the horizontal field of view and peripheral vision. • The Medium (i. resists the experience. LifeSize Communications. which makes a superb high-definition camera and codec. In my experience working with such systems and talking with psychologists. As a result. Telepresence providers achieve this with multiple. However.).e. Effective Visual Collaboration and the Future of Global Business at the Speed of Light The Observant Videoconference Experience In trying to replicate the experience of a face-to-face meeting. quite naturally.viii In achieving a realistic. should be focused in the opposite direction: 8 . the poor audio quality. traditional videoconferencing fails the human brain’s smell test (tiny remote participants. large format displays and video walls. humans have a forward-facing vertical field of view of between 120 and 135 degrees. I believe that it also causes fatigue as the brain tries to process and adjust to two different experiences simultaneously: Traditional Videoconferencing Companies Going in the Wrong Direction The logo of high-definition videoconferencing provider Life-Size Communications (whose website refers to its set-top videoconferencing solution as “telepresence-like”) unintentionally crystallizes one important way videoconferencing goes wrong. the 8-inch tall remote participants.e. jerky motion.) The brain. productivity and ROI suffer. the unnatural format. no eye contact. the visible camera. The LifeSize logo seems to suggest that the key to achieving a more realistic experience is by increasing the size of the image in the vertical plane. etc) • The Content (i. consciously or unconsciously. etc. what is being said. the body language of the participants (if visible).Telepresence.

gestures.000+ per month. an organ with hundreds of millions of neurons devoted to vision. PricewaterhouseCoopers. Studies have shown that both comprehension and retention are improved when you see information in addition to hearing it. early adopter customers such as AOL. some behavioral psychologists believe that 70 percent to 80 percent of communication is non-verbal xii: facial expressions. Karl Eller. 3COM.000. and suppor ted by innovative. It’s more expensive. Telepresence solutions from HP and Teliris can run north of $10. Flying in the face of the conventional videoconferencing wisdom of the time — stack em’ high and sell em’ cheap — TeleSuite Systems cost (and still cost) hundreds of thousands of dollars per room. posture and eye contact. the company’s product averaged 60-130+ hours per month. per site.500 a piece and their true eye-contact. naturally and often subconsciously for a richer understanding of what is being communicated than through speech alone. and Cigna. xi Over your lifetime. TeleSuite Co-founders: David Allen and Herold Williams This end-user acceptance didn’t come cheap.Telepresence – What is it and Why Does it Cost so Much Money? Telepresence — What is it and Why Does it Cost so Much Money? About a decade ago. with thousands of dollars more in monthly charges per location for private network connectivity. support and maintenance. immersive experience of telepresence improves the quality and quantity of visible non-verbal communication. Herold Williams and David Allen wanted to give their well-heeled guests an effective way to conduct business without having to leave their little slice of paradise. To more closely replicate an in-person meeting and “trick” the brain into accepting the experience. The retina and optic ner ve are actually outgrowths of the brain itselfix. Visionary Telepresence Investor Karl Eller 9 . which the brain processes quickly.000 dollars for a dedicated desktop videoconferencing solutions.000 to $5. They decided to get the human factors of the meeting right (life-size remote par ticipants. superb acoustics. Telepresence provider Digital Video Enterprises’ true eye contact displays start at $7. They founded TeleSuite. which in turn drives productivity and ROI. Traditional videoconferencing desktop solutions range from sub $100 webcams to $3.000 dollars per month. each auditory nerve is limited to about 30. infinitely patient. with your eyes as “cameras” delivering video to the “display” that is your brain. This superior experience dramatically improves usage. versus eight percent for touch and three percent for hearing. So why does telepresence cost so much money? Answer: Because the human brain is so damn smart! From the first seconds of life your brain has become accustomed to visual collaboration. per location. but the more natural. decided to take a different approach. Most impor tantly. your brain has developed cer tain innate preferences for communication. with “video” being its hands down favorite. culturally correct positioning. four to seven times the usage of traditional videoconferencing.x Whereas each optic ner ve that carries signals from the retina to the brain consists of around a million fibers. the world’s first commercially successful telepresence company. the approximation of eye-contact. A full 30 percent of the brain’s cor tex is devoted to vision. while the traditional videoconferencing industr y was busily working on commoditizing the “plastic-camera-on-the-TV-set-on-the-desser t-car t. telepresence providers address a range of human factors that traditional videoconferencing doesn’t.000. to name but a few) and then integrate the electronics around the human experience. comfor table. Backed by a visionar y investor.” a couple of smar t resor t developers in the Caribbean. high-definition Executive Telepresence Solution is almost $30. Deploying a site to an international location with limited fiber optic capacity can run as high as $40.

they accelerate innovation. Halo opens the biological pathways required for conversations. In an interview for this paper. it is also reported to bring new levels of group productivity. who focused on intelligent action in social systems where everyone accepts each other as legitimate par ticipants. pleasure and seriousness are found. Finally. they focus on the whole face and become aware of changes indicating displeasure.” In addition. etc. Influenced by Chilean biologist Dr. ears. Sandow has helped HP understand and map the networks that create value in the organization. play. children focus on specific facial 10 . joy. His work documents how dynamic social systems create organizational value that crosses the boundaries of traditional organizational char ts. social scientist Dennis Sandow has conducted social action research for HP. problem solving and project completion. while improved quality of life is realized. HP Social Network Map Showing Social Network Ties Across the Company and Around the World When HP started using the Halo Collaboration Studio. Face-to-face interactions that occurred quarterly or semi-annually now occur on a daily basis allowing informal social networks to flourish. because social network encounters are face-to-face. Just as in face-to-face encounters. excitement. Up until age 2. features (eyes.). consternation. both of which contribute to productivity on the job. In a whitepaper for HP that Sandow contributed to. Travel time and its physical effects on individual productivity are eliminated. he characterized the benefits of the HP Halo Collaboration Studio: While Halo has proven to reduce travel costs. loss of productivity from being away from the home office is avoided. etc. Effective Visual Collaboration and the Future of Global Business at the Speed of Light The Importance of Creating Social Connections For over five years.Telepresence. Early in their development. Sandow believes that the visual collaboration experience provides a level of “stimulus control” where the intensity of the social experience elicits a greater degree of focus and active participation than could be achieved in a conference call or webconference. Sandow had a front row seat to observe how the technology could improve and accelerate the collaborative process of key social networks to help the organization. Social capital or group productivity improves for a number of reasons. Humber to Manurana. joy. As informal social networks begin to meet in Halo rooms. Sandow explained why face-to-face interaction is key to effective social collaboration: “Brain research using Magnetic Resonance Imaging (MRI) has shown that facial recognition stimulates the emotional regions of the brain where agreement.

Providers include: Destiny Conferencing. Polycom RPX.Halo Collaboration Studio Destiny Conferencing / Polycom RPX 408 Series 11 . I believe the group system is the most important format for business because it most effectively replicates the traditional across-the-table business meeting in the usual and customary format with capacity for a traditional executive or project team. and Telanetix HP . Teliris. though many providers have solutions that can add a second tier of seating to the environment.Telepresence – What is it and Why Does it Cost so Much Money? Types of Telepresence Conferencing Solutions Telepresence conferencing solutions can be generally grouped into the following categories: Continuous Presence Group Systems — Continuous Presence Group Systems generally seat four to eight primary participants. HP.

Teliris Polycom RPX 400 Series / Destiny Conferencing / MedPresence Teliris GlobalTable VirtuaLive 360 12 . Polycom RPX. Effective Visual Collaboration and the Future of Global Business at the Speed of Light Telepresence Distance Learning Classrooms — Holding from 18 to 36+ participants in an effective format for classroom instruction. classroom training between their own internal locations and those of other institutions on their effective visual collaboration network.Telepresence. Providers include: Destiny Conferencing. distance learning solutions allow organizations (corporate or educational) to conduct instructor lead.

Providers Include: Digital Video Enterprises Digital Video Enterprises Desktop Telepresence Display Digital Video Enterprises Executive Telepresence System 13 . ATK I Vision Digital Video Enterprises Telepresence 50 Desktop and Executive Solutions — Desktop and Executive Solutions extend telepresence capabilities to executive offices or home offices improving communications between the executive team and key managers. seat less participants. Providers Include: ATK. The video codec is usually a standards-based traditional videoconferencing codec and systems can be run on a company’s existing network if the proper bandwidth is available and compliment/ improve traditional videoconferencing deployments. Digital Video Enterprises. These solutions are less costly. and can be mobile.Telepresence – What is it and Why Does it Cost so Much Money? Small Group Telepresence Systems — Small group systems are sometimes referred to as “one-to-three” or “one-to-four” person solutions.

allowing a surgeon to interact with remote medical students during a procedure. Digital Video Enterprises Telepresence Podium The MedPresence MM200 is a portable telepresence solution that deploys from its own shipping crate and can be easily set up at remote hospitals. which allows for motion picture and animation stor yboarding between sites and film editing. • Research and Development Environments.Telepresence. Effective Visual Collaboration and the Future of Global Business at the Speed of Light Specialty Telepresence Solutions and Environments These can include unique telepresence applications: • DVE’s telepresence podium. MedPresence MOR 400 14 . such as the pharmaceutical company that has used Teliris’ technology to create a vir tual lab environment between remote locations. which integrates a telepresence capability into an operating room. physician’s offices. • DreamWorks Vir tual Studio Collaboration solution. • The MedPresence MOR 400. and/or conference venues. which can project a life-size and life-like image of a speaker into one or more locations.

and the expressions that punctuate emotion. providing a superior contrast and image to what you’d see if you were looking directly at the display. conversational regulation (turn taking). Digital Video Enterprises provides users with eye contact by mounting its products with eye-level cameras behind a piece of silvered glass known as a beam splitter. establishing a preference for personal communication that continues throughout life. With the camera hidden from view (another key telepresence concept covered later).Telepresence – What is it and Why Does it Cost so Much Money? Delivering Telepresence and Effective Visual Collaboration: The Telepresence Toolkit Telepresence is an art and science of trade-offs: cost versus performance. — Sticking a videoconferencing endpoint at the head of a long conference table assures an unnatural meeting format. we are biologically drawn to the gaze of our parents.xx to them from trade shows or resellers but they fail to mention the fact that the prospective customers are hardly getting what could be considered an accurate representation of the offering. quality of environment versus available space. I know of several traditional videoconferencing vendors and resellers that actually place a camera in front of the display (obscuring the view of the remote participants) of the videoconferencing systems they use for demonstrations at their corporate headquarters. an “optical black” background absorbs diffused light. the remote par ticipant is reflected off the beam splitter from an upward facing flat screen display. Adding to the complexity. Eye Contact Eye contact is chief among the body’s non-verbal cues. Engineered Environments While more sophisticated videoconferencing integrators may address such environmental elements as lighting. Eye contact between humans is physiologically powerful. saturated colors can clash with the clothing of participants and skin tones. eliciting changes in blood pressure and heart ratexiii and increasing brain activity.xiv The information transmitted through eye contact is rich and varied: — Eye gaze provides many communication fundamentals.xv — Mutual eye gaze has been described by psychologists as “the key to the awareness of the thoughts of another”xvi Persons with strong eye contact are perceived to be more honestxvii. many solution elements are the intellectual property of a specific firm and protected by patent. This improves the experience for prospective customers who connect 15 . The result for participants seated in the center of the room is an excellent approximation of eye contact. Traditional videoconferencing systems deliver poor eye contact because the problem of parallax leads participants to intuitively focus on the eyes of the remote participants and not the camera. — A room decorated with strong. including: feedback.” rated less favorably in the eyes of others. Simply sticking a videoconferencing end point in a traditional conferencing room is a recipe for a mediocre experience: — Direct overhead lighting casts a shadow from the brow over the eye socket that the camera magnifies. rendering them artificial. which is lost the further out you sit to the right or left in the environment. camera placement and the color/reflectivity of furniture. Nevertheless. psychologists call people with poor eye contact as “gaze-avoidant personalities. most telepresence solutions provide some combination of the following features. From infancy. attractivexviii and successfulxix. the overwhelming majority of traditional videoconferencing rooms do not. each camera capturing half the scene. Behind the beam splitter. acoustical materials. Conversely. Digital Video Enterprises’ True Eye-Contact Display Destiny Conferencing’s TeleSuite and Polycom’s RPX mount multiple cameras behind a rear projection screen at eye-level. functionality versus ease-of-use making the experience and quality of communication in different telepresence systems vary.

HP Halo. Cultural Proxemics — Precisely positioning the seating to make the meeting format “culturally correct. Teliris offers options that hide the camera behind polarized glass and in several of its solutions. Bandwidth Deployed 2 x T1/E1 — 3.5MB 1.45 Mbps Confidential Telepresence Systems — Vendor Bandwidth Recommendations Vendor/Solution ATK Services .45 Mbps 3 x T1/E1 4. Telepresence Podium Polycom RPX — 200 Series Polycom RPX — 400 Series Bandwidth Recommendation 1. Destiny Conferencing. New current generation IP videoconferencing endpoints are capable of speeds of 768K. Telanetix and Teliris all use IP networks that provide more dedicated bandwidth than traditional ISDN and the overwhelming majority of IP videoconferencing deployments. Polycom’s RPX and Telanetix use small lenses concealed in a small opening in the display to minimize the effect. Digital Video Enterprises is able to completely hide the cameras at eye level behind the display. the more visual information you can transmit. Absence of Visible Technology — Concealing as many aspects of the conferencing technology as possible. The majority of deployed traditional videoconferencing endpoints still use ISDN networks that typically transmit between themselves at about 384K (384. 4Mbps. This way.54Mbps. Telepresence 50.Telepresence. video quality remains one of the most important.5 Mbps 4 x T1 (6 Mbps) or DS3 DS3 . Polycom’s RPX.5 — 4MB 1. Some of the environmental aspects engineered environments tackle include: Lighting — Integrated lighting optimized for video and positioned to ideally light each position in the environment. The more bandwidth you have. Video Quality Of the many elements that go into an effective visual collaboration. Mirrored Environments — Creating environments that are identical with the other remote locations in the network.” life-size and natural for both site-to-site connections and multi-site connections. Effective Visual Collaboration and the Future of Global Business at the Speed of Light Some telepresence solutions such as Destiny Conferencing’s TeleSuite. the HP Halo Collaboration Studio. the brain can still process detailed visual information subconsciously.I Vision Digital Video Enterprises . Destiny Vendors Deploying Private Network Solutions Vendor/Solution Destiny Conferencing — 2 Screen System Destiny Conferencing — 4 Screen System HP Halo Collaboration Studio MedPresence — MCR/MOR 400 Telanetix — Digital Presence Teliris — Standard GlobalTable Teliris — High Definition GlobalTable Bandwidth Utilized 1. create engineered environments that precisely position participants.Executive Telepesence System. In addition.5 Mbps DS3 . Acoustics — Using acoustical materials to improve both sound absorption (eliminating reverberation of sound in the environment). Studies have shown that the even when the brain’s visual cortex has been temporarily shut down. outside traffic.xxi Because human beings tend to behave differently in front of a camera (sometimes referred to as the “documentarian’s curse”).000 bits per second).0 Mbps Confidential 4. and sound insulation (blocking external sounds such as conversations in the hallway. and the Teliris GlobalTable solutions.5MB Minimum 3. many telepresence providers have directional audio that makes the sound appear to be coming from the direction of remote participants on the screen. 1.0MB Minimum 16 .The quality of video transmitted over Internet Protocol (IP) networks depends on a number of factors: • The amount of bandwidth available to the codec • The quality of the network over which it is being transmitted • The video resolution of the video codec and camera Telepresence and effective visual collaboration providers improve video quality using a variety of methods: Increasing Bandwidth — Bandwidth is the measure of the amount of information that can be transmitted across a network.54 Mbps 3. or greater.0 Mbps 3 x T1/E1 — 4. or the building’s air conditioning system). having a camera visible in a conferencing environment reduces the comfort level of participants and naturalness of the meeting. all participants seem to share the same physical space.5 Mbps 1 Mbps to 45 Mbps 2 Mbps to 45 Mbps Confidential Conferencing’s TeleSuite.

264 MPEG-4 MPEG-4 MPEG-2 or MPEG-4 MPEG-2 or MPEG-4 # of people screens 1-5 2 4’ x 4’ panels 4 4’ x 4’ panels 1-3. simply throwing more bandwidth at a video codec does not guarantee a seamless picture so many telepresence providers deploy dedicated Quality-of-Service (QoS) private networks to ensure quality. telepresence solutions need dedicated private networks that ensure extremely low latency. Increasing Resolution Video resolution can be defined as the number of pixels across the width and height of a display.263/H. letting it stop focusing on the “medium” and concentrate on the “message.Telepresence 50 1-3. A higher degree of visual realism also improves the brain’s ability to suspend disbelief and accept the telepresence experience. Telepresence providers use current generation video codecs including many that are capable of high-definition images to provide a superior picture quality. the sharper the picture. a slight grimace. This ruins the immersive experience and “jolts” the brain back to a state of disbelief.263/H.263/H. the video codec doesn’t have all the pieces of the puzzle to correctly reassemble the scene. When IP packets containing video are lost in transit or arrive out-of-sequence.263/H.264 MPEG-4 MPEG-2 1024 x 768 2CIF or Greater 1024 x 768 2CIF or Greater 1024 x 768 2CIF or Greater 1024 x 768 2CIF or Greater 1280 x 360 D1 720p or 1080i H. packet-loss. which improves the quantity and quality of the information received by the brain as the subtle nuances of interpersonal communications become more apparent. 8+ in Multipoint or Switched Presence People Screen Size & Type 50” DVE telepresence display 48” x 43” Rear Projection Fresnel Linticular 48” x 43” Rear Projection Fresnel Linticular 40-46” LCD. Much of the developing world. the better the visual realism. Appears behind Podium HP Halo Collaboration Studio MedPresence MOR 400 MedPresence MCR 400 Polycom RPX 200 Series Polycom RPX 400 Series Telanetix Teliris — Standard GlobalTable Teliris — High Definition GlobalTable 3 4 4 4’ x 4’ panels 2 4’ x 4’ panels 4 4’ x 4’ panels 2 2-8 2-8 17 .263/H.” The majority of deployed traditional videoconferencing systems are limited to providing FCIF resolution -352 x 288 (352 horizontal pixels x 288 vertical pixels) at 15 . resulting in a jumpy. QoS Private Networks Because of the real-time nature and delay intolerance of interactive video.263/H. Because the Internet is a “best-effort” network where no packets receive prioritization over any other packets.264 MPEG-4 H.Telepresence – What is it and Why Does it Cost so Much Money? Improving Bandwidth — High Bandwidth Dedicated. 8+ in Multipoint or Switched Presence Digital Video Enterprises .264 MPEG-4 H. Transmitting video over IP networks takes the compressed video from the codec and breaks down the data into packets that are then sent to the remote site(s). or out-of-sequence IP packets (known as jitter in videoconferencing parlance). E-mail or web surfing can tolerate lost. standard cable television delivers a resolution of 672 x 384 at 30 frames per second and HDTV delivers 1280 x 720 or 1920 x 1080 at 30 to 60 frames per second.264 MPEG-4 H. but not real-time video. or other nonverbal cues that might provide a window into the thoughts.263/H. The sharper the picture. Resolution Per People Screen 1024 x 768 2SIF (352 x 576) scaled to 1024 x 768 2SIF (352 x 576) scaled to 1024 x 768 720p HDTV 720p HDTV 720p HDTV Compression Standard H. late. motivation or comprehension level of remote participants. A one-way latency (the time it takes IP packets to traverse a network and process through the video/audio codecs) of over 250 milliseconds would result in a perceptible and annoying delay when remote participants speak. These subtle nuances include perspiration.263/H.264 MPEG-4 H.264 MPEG-4 H.263/H. making the cost of delivering a high-bandwidth QoS network substantial in those locales. Hidden Camera behind Screen Holographic Projection technology 50” plasma 4 flat screen or Rear Projection Video Wall 16’ x 32” Rear Projection Video Wall 8’ x 42” Rear Projection Video Wall 16’ x 42” Rear Projection Video Wall Customer’s Choice 42” up to 100” Flat Panels 42” up to 100” Flat Panels Digital Video Enterprises . freeze-frame effect.264 MPEG-4 H. There the video is decompressed and displayed on the screen. such as China and India. and jitter. Hidden Camera behind Screen 50” Plasma. doesn’t have abundant network bandwidth of the quality required to support the real-time interaction of Vendor/Solution ATK Services I Vision Destiny Conferencing TeleSuite 200 Series Destiny Conferencing TeleSuite 400 Series Digital Video Enterprises .264 MPEG-4 H.Executive Telepesence System telepresence. The greater the resolution. truthfulness. By comparison.30 frames per second.Telepresence Podium 1.264 MPEG-4 H.263/H.

Telepresence Podium simultaneously without losing any of the audio from either location. referred to as spatial orientation.Telepresence. high latency will produce a delay in the time between when something is said and heard on the remote end. and Teliris solve this problem by maintaining direct connections to each location. Telepresence 50. 18 .Standard GlobalTable . — Tightly integrating and simplifying the use of collaborative tools in the environment. level compressor Teliris .High end echo cancellation per vectored channel Automatically mixes microphones and other audio sources while cancelling acoustic echo’s and background noise. Destiny Conferencing. requiring the mastery of often indecipherable remote controls and the assistance of a conferencing or IT professional in the room to set up and start the conference. per channel echo cancellation and noise reduction. — A fixed camera and display solution that captures the entire scene eliminating the need to adjust the camera and the annoyance of disruptive panning. equalizatin. Telepresence providers including Destiny Conferencing. tilting.1 KHz 256 — 384 Kbps 20 KHz 256 — 384 Kbps 20 KHz 64 Kbps 22 KHz Studio quality. Spatial Orientation — In a traditional group videoconference. This is an option offered by HP Halo. make remote participants lifesize. and Teliris. While videoconferencing providers have simplified their controls. Similar to video quality. and zooming. most telepresence providers have taken it a step further by: — Providing concierge services that handle every aspect of reservation and call set up. Most telepresence group systems. This realism in a conference depends on a number of factors: Latency and Lip Synch — A remote participant’s speech must be in sync with the movement of his or her lips. Most telepresence providers offer CD-quality audio with good echo cancellation in a “full duplex” configuration. — Simplifying the ability to launch ad-hoc calls by providing a touch sensitive GUI or intuitive call set up menu. improving the ability to understand who is talking and some use directional audio to make the sound appear to be coming from a particular speaker or direction in the environment.Telanetix. Effective Visual Collaboration and the Future of Global Business at the Speed of Light Audio Quality Audio quality is one of the most underestimated aspects of an effective visual collaboration experience. Automatically mixes microphones and other audio sources while cancelling acoustic echo’s and background noise. allowing both sides to speak Vendor/Solution ATK Services Destiny Conferencing Digital Video Enterprises — Executive Telepesence System. Audio Quality 64 Kbps 20 KHz 64 Kbps 22 KHz Audio Features 5:1 A/V Full Duplex In multi-point Y Multiple channel audio and voices can emanate from the location of the people on the screens HP Halo Collaboration Studio MedPresence MCR/MOR Telanetix Teliris — Standard GlobalTable Teliris — High Definition GlobalTable Polycom RPX 200 Series CD Quality Audio 64 Kbps 20 KHz 128 Kbps 44. Audio Quality — As with video quality. A traditional “Hollywood Squares”-esque multi-point videoconference exacerbates this problem by making participants even smaller. it is often difficult to immediately determine which tiny remote participant is speaking. Polycom RPX. on the other hand. This is a function of the quality of the network.High end echo cancellation per vectored channel Teliris . Y Y Y Y Y Y Polycom RPX 400 Series 64 Kbps 22 KHz Y Ease-of-Use Traditional videoconferencing has long been characterized by technical complexity. This level of audio can’t be achieved in traditional multipoint videoconferences.High Definition GlobalTable . with a single microphone and single speaker on each side. the more audio information captured and transmitted to a remote location results in a more faithful representation to listeners. Telepresence providers strive for a level of acoustical realism that makes remote participants sound natural and in the room.

Voice Activated — The remote site that is speaking or spoke last is visible on the screen. reserve both rooms and call Bob in London on his cell phone and ask him to pop in for a quick meeting. Most telepresence providers devote single or multiple screens to each remote location. a self-view of your location. microphone and display for each position. let’s expand on the three-site GlobalTable meeting above. Besides. Multi-Point Meetings — Conferencing with Three or More Locations Traditional multi-point videoconference can be broken into two main formats: Continuous Presence — Each remote site is reduced in size and visible on the screen in with various screen formats of “Hollywood Squares”. Illustrative example of a 50-inch monitor. leaving the other locations invisible until they speak. As a result. most large-group meetings tend to be dominated by a small number of speakers anyway. The Teliris GlobalTable touchscreen room availability and scheduling display Scaled Geometric Perspective/Life-Size Participants Most traditional group videoconferencing systems display the image of remote participants to a single 36. the single screen reduces the size and warps the proportions of the people on the other end.Telepresence – What is it and Why Does it Cost so Much Money? As an example: Teliris offers a room availability and scheduling option that provides a touch sensitive display outside each GlobalTable room that simplifies ad-hoc usage. Neither approach offers much in the way of replicating the natural dynamics of a face-to-face meeting. Most traditional videoconferencing systems display users from more than two locations in a format known as “continuous presence. keeping everyone life-size. Voice activated formats also negate this benefit by keeping most participants off-screen. 19 . but all of them have a life-size view of the action. GlobalTable participants at each location tell the system where the active participants are sitting. limiting the suspension of disbelief required to take participants from an observant experience to an immersive one. using some additional images supplied by Teliris. the participants are able to maintain their lines of site and the direction of audio when speaking with multiple locations. To keep the appropriate orientation between speakers in a multi-point meeting. or almost life-size and in perfect proportion. Because Teliris places a dedicated call between each site with a specific camera. Telepresence providers address the problem of scaled geometric perspective with large format video walls and multiple monitors. or another remote location. the second display is meant for data.Those non-verbal cues that are so important to communication end up getting lost in the shuffle. the overall experience is substantially more natural. not to double the screen real estate. To explain Vir tualVectoring. comfortable and productive than the tiny remote participants of videoconferencing. allowing the key individuals at each to remain life-size or almost life-size. Some remote participants may not be visible on-screen. Traditional continuous presence formats often shrink images so small they prohibit the non-verbal cues so essential to effective visual collaboration. While many videoconferencing providers offer dual displays. Having a hallway conversation with a co-worker and want to bring in Bob in London? Check the availability of both GlobalTable rooms at the door.” which makes all participants look like they’re on the title sequence of the Brady Bunch. Teliris uses a proprietary concept called “Vir tualVectoring” to provide realistic lines of sight and audio direction in a multipoint meeting. multi-point meeting using the Teliris GlobalTable While group telepresence environments do have their limitations (the number of visible life-size participants is limited to the available screens in the environment).

Destiny Conferencing’s TeleSuite System and Polycom’s RPX can connect up to five locations in their 400 series offerings with from two to twelve remote participants visible per screen depending on the model.Telepresence. Effective Visual Collaboration and the Future of Global Business at the Speed of Light The HP Halo Collaboration Studio can connect up to four sites with up to four participants visible at each location. 20 .

accompanied by a quick screen fade. CD. piece-of-paper or other physical object. Polycom RPX and MedPresence provide 17” monitors between each two seats Telanetix Digital Presence System has data collaboration on the outside screens 21 . including: Collaboration Screens — All providers of group telepresence systems provide screens for sharing power point slides. such as a circuit board. Data Collaboration Digital Video Enterprises / ATK switched presence control unit Data may enter a visual collaboration environment from a laptop. documents or the output from document and object cameras. telepresence environments use a variety of tools. USB flash drive. Everyone in the multi-site conference can take “the conch” by pushing a single button. switched presence gives each participant a microphone with a small control unit installed under the lip of the table in their group system. This way. To handle all this input.Telepresence – What is it and Why Does it Cost so Much Money? Switched Presence — a proprietary solution offered by Digital Video Enterprises and ATK Services. Teliris GlobalTable Data Collaboration Screen Destiny Conferencing. Placement of the screens differs in each environment. each participant appears life size and appears to have eye contact with all participants. which switches the focus of all remote sites to that participant.

Effective Visual Collaboration and the Future of Global Business at the Speed of Light Plug and Play Data Collaboration — Many telepresence providers simplify sharing data between locations by providing a plug and play VGA connection that lets participants connect a laptop for easy sharing between locations. High Magnification Document Camera . Teliris Document Replicator HP Halo Collaboration Studio’s Plug and Play Data Collaboration Document and Object Cameras — The HP Halo Studio and ATK’s I Vision offer a ceiling mounted high resolution. The magnification and resolution are high enough to show detail as fine as printed circuit boards or garment stitching. distributes and prints hard copies of physical documents to all locations in a conference. 22 HP Halo’s High Resolution. Document Replication — Teliris offers a document replication system that automatically scans. high magnification camera that lets users share documents or physical objects on the studio’s 50-inch collaboration screen.Telepresence.

Every time. This is especially important for engineered environments that may require modifications to the facility to accommodate the environment. This complexity and interdependence is one of the reasons the majority of group telepresence system providers offer their solutions as an end-to-end service backed up with a Service Level Agreement covering: System Availability. delivery. and installation logistics of each site. explain the collaborative tools or bridge in a telephone participant or legacy videoconferencing end-point. HP. including Destiny Conferencing. 23 . complex sub-systems. These can include: • Video and Audio codecs • Acoustical components • Echo-cancellation • Multiple microphones and speakers • Network links • Local loops provisioned by a telecom provider • Long-haul transport • Network equipment co-located around the world • Network premise equipment • IP Routers/Switches • Display Systems • Flat panel displays and DLP projectors with bulb life issues • Reservation Systems • Gateways to off-network IP and ISDN traditional videoconferencing end-points The sub-systems listed above are a small sampling of the various technical elements that can comprise a group telepresence solution. Proactive Monitoring and Remote Management — Actively and continuously monitoring the quality of the network and status of the devices with the ability to remotely diagnose and troubleshoot any problems. facilities. networking. Around the world.Telepresence – What is it and Why Does it Cost so Much Money? Stand Up Presentation Capability — The Teliris GlobalTable Vir tuaLive 360 telepresence environment offers an optional stand-up presentation capability which can capture a speaker at a lectern and display the speaker behind lecterns at the other remote locations. and Teliris. Concierge Services — The ability for any participant to access an “operator” that can place a call. Complicated telepresence solutions entail the management and monitoring of multiple. latency and jitter. assist with a reservation. The environment can also capture par ticipants at a whiteboard or an optional stor yboarding capability for the motion picture and animation industries. Telco Provisioning — Handling every aspect of provisioning the network to each location. offer equipment maintenance and on-site repair around the world. Various components of end-to-end service typically include: Site Survey — A review of the architectural. In every location. End-to-End Service and Service-Level Agreements Telepresence doesn’t offer a lot of productivity advantages if the system doesn’t work. Equipment Maintenance and On-Site Repair — Burnt-out bulb in Burma? Mangled microphone in Malaysia? Cracked camera in Calgary? Many vendors. Teliris GlobalTable VirtuaLive 360 With Stand-up Presentation and Lectern Option Reliability. Network Availability and Network Quality including packet loss.

The HP team responsible for the move estimated that its use of Halo enabled it to shave six months off the project and avoid 44 international trips. a joint venture partner. • The total number of telepresence sites an organization has and the total number of legacy videoconferencing systems to which the telepresence systems can connect. CEO and Chairman of the Board. transferred a production line from its R&D beginnings in Corvallis.” -Steve Reinemund. DreamWorks credits the use of telepresence with its ability to ramp up from producing one animated feature a year to its current pace of two animated features a year.and that’s travel. Our expectation is that this type of travel will virtually stop. According to HP. UK. how do the major telepresence group system vendors stack up with traditional videoconferencing’s 15 hours per month. The companies’ mutual fund and portfolio managers could present to. • HP. • Large multi-national firms with offices scattered over multiple international time zones tend to use their systems across off-peak hours driving additional usage. the usage of telepresence solutions is dependent on a number of factors: • The size. whose 20 active internal Halo Collaboration Studios make up the largest deployment of telepresence sites in the world. the outcome was likely limited. another large contingent in Dallas and a fair number of people in New York and those people literally traveled every day between those three sites . Some of these events were catered and one concluded with a virtual wine tasting. • HP. a mining company or textile manufacturer. much of that ROI never materialized because the systems weren’t used. The quality of telepresence has expanded the utility of visual collaboration to applications and types of meetings previously beyond consideration for traditional videoconferencing users. • Some of this usage is assumed to be demonstrations for prospective customers • Teliris reports average usage at 60 percent of capacity during a 10-hour business day or 120 hours per month. where the majority of employees are engaged in manual labor. answer questions from. in Bristol. • UBS and Oppenheimer used TeleSuite’s publicly available virtual meeting center at the Waldorf=Astoria to meet with private investors at another publicly available TeleSuite at the RitzCarlton in Phoenix. “I think the Halo room in the short time we’ve had it has already increased my team’s efficiency. utilizing its own Halo network. per month. has systems averaging up 200 hours per month with some hitting 275 hours per month.Telepresence. per endpoint? • Destiny Conferencing. Oregon to its permanent home in Singapore. say. the usual timeframe for such a move is 12 months. geographical distribution and business of the organization • Firms with geographically dispersed knowledge workers collaborating on software or pharmaceutical development are naturally heavier users than. Effective Visual Collaboration and the Future of Global Business at the Speed of Light The ROI of Telepresence and Effective Visual Collaboration So while traditional videoconferencing systems long promised substantial Return-On-Investment (ROI). Greater Productivity. And if they have. reports some customers averaging as many as 200 hours per site. and develop a rapport with the remote investors. PepsiCo Increased Utility The poor quality of the videoconferencing experience has traditionally limited its usage to primarily lower importance intracompany meetings. • Whether or not the system is open to all employees or reserved for management. with multiple trips between locations. per location. Some examples: • DreamWorks’ Virtual Studio Colloboration initiative lets the company conduct virtual storyboard sessions between various campuses and Aardman Animation.You have to understand how we work. and Improved Outcomes Measuring and Understanding Telepresence and Effective Visual Collaboration Usage Like traditional videoconferencing.We have a large contingent of people in Chicago. Very few organizations would ever consider having a Board of Directors’ session or an important meeting with a customer using traditional videoconference. Business Effectiveness — Increased Utility. 24 . With that said. effectively doubling its revenue potential each year. This section looks at the substantial improvements in usage of telepresence systems over traditional videoconferencing and then the savings and benefits that become possible because they are actually used. who also manufactures the similar Polycom specified RPX.

flexibility and time-to-market advantage) outweigh travel savings alone. According to Ms. leading to one of Pearson’s most complex and successful product launches ever. an HR and management development executive at Pearson. I could never use a videoconference again! TeleSuites are great!” “I set up meetings for T4+ all the time and using TeleSuite (and learning about the TeleSuite tools) have made meetings so much more efficient and productive for me.000 employees in 61 countries. which equates to about ~$860MM annually. a $7 billion media company with 34. including executive aviation. numerous telepresence customers have specifically mentioned this as a benefit. who had access to and experience with both a telepresence system from TeleSuite (now Destiny Conferencing) and the company’s top-of-the-line videoconferencing rooms. Let’s look at some actual ROI models to better understand where the savings come from. we are fans and think it is so superior to videoconferencing that this is the only format we should use going forward” In an ambitious attempt to create a visually compelling cross-curricular reading program for elementary school students. Cisco’s CEO John Chambers has said he believes a network of twenty telepresence centers would allow the company to shave 20 percent off its travel budget. to collaborate on 140 titles —textbooks. touch-sensitive. the company used GlobalTable to connect across the Atlantic the talents and image library of the company’s Dorling Kindersley (DK) subsidiary in London with the educational publishing expertise of Pearson Longman in New York City. Many companies aren’t willing to share their travel data. Important Note on the Following Hard-Dollar ROI Models: With less than an estimated forty companies actively utilizing telepresence and effective visual collaboration solutions worldwide (and many for less than one year). Kanter credited GlobalTable with enabling a degree of international collaboration between publishing subsidiaries that had traditionally been in separate publishing niches. assuming the Return on Investment to be a “no-brainer.The ROI of Telepresence and Effective Visual Collaboration Greater Productivity While it is harder to measure the soft-dollar ROI of greater productivity over traditional videoconferencing. have been reported to be one percent of its $86 Billion in revenue. ROI data is extremely hard to come by. It has been heralded as one of the greatest Pearson publishing success stories. The videoconferencing rooms were custom integrated solutions that combined IP videoconferencing running at high-bandwidths. HP’s travel expenses. a DVD player. wireless remote control that simplified call set up and use of the collaborative tools. teacher support materials and CD-ROMs spanning science. from the CXO level down. was good enough to provide some specific examples of how Pearson is using the GlobalTable to “share intellectual property across the company and allowing executives to connect across business units” without extensive physical travel. Here are some of the results of the survey and participant comments: “Awesome. The project. design and technology.” Improved Outcomes The quality of the collaborative experience has also lead to improved outcomes. Justine Kanter. a document camera.2MM. many organizations evaluating this sort of investment first focus on the more easily quantifiable harddollar costs of reducing intra-company travel. Ms. and many companies using telepresence solutions never did any ROI analysis. history. “All TeleSuite meetings I have attended have been very positive. as often as twice a day. My team always gets excited when we have the TeleSuite for meetings. In the Fortune 2000 it appears. has been a Teliris GlobalTable customer since 2001. business effectiveness. Kanter: “First year revenue was estimated at $2m and exceeded all expectations with actual sales of $10m. came to called Four Corners. Pearson plc.” While some of the ROI data below is several years old and — in two cases — from companies that have not yet deployed telepresence solutions. and a custom-designed. a lot can be cut.xxii In Q4 of 2005 with only a fraction of their existing network of Halo Studio up and operational HP estimated they were able to shave two percent off their existing travel budget or ~$17. the models we’ve established are meant to illustrate the costs involved in intra-company travel and convey how organizations can model their potential travel savings which is a consulting engagement the Lab offers. a 60” display that doubled as a rear-projection interactive whiteboard. and each published in four different versions. a VCR. among others. Some of the following companies cited here will remain anonymous.” Hard-Dollar Travel Avoidance While the soft-dollar benefits of telepresence and effective visual collaboration (improved productivity. geography. 25 . In late 2004 CapitalOne surveyed over 150 employees. The GlobalTable connection allowed the New York and London teams to meet for over a year. art. fittingly enough.

046 128.54 $95.227) (16.622.724) (198.727 1.093.8% 5.37 51% 4% 31% 5% 8% ROI Analysis Assumptions 1) Seven Telepresence Systems at six company locations 2) Telepresence systems were leased over 48 months 3) Unlimited usage at each endpoint 4) $18.5% 3.622 127.187) (518.727 1.057.039 316.956 respectively. the company made a total of 15.165 trips.132.911) 14.727 1.664. TRAVEL COSTS Traditional 1.523 84.413) (72. 3.576) 1. New York and three additional domestic locations.06 396. tax advantages of leasing.622 127.34 $29.96 330.40 $7.919 2.622 127.622 127.209 55.983.08 496.622 AVG.277 Virtual 127.03 992.727 1.184 499.470 149.727 1.>$20 Billion in 2003 Revenue Analysis done in 2004 with 2003 data — Company ended up not deploying a telepresence solution at the time 2003 Total travel spend excluding executive aviation: $95.5% 20.465.434 trips between these pairs of cities.622 127.727 1. An analysis of four variables — airfare.92 661.395 111.231 666. with the top four pairs (all domestic) accounting for 4. The analysis did not examine: Cost of corporate aviation.092 277. Effective Visual Collaboration and the Future of Global Business at the Speed of Light ROI Study #1 Fortune 100 Financial Services Company .286 trips per month. hotel.969.191 94.749 4.800.0% 30.727 1. with 1.464. or cost of executive time while in transit.95 3.622 127.466.622 127.40 793.219. 3.085 427.196 3.727 1.0% 5.855 26 . Trips to these locations averaged 1.348.0% 12.655 Total Annualized T&E Savings (1. per trip.60 567. The fifth largest city pair was NYC-London.993 205.20 441.58 2611.615 333.813 222.302 6.8MM on hotels.57 1984.438.59 $4.923.562 372.138 388.727 USD per trip 6) 1.799.516 261.727 1.51 $4.622 127.0% 17.727 1.79 1711.798.0% # of Travelers 13 32 49 64 75 129 161 193 225 257 289 322 386 TOTAL TRAVEL COSTS Traditional 22.Telepresence.5% 15. including London.232 was the average cost per telepresence system per month 5) Total T & E $1.727 per employee. productivity.463.025 5.243.6MM 2003 Total Spend by Expense Category Expense Type Airfare Car Rental Lodging Meals-Self Traveling Taxi/Limo Total For Exp Type $49.622 127.298 1.622 127.727 1.8% 10.622 127.472 3. In 2003.0% 22. meals (self) and car rental/taxi/limo expenses — yielded a fully-weighted average of $1.727 1.133. Sydney. The company spent a total of $10.264.099) (43.0% 2.953) (865.044 and 1.131. 1286 Shifted % of travel 1.609 538.727 Virtual 9.661 444.642 1.685.286 round trips per month 7) Green highlight is breakeven The analysis looked at inter-company travel between six key locations.072.707 555.5% 25.6MM on air travel for the top six destinations and $15.622 127.649.80 % Savings -475% -130% -51% -15% 1% 43% 54% 62% 67% 71% 74% 77% 81% Monthly T&E Savings (105.

We are witnessing a massive culture change where people are talking more openly to each other about their markets and products.The ROI of Telepresence and Effective Visual Collaboration ROI Study #2 Pearson plc Global 1000 Media Company > $7. It is also about getting smarter at: communication strategy collaboration Marjorie recently announced a $50.000 per day • Senior Executives: $4.250 per trip Company’s estimated annualized savings for the single business unit @ $2. car service. hotel. We have a very good relationship with all of them but previously we would only communicate by email for standard business. The diary for bookings is full now. Talking face to face with someone is very different from sending memos and submitting reports. David Bell [Director and Chairman of Subsidiary] for example is doing less and less travel at the moment and is therefore increasingly reliant on it. 2. and that includes our main Pearson Education offices in New Jersey. Our businesses have more in common than they first thought. dining. particularly as I went straight into a meeting with the US. car service. and executive time in transit Management Committee Meeting • Four members in the UK. sharing joint initiatives and looking at ways we could roll something out across the whole of Pearson . Six in the US • GlobalTable replaced three Meetings Every 2 Months • $90. hotels. • Approximate cost savings: $21. The cost savings to all parts of the business continue. We are now discussing strategic initiatives with people in the business that previously were just email colleagues because it is so simple. on a wide scale.all values very strongly espoused by Marjorie Scardino [Pearson’s CEO]. For example.000 in savings every two months • Business class flights.000 per day Corporate Strategy Group Meetings • Five members in the UK. and one person taking on the role of President of Pearson Inc in the US and Communications Director in the UK.that conversation would never have happened previously and importantly. dining. a Management Development and HR Executive at Pearson. Finally there are an increasing number of positions being taken by senior managers that require transatlantic collaboration — Chairman of Penguin worldwide.This is not to say that these roles would not exist without Global Table. The Financial Times. We had a brilliant 2 hour discussion about a key talent review.000 prize for the best collaboration at Pearson.1MM Company’s Self-Reported Additional Benefits: Justine Kanter. Finance Director of Penguin worldwide. after we spoke. Frequency of use continues to increase. almost 2-3 weeks in advance.” 27 . reports: “I have been thinking a little about Global Table. and not feeling in any way threatened by sharing knowledge. Chief Collaboration Officer. Marjorie’s aim is to get Pearson people working together across businesses to create new products. where people make the journey to Manhattan without hesitation. Obstacles to collaboration soon fall away when you have tools such as Global Table in place. particularly as people are placing increasing importance on family life and reduced travel . the initiative would never have been developed. It is becoming second nature for people to use it for the majority of communication with the US. but it is certainly a very good tool to help make these positions work effectively. There are two important points to make I think: 1.5 Billion in 2005 Revenue ROI Analysis Conducted in 2002 with 2002 Data Teliris GlobalTable Customer — Locations in New York City and London at time of analysis • Have since added additional rooms in London and New York • Analysis looked at savings internal to corporate parent only and not to subsidiaries. • Analysis only looked at hard-dollar travel savings of specific regularly scheduled transatlantic meetings • Analysis did not consider: corporate aviation or productivity • Executive time in transit was estimated at: • Mid-level executives: $2. open new markets and build working relationships with their colleagues. and one of the HR Directors in Pearson Education US. It is not just about saving money on international travel. 3 in US • Group moved from monthly in-person meetings to using GlobalTable every other month and an in-person meeting on alternate months. the meeting I went off to on Wednesday was with a group of us here at plc. and executive time in transit Corporate Communications Meetings • New York City based Director meeting with London team and London investors • Approximately 4 trips per month @ $7.750 per meeting • Business class flights.

502 $149. 2003 — Sept.280 $568.959 $70.400) ($62.064 $492. car rental/car service • Analysis did not evaluate: corporate aviation expenses.333 $120.0% 40.900 $21.346 $7.338.192.333 $240.511 $82. or executive time in transit • Total number of trips between top three city pairs in nine months: 2.900 $21.0% 5.900 $21. hotel. 2003 Total: 3.900 $21. 2003 only • Analysis looked at top three city pairs only: Houston.333 $160.000 $106.800) ($124.982 • Average Costs Per Trip: Airfare: $2.0% 20.053 $161. enter tainment.0% 45.754 $24.408 $58. Est.900 $21.567 $277.900 Assumptions 3 TeleSuite sites: London.128 $8.25MM • Airfare.S.900 $21.400.0% 30.900 $21.976 $1.900 $21.000 $146.0% 55.Telepresence.432 $153.564 $5.259 $207. 30.716 Annualized Travel Shift to TeleSuite Savings/Loss ($262.0% 60.000 $226.744 $1.900 $75 Company Travel Data Average T&E per trip: Airfare: Car/Hotel per trip: Meals/Incidentals per trip: Total T&E Per Trip: $2. Monthly Components % Travel Trips Shifted to TeleSuite 0.896 $707.0% 10.900 $21.900 $21. tax advantages of leasing.464 $253.832 $215.778 28 . 2003 Total: $4. Houston & 3rd City TeleSuite Systems Initially Capitalized — Not Leased Total # Travel Trips = Monthly company travel only between all 3 cities: Total # Meeting Hours = Average meeting length: Travel Costs = Average T&E per trip: TeleSuite Site Costs = Monthly site for all 3 sites (fixed): TeleSuite Usage Costs = Hourly rate per site: (assumes 80% of meetings are 2-way.128 $984.000 $186.820 $19.707 $196. 1.910 $10.692 $12.360 $1.810 $219.512 $846.184) $14.0% 35.680 $630. Effective Visual Collaboration and the Future of Global Business at the Speed of Light ROI Study #3 Fortune 500 Oil Company 2004 ROI Analysis on 2003 Travel Data • Data from Jan.474 $14.156 $184.900 $21.123.667 $213.592 6 Month Travel Shift to TeleSuite Savings/Loss ($131.602 $21.296 Travel Costs $266.613 $105.372 $561.913 $242.038 $17.0% 25. productivity.782 $3.988 $700.048 $291.384 Combined Travel + TeleSuite Costs $288.667 $253.097 Car/Hotel: $681 Total Per Trip: $2778 The analysis did not examine: Cost of corporate aviation.756 $423.667 TeleSuite Site Costs $21. or cost of executive time while in transit.900) ($10.778 $21.349) $1. productivity.216 $76.900 $21. London.857 $47.664 $430. Location • Nine-month spending on travel for top three city pairs: $3.333 $200.987 Est. 20% are 3-way) 96 3 $2. meals.951 Travel Shift to TeleSuite Savings/Loss ($21.448 $353.092) $7.667 $133.667 $173.097 $681 $0 $2.605 $173.165 $116.0% # Travel Trips 96 91 86 82 77 72 67 62 58 53 48 43 38 # TeleSuite Meetings 0 4 7 11 14 18 22 25 29 32 36 40 43 # Meeting Hours 0 11 22 32 43 54 65 76 86 97 108 119 130 TeleSuite Usage Costs $0 $1.305 $35.015 $265.062 $93.261.524 $145.140 $284.0% 15.361 $230. and third Domestic U.203 $12.256 $16.0% 50.

• Improve the knowledge and cultural transfer between the organizations. • Knowledge Transfer & Management — Some telepresence environments can be used to capture. vendors. stream. • Employee Health & Safety — The ability to do business in regions that hold the threat of terrorism. which can be shorter than IRS depreciation schedules. • Quality-of-Life — Business travel can be hard on personnel. clients. and archive content (including both video and data) created in the environment. and technical integration. • True Lease Tax Advantages — Many telepresence systems can be leased with an equipment write-off tied to the lease term. • Cost Efficiency — The ability to bring more of the team to a meeting that normally would have traveled. resulting in larger tax deductions each year. lost productivity. • Disaster Preparation & Business Continuity — The ability to effectively manage after a disaster or during restrictions of air travel due to war or terrorism. families. and the lower back. shareholders.The ROI of Telepresence and Effective Visual Collaboration Summarized Hard and Soft Dollar ROI and Intangible Benefits • Reduced Intra-company business travel — Quantifiable hard dollar ROI • Reduced Use of Executive Aircraft — Quantifiable hard dollar ROI • Productivity — Shortening decision times. The Polycom RPX /Destiny Conferencing 210M seats ten participants and doubles as a traditional conferencing/training room 29 . or public health emergencies. Accelerating the speed of business. war. • Time-to-Market Advantage — The ability to reduce the cycle time to launch new product offerings and integrate them into production. • Merger & Acquisition — Improving the M&A process by: • Allowing the key executives from each team to be “right down the hall” from their counterparts. • Reduce the costs associated with M & A in hard-dollar travel. • Improved ROI from existing VTC investment — Many telepresence solutions have been proven to improve the usage and ROI of existing videoconferencing deployments by improving the experience of connecting to legacy videoconferencing systems and increasing their usage. • Relationship Management — The ability to meet face-to-face and nurture important business relationships with board members. Reducing time in transit and out of the office. and the media among others. • Flexibility — The ability to hold meetings that would be impossible in any other format due to the time limitations of physical travel and/or the impossibility of being in two places simultaneously. direct reports.

24 x7 concierge. it is conceivable that an organization might deploy a mix of vendors. and on-site maintenance services). but this is not a problem for companies like ATK. or the Teliris GlobalTable) or building a custom integrated solution. Lotus Notes. Example: • Six seat HP Halo Collaboration Studios for group collaboration between offices and to connect with vendors.500 per month. Recurring Costs: The IP network. Polycom. Digital Video Enterprises and Telanetix that require installation. Understanding the total cost of ownership for a custom integrated solution is much more complicated to determine — the costs can vary widely depending on a number of variables: • Network Connectivity — Do you have the right type of network and enough bandwidth for the application or will you need to deploy an overlay network? • Video Network Infrastructure — Do you require multi-point capabilities and does that require additional video network infrastructure to purchase and support? • Custom Software Development — Do you want a simplified interface to integrate collaborative tools.Telepresence. Since no single provider currently offers a complete range of telepresence solutions. and Telanetix. such as an accelerated depreciating schedule. Polycom’s RPX. a site survey for each location prior to installation. End-to-End Managed Services Typically the end-to-end managed service providers break their costs down into two components: Upfront Costs: The telepresence systems themselves including the environment and electronics. an organization will need to decide whether to capitalize the upfront costs or lease the equipment. Destiny Conferencing. including environment. help desk and reservation services. Solutions by Destiny Conferencing and Polycom can be deployed as either end-to-end managed services or the telepresence environments purchased outright and run on an organization’s existing network. concierge. per room in a fourstudio scenario. and on-site equipment maintenance. electronics. customers and/or joint venture partners on the HP Halo Collaboration Network • 21 or 36 Seat TeleSuite Distance Learning Environments for training and large groups • Digital Video Enterprises’ desktop Executive Telepresence System in the offices of senior executive For the sake of simplicity. storing and archiving of sessions. Digital Video Enterprises. The HP Halo Collaboration Studio connected in a conference 30 . site survey and on-site installation into a 48-month lease with a fair market value end-of-term purchase option. such as moving a vent. the HP Halo Collaboration Studio. and/or streaming to the internet? Scheduling integration with Outlook. Leasing can provide tax advantages. the cost of acquiring a Halo Collaboration Suite comes in at a flat-rate cost of $27. HP offers a leasing option on its $425. I will add to the list a third component which I call: Additional/Hidden Costs: These can include: acquisition consulting. networking. and support from an internal conferencing / IT department or thirdparty vendors. it must first decide between purchasing an end-to-end managed service (such as Destiny Conferencing’s TeleSuite. and the on-site installation of the system. we will break these options down between End-to-End Managed Services and Custom Integration.) Custom Integration Vendors such as HP Halo and Teliris do not let the buyer run their products on an organization’s existing network or manage them internally. and/or a company web portal? Capitalize or Lease? After determining the vendor and initial number of sites. When coupled with the recurring charges for HVEN (HP’s network. Effective Visual Collaboration and the Future of Global Business at the Speed of Light Telepresence Buyers Guide Understanding the Total Cost of Ownership and Acquisition Scenarios When an organization contemplates a telepresence solution. The latter uses products or bundled solutions from vendors such as ATK. removing walls or repositioning a door. internal project management and training costs and facilities (some facilities require significant modifications & make-ready to accept a specific telepresence environment.000 per room HP Halo Collaboration Studio through HP Financial Services that wraps up the upfront costs.

100. The connection must be approved by both parties in a call and then the connection is torn down when the call is completed. telepresence appears to have a bright future indeed. HP and Polycom’s entry into the market and Cisco’s impending entry announced in Newsweek in March of 2006 is sure to attract the attention of other potential Global 2000 competitors (Sony and Tandberg are obvious candidates as fast-followers) assuring more research and development resources directed at the field. Currently. etc. for the overwhelming majority of inter-company interactions especially in the telepresence group systems and distance learning classrooms. joint venture partners and customers. but the overwhelming majority cannot yet connect to their key vendors. vendors. Right now. directional audio. etc. A baseline format will be adopted that establishes a consistency-of-quality between the majority of telepresence systems with respect to: cultural proxemics.The Future of Telepresence and Effective Visual Collaboration The Future of Telepresence and Effective Visual Collaboration Now that the end-user acceptance problems of visual collaboration have been solved and the early adopters are sharing their experiences with the benefits and ROI. room scheduling and availability. and environmental format (I. investors. These companies have barely scratched the surface of the technology. communications protocols. fewer than 40 known companies have deployed telepresence and effective visual collaboration group systems.E. how does a telepresence group system HP Halo’s GUI Simplifies Inter-company Calls Eventually I see a standard (or de-facto standard) developing for inter-company business in the format of these systems. but already their benefits have been substantial. Now multiply this capability by 10. or 10. This level of interconnection will start slowly but accelerate rapidly. camera and display placement. As you look over the following list of publicly known telepresence customers. you will notice a bunch of individual islands and island chains. the ROI proven and further adoption among their peers certain. Telepresence vendor Teliris has already developed a security feature for inter-company business called SecurePath NNI which sets up a secure connection between disparate organizations on the Teliris network. 31 . so expect to see a knife fight at the speed of light between the vendors in this area. and customers including most notably: DreamWorks and AMD which the company has strategic relationships for on-going research and product development. 1000. The exception is HP Halo which has quickly built a network connecting them to some of their key business partners. While it is technically possible to inter-connect the networks and pass IP traffic there are compatibility issues with multiple video compression standards. The stakes involved in being the first company to set “the standard” are huge. will revolutionize business in ways that can only be speculated on at the dawn of this technology’s inception. Let’s look at some of the trends that will be driving the industry in the coming decade: with two-screens and two-cameras mounted in the center of the displays connect to a system with four screens and a camera over each screen? How do you maintain lines of sight. joint-venture partners and customers globally.000 companies world-wide to understand the implications for the future of global business. however. These initial early adopters are using telepresence internally. The ability for the employees of these organizations to walk down the hall and effectively collaborate with their partners globally is illustrative of the promise and potential that telepresence offers. because of networking and compatibility issues the majority of the systems below cannot yet connect with the other telepresence systems not on their own networks.?) Effective Inter-Company Business The ability for organizations to instantaneously and effectively connect with vendors.

Effective Visual Collaboration and the Future of Global Business at the Speed of Light Telepresence and Effective Visual Collaboration Networks Today Publicly Announced Customers Company 3COM Accounting Firm AOL CapitalOne Cigna Commercial Bank (Global) Commercial Products Manufacture Deloitte Destiny Conferencing Domestic Banking Company Duke University Global Bank Global Consulting Firm Global Consulting/IT Services Investment Bank Media/Television company PangeAir Pharma PriceWaterhouseCoopers Private Equity Firm Public University University of Arizona * Contingent on Funding Existing Locations 4 sites 9 sites 6 sites 2 sites 8 sites 2 sites Planned/On-Order Public/Private Private Private Private Private Private Private Private Private Public Private Private Private Private Private Private Private Public Private Private Private Private Private Destiny Conferencing/TeleSuite — 100+ Sites — 50 Installed and 50+ On-Order — 3 sites 3-5 4 sites 3 sites 2 sites 3 sites 5 sites 10 sites 12 sites 3 sites 6 sites 50+* 3 sites 2 sites 2 sites 1 site 2 site 7 sites HP Halo Collaboration Studio — 60 Sites Deployed or On-Order AIG Financial Products Corporation AMD BHP Billiton DreamWorks HP GE Commercial Finance PepsiCo Novartis A Consumer Products Company 2 sites 10 sites 20 sites 5 sites 2 sites 3 sites Private Private Private Private Private Private Private Private MedPresence — 15 Operating Rooms & 10 Conference Rooms Deployed or On-Order Arizona State University Arizona Heart Institute Barrow Neurological Institute Translational Genomics Research Institute 1 site 3-5 sites 3 site 1 site Private Private Private Private Polycom RPX — 10 Sites On-Order Polycom Waldorf=Astoria 10 Sites 1 site Private Public Telanetix — 8 Sites Deployed and 5 On-Order Film and Television Production Company Investment Bank 2 Sites 2 Sites Private Private Teliris — 110 Sites Deployed or On-Order 3i BP 5 sites GE Healthcare GlaxoSmithKline 14 sites Lazard Pearson 4 sites Royal Bank of Scotland Teliris 2 site Vodaphone 5 sites Xchanging DDI IT Managed Service Provider Major Investment Bank Large Pharma Large manufacturer of mobile phone handsets and technologies Major studio and content provider Studio Major investment bank Major fortune 500 technology company Management consultant firm Private Private Private Private Private Private Private Private Private Private Private Private Private Private Private Private Private Private Private Private 10 sites 32 .Telepresence.

especially during peak hours.000 to $100. In fact. space for several hundred dollars an hour with equipment leased over a number of years.) getting into this business for a number of reasons: 1.The Future of Telepresence and Effective Visual Collaboration The Interconnection of Effective Visual Collaboration Networks Making logical and physical connections while maintaining an acceptable quality of service across multiple high-bandwidth IP networks is a difficult undertaking . Their own customers will demand connection between networks. has started an affiliated company. you may take away some senior executives and product managers as well. Technical challenges aside. The Human Productivity Lab has also developed a business model for publicly available telepresence. • Public availability has never been the core business or received much focus from the existing players with the most locations (Kinkos and HQ Global Workplaces) The medium also suffers from what I like to refer to as a “lack of a business-class consistency-of-quality. acoustics. Each FiOS-connected home has the theoretical capacity of 644 Mbps (or ~14 times the capacity of the 45Mbps DS3 circuits used by some telepresence solutions). lost productivity and the victimized lower back. publicly available locations and content headends on their own network by closing it to all but paying customers. lowering the cost and getting the business model right could supercharge usage. cultural proxemics. It’s not hard to see how dramatically improving the end-user experience. a franchise business model and is currently seeking investors and franchisees with a goal to launch with an initial 50 locations world-wide. then you take away the sales person and sales manager’s time. Public availability dramatically reduces cost-of-sales. Profitable business in its own right — With the right business model. I expect to see one or more of the telepresence group system providers (Cisco.These calls average $250 to $2. it is hard to imagine another business opportunity where the existing alternative. making interconnection the future of effective visual collaboration. global physical business travel. ft. First you take at least two environments out of production (that your other employees and/or customers would like to use to run their business). Polycom. The company has developed Small Office/Home Office (SOHO) and Consumer Telepresence Two converging trends in the coming decade promise to popularize telepresence for small/home business owners and consumers: • Fiber Optic Bandwidth to the Home — As I type these words. with the goal of launching a global network of public TeleSuite Systems in business-class hotels and shared-tenant office buildings. Publicly Available Telepresence Systems While publicly available videoconferencing has failed to set the world on fire. at least for now. etc. some solution vendors will resist the interconnection of telepresence and effective visual collaboration networks.000+ per event for what is essentially the rental of a very small physical space and $10. . Demonstrating an effective visual collaboration environment is a very expensive proposition even for the big boys. Global network of demonstration facilities that pay for themselves with the ability to grow exponentially. Most interestingly. Vendors will seek to leverage the value of connecting to the businesses. easy-to-use collaborative tools remain essentially non-existent. For potential customers evaluating a telepresence solution between Brand X that connects to some number of Global Fortune 2000 companies OR Brand Y that connects to some number of Global Fortune 2000 companies AND a global network of publicly available locations that differentiator could be substantial. etc. Teliris.” 3. Public availability dramatically improves the utility of their existing telepresence offering. it can be quite profitable to rent a 350-600 sq. David Allen. productive and cost-effective manner. PangeAir. Many corporate telepresence systems operate at capacity. produces as much real “pain” in hard-dollar costs. but Verizon limits the maximum available 33 . camera angle. This will not last long. 4. Having an overflow capacity for corporate users will be attractive. publicly available videoconferencing lives on with an ad-hoc network of thousands of global locations that see some use with the smart operators in the major metropolitan areas conducting hundreds of conferences a year. There are sure to be others.” where virtually every global publicly available videoconferencing room is different than every other room in lighting.000 in easy-to-operate equipment. Public availability allows the companies to flip the model around. Publicly available videoconferencing has remained moribund largely because: • The quality of the observant videoconferencing experience was/ is poor • The costs were/are too high • The majority of publicly available sites still use the limited bandwidth and poor reliability of ISDN networks for connections • Effective. 2. And to top it off. Powwow Virtual Conferencing Centers. one of the co-founders of Destiny Conferencing/ TeleSuite. . HP. and is currently seeking partners and investment. This dynamic will worsen as the use of the technology for intra-company business grows. that’s not to say there isn’t a market opportunity to connect business people around the globe in a comfortable. Now you have prospective customers paying to “try-it-before-they-buy-it. I look out my window at two 1’ x 4’ patches of fresh sod left by the Verizon sub-contractor who came through my neighborhood in Northern Virginia last week and laid fiber optic cable for Verizon Communications FiOS network. depending on the importance of the prospect.

health. because the company went into debt for the first time ever to do so. ubiquitous and inexpensive broadband connectivity. creating a more virtual work force. Better and Cheaper Telepresence Solutions Expect better and cheaper systems over time as the costs of the major components of telepresence solutions substantially drop while the performance of those components dramatically increases. Wired Magazine reported that Steven Spielberg wanted to extend the DreamWorks Virtual Studio Collaboration’s telepresence capabilities to his home in the Hamptons. The Rise of the Virtual Organization Where knowledge workers were once tethered to corporate headquarters and regional offices by the need to be connected to the company’s network and information resources. saw the introduction of the first video codec to offer high-definition quality at T1 (1. Scientific Atlanta. Expect the dynamic of higher quality and lower costs to continue. with between 60 to 70 percent of all employees working in locations different from their supervisors. a full 45Mbps DS3 of best effort Internet connectivity was ~$75. I expect the merging of low-cost. More HD codec solutions are on the way from other vendors. As more high-capacity fiber-optic submarine cables land around the world.Telepresence. issuing $6. WebEx and AOL Instant Messenger. it probably isn’t too much of a stretch to assume that the Cisco/Scientific Atlanta set-top box of the future could very well have an IP videoconferencing capability built into it.000 per month a decade ago. high-quality videoconferencing capabilities in PCs and set-top boxes to popularize something akin to the traditional videoconferencing experience first and then telepresence capabilities over time. I expect quality to continue to improve at the PC while I expect integration of higher-quality consumer videoconferencing capabilities to become standard in midto-high-end home theatre set ups in the coming years. Eventually this will lead to consumer solutions that address the human factors of participants and eventually a telepresence experience. Telepresence’s ability to improve the communications between executives. with quality and screen size going up as cost goes down. and effective collaborative tools like webconferencing are making it possible to cut the ties that bind. running $179. Cheap web cams and interactive consumer videoconferencing capabilities already abound. • Codec Technology — Last year. • The commoditization of consumer IP videoconferencing appliances and capabilities — Cisco Systems recently acquired the country’s second largest set-top box maker. the advantages of the virtual organization will be substantial. • Talent is no longer a function of geography (and/or cost-effectiveness in the case of work than can be performed in lower-cost geographies) • Improved quality-of-life for former road warriors and commuters • The ability to utilize talent that would be unavailable in a traditional 9-to-5 office environment given family.0 Mbps) speed from LifeSize Communications. high-speed bandwidth at home and low-cost. videoconferencing infrastructure. often for free. they will be competing with the PC as the consumer videoconferencing platform of the future. Some companies have already deployed videoconferencing capabilities to senior executive’s homes to improve productivity and for disaster recovery/business continuity. While Cisco and Scientific Atlanta illustrate the potential of the set top box. • Investing in effective visual collaboration systems to connect remote employees will be less expensive than owning/leasing/ maintaining brick and mortar facilities. supervisors. for a record $6. The eventual public availability of telepresence and effective visual collaboration solutions will also accelerate this dynamic. Skype. VoIP. or travel restraints.95 per month depending on delivery area. more and more executives will have these capabilities in their home. Effective Visual Collaboration and the Future of Global Business at the Speed of Light bandwidth to 30Mbps download and 5Mbps upload. though quality has been moderate to poor. geographically dispersed workers are on the rise. Cisco viewed this acquisition as strategic and critical.54MBps) and DS3 (45MBps) speeds to Gigabit Ethernet (1000MBps). and its soon to be released telepresence product line. in services like MSN Messenger.95-$199. For many types of organizations where knowledge. • Display Technology — DLP projection technology and flat screen is enjoying a similar dynamic. Evidently. information and services are the only products. IP bandwidth becomes more abundant and less expensive around the globe. According to a 2005 study from Nemertes Research. Expect the dynamic of higher speeds and lower costs to continue. Nemertes estimates that the number of virtual workers has increased by 800 percent within the last five years.5 billion in bonds to finance the purchase.9 billion. • Environments — Part of the high cost of engineered environments like HP Halo and TeleSuite is small production runs. 34 . Expect the cost of engineered environments to come down with volume and specialization. By way of comparison. remote workers and virtual employees but still provide a natural humanistic interaction will only accelerate and compliment this trend. In many ways. Examples: • Bandwidth — Bandwidth costs are dropping dramatically while the capacity available to enterprise moves from T1 (1. an increase in resolution of 10X over traditional set top videoconferencing systems. secure virtual private networks. With telepresence improving end-user acceptance and the cost of the technology and bandwidth dropping. the trend has already taken hold in PCs. 2005. Traditional set-top videoconferencing provider Emblaze VCON recently released a high-definition (720p) software-based videoconferencing codec that brings to most modern PCs a superb video quality and all the functionality to connect to traditional videoconferencing endpoints for less than $150 plus $100-200 for a good camera.xxiii With Cisco’s expertise in routing IP packets.

unveiled a surgical education solution the company had developed with Barrow Neurological Institute in Phoenix. The Eller College of Management’s distance learning telepresence classroom connected to a remote classroom in both lecture mode and face-to-face The professor had the option of “stacking” the life-size virtual students on a video wall situated behind the local students in Tucson while lecturing or utilizing a separate video wall in the front of the classroom to connect the virtual students and local students face-to-face for discussions or collaborative case work. The program graduated three MBA classes using the technology and essentially broke even on the cost of the equipment through the tuition it earned from students who wouldn’t otherwise have signed up. an off-shoot of Destiny Conferencing (which utilizes the same core technology as the TeleSuite System and Polycom’s RPX). a TeleSuite customer. In January 2006. the Eller College of Management at the University of Arizona launched the world’s first MBA program taught via telepresence. The course connected a professor and students in a telepresence classroom designed by TeleSuite (now Destiny Conferencing) in Tucson with other MBA students in Santa Clara using a TeleSuite System the college would rent from 3COM.The Future of Telepresence and Effective Visual Collaboration Distance Learning Will Become a Key Telepresence Application In 1999. physician consultations. The course was the only part-time option available in the Silicon Valley to get a Top 50 MBA. Arizona and funded through the generosity of Karl Eller. The MedPresence Conference Room is a telepresence solution for surgical education. MedPresence MCR 400 with Students MedPresence MOR 400 in an Operation 35 . an innovative telepresence investor and philanthropist. The system gives medical students. and the development of surgical tools and techniques. case reviews. peer physicians and developers of surgical tools and techniques the ability to be “present” in the neurological operating room at Barrows and interact in real-time with the institute’s world-class surgeons and specialists during an operation. MedPresence. two nights per week.

medical schools and other hospitals allowing the surgeons at Barrow and future MedPresence customers to share their specialized knowledge around the world. should prove to be equally as enthusiastic about telepresence distance learning as universities and medical schools. Effective Visual Collaboration and the Future of Global Business at the Speed of Light Unlike the traditional telemedicine view of the localized area of the operation. the greater the value of being connected to the network. and the utility of being connected to the network will expand exponentially. with their need for both internal training and training for customers. These content “headends” will accelerate connections by allowing their customers (and themselves) to reduce the expense of the relationship by connecting directly for virtual training or consulting. and Consulting PriceWaterhouseCoopers Ernst & Young Deloitte & Touche Capgemini Accenture BearingPoint Wall Street — NASD Training & Complex Vendor Training and Certification Kaplan Financial-NASD Registered Representative and Principal Training Bloomberg — Market Data Systems Training and Certification Reuters — Market Data Systems Training and Certification 36 . and medical informatics and imagery can be delivered to outside panels on the 4’x16’ video wall or high-resolution displays mounted between each two locations in the MedPresence Conference Room. From the operating room. product certification or on-going consulting relationships) will help drive inter-company visual collaboration. Artist’s Rendition of Destiny Conferencing’s design for a 36 seat distance learning TeleSuite System Headends: Content will be King Companies that have complex vendor/customer relationships involving frequent direct interaction (such as instructor-lead training. As more and more headends offer more and more “content. the view through the operating microscope. Corporations. the MedPresence solution provides a panoramic view of the entire operating theatre allowing remote participants the ability to witness the complete scene: What equipment is being used.” the network will grow rapidly.Telepresence. Examples of Existing and Potential Content Headends: Potential Content Headends with Existing Telepresence Capabilities in Green IT Training / Certification American Management Association Cisco Systems — Product Certification Sun Microsystems — Instructor lead training Executive & Professional Continuing Education The Wharton Business School — MBA for Executives MIT — Professional Institute — Executive Continuing Education Duke University — Fuqua School of Business MBA University of Arizona — Eller College of Management MBA Medical Education and Training Barrow Neurological Institute — Surgical Education Translational Genomics Research Institute — Genomics Public Accountancy. The more Content Headends. cer tification and/or audit/ consulting to support the telepresence early adopters. MedPresence has also developed a por table version of the conference room that can be transpor ted to seminars. the positioning of the surgical staff and the pace of the procedure. Expect individual headends to star t small. Internal Audit. offering limited training. the surgeon can see and interact with the students and remote par ticipants in real-time in whatever global city they happen to be located. The ability to cost-effectively deliver this level of specialized instruction and real-time interaction will revolutionize the delivery of education globally. The view of the localized area of the operation.

with 2006 set to be number seven. which saw five bankruptcies in 2005 and is still reeling from six straight years of net losses. Reducing either side of this equation creates a vicious cycle for the carriers.45 a gallon today. the price per barrel has more than doubled to $71. and a major increase in the price of jet fuel would substantially increase these losses even further and most likely see marginally profitable routes and flights eliminated making air travel even less convenient. The ability to effectively collaborate with other firms.xxvi Additional airline bankruptcies will inevitably lead to reduced competition. Rising fuel prices equals higher ticket prices. Dramatically more expensive oil could deal another significant blow to the international aviation industry. Higher ticket prices leads to . When Cigna deployed two TeleSuite Systems between its offices in Philadelphia and Bloomfield. which equals higher costs and less convenience. the survey found that price was not given as the most important factor in selecting an outsourcing partner.S. The two most important factors were “cultural fit” and “quality of service. Most look at outsourcing from the point of view of cutting costs. Now. A number of potential geopolitical risks. 89 percent of U. “The inefficiency of knowledge workers is partly the legacy of the 19th-century belief that a modern company tries to do everything for itself.76 as of this writing (June 12th. From 1994—2004. reduced demand for seats. The ability to address these cultural and quality issues through an effective collaborative experience is sure to improve and accelerate the outsourcing paradigm.2 billion.” which were each chosen by 24 percent of respondents. That’s why when you outsource you may actually increase costs. with less than half of its planned deployment of 24 Halo Collaboration Studios active (no wonder the company is considering doubling that number in the future). commercial and executive aviation have provided cost-effective transportation for business travel largely thanks to relatively inexpensive jet fuel from relatively inexpensive crude oil. I believe you should outsource everything for which there is no career track that could lead into senior management. it is only half of the outsourcing dynamic. 37 . What outsourcing does is greatly improve the quality of the people who still work for you. we’ve discovered outsourcing.. making a significant impact on the affordability and convenience of air travel.82 a gallon to $3. British. Whereas a total-quality-control person employed by the company is busy six weeks a year and the rest of the time is writing memoranda and looking for projects.The Future of Telepresence and Effective Visual Collaboration Accelerated Adoption for Economic and Geopolitical Reasons Outsourcing When most people think of outsourcing. which I think is a delusion. offering specialized knowledge and ser vices will re-engineer and vir tualize the corporation even fur ther. 2006) and the price of jet fuel has risen from $0.xxvii HP reported a two percent reduction in its $800MM+ travel costs in Q4 2005. but you also get better effectiveness. Since 2004. it eliminated thousands of flights a year. foreign and domestic. but I would also say we don’t yet really know how to do outsourcing well. . the price for a barrel of NYMEX light sweet crude averaged between $10 and $30 a barrel. The growth of telepresence and effective visual collaboration will worsen this dynamic by further reducing demand for commercial aviation among business travelers who are the airlines least pricedependent customers. and Asian corporate technology decision makers at their annual conference expected to increase their outsourcing budget in the next 12 months. natural disasters and resource economics issues could very well send the price of oil even higher. In a March 2006 survey conducted by Patni. which reduces demand for seats. This has been advice of limited value because of the cost savings that the physical proximity of employees has provided. Less passengers leads to even higher ticket prices as carriers cover flying costs at reduced capacities.. Interestingly. While this trend will be accelerated by telepresence and expand to more and more white-collar occupations. the first thing that comes to mind is the outsourcing of labor to lower cost geographies. a technology outsourcing company and reported on by UPI.xxiv And it won’t stop there. The Higher Costs and Reduced Convenience of Physical Travel For decades. Management Guru Peter Drucker once recommended outsourcing everything for which there is no career track that could lead into senior management.” — Peter Drucker The commercial aviation industry relies on cheap seats and full planes. thank God. Its ticket volume grew so low the company’s US Air representative even called to inquire about the financial health of the company. Conn. When you outsource to a total-qualitycontrol specialist. he is busy 48 weeks a year working for you and a number of other clients on something he sees as challenging. .xxv The International Air Transport Association recently raised its 2006 net loss forecast to $3 billion from $2.

Telepresence. Iran has the ability to use the “oil weapon. as much as four million barrels below normal — roughly equal to what all of the OPEC partners collectively took out of production during the devastating 1973 embargo. a loss equivalent to approximately one-third of America’s current daily consumption of crude oil.” xxxiii Should the conflict escalate. With high oil prices already wreaking havoc on commercial Expanded War in the Middle East The specter of an expanded war in the Middle East looms ominously on the horizon. Growth has averaged one to two percent a year as the third world continues to industrialize.S. has produced less oil and imported more. including this author.xxxii In early June 2006. refining capacity. and the region contains 46 percent of U. Peak Oil “Peak oil” refers to the long-term depletion of oil production globally. Terrorism/Asymmetrical Warfare against Oil Production The potential of terrorism and asymmetrical warfare against oil production facilities also threatens oil prices. Expanded war in the Middle East would likely arouse increased terrorism directed towards U. Even as long as seven months after an attack. natural disasters and the ongoing problem of global oil field depletion could alone or together send oil over $100 per barrel.S. aircraft carrier task forces are joining a third already in the region for what many observers believe to be an imminent confrontation.The net result to both domestic and international business: Higher physical travel costs in both ticket prices and lost productivity. As fields dwindle. definitely the energy flow in this region will be seriously endangered. Rigs. Energy experts have predicted that such an action could double or triple the price per barrel.xxix 38 . And this was only one of a number of attacks the kingdom saw against oil industry related targets this year. oil-producing countries and the world as a whole would all follow a similar bell-shaped curve with rising production followed by a production plateau. but should the theory prove true. CIA analyst Robert Baer has predicted in his book Sleeping with the Devil: How Washington Sold our Soul for Saudi Crude that: At the least. and since then the U. it wouldn’t take many more increases in the price of oil to deal a mortal blow to many carriers. oilfield production (excluding off-shore. Indeed. imposing additional costs in lost productivity and the potential reluctance of key personnel to engage in business travel to certain regions. airlines and citizens abroad. Geophysicist Marion King Hubert first coined the term in the 1950s as “Hubert’s Peak. Expanded War in the Middle East.S. deep-water. which flies over two times the speed of sound over a 100mile range and hugs the surface of the water to minimize its radar signature. In 1956. Hurricanes Rita and Katrina destroyed 109 oil platforms and nine drilling rigs in the Gulf of Mexico.” postulating that oil production in oil fields. which borders Iran and is 34 miles at its narrowest junction. Natural Disasters The Gulf of Mexico accounts for 27 percent of U. In fact. as compared with its January 2003 2.S. At this writing in early June 2006.9 million barrels per day. and then eventual depletion. many of them staying off-line for months during repairs from the damage they took. etc.” not only restricting its own oil supplies but completely shutting down oil shipments through the Persian Gulf. Increased Terrorism. The gulf region contains 60 percent of the world’s known oil reserves and 18 million barrels a day (representing about 40 percent of internationally traded oil) must pass through the Strait of Hormuz. the adoption of telepresence and effective visual collaboration would necessarily accelerate. A number of potential geopolitical events. the majority of oil-producing countries have seen their oil production peak. platforms and refineries were secured and evacuated prior to and during each hurricane. Oil facilities in Iraq have endured 298 recorded attacks since June 2003. Hubert predicted that conventional oilfield production in the United States would peak in 1970. As of December 2005. Iraqi production averaged around 1. a position which earned him significant scorn at the time but proved prophetic. bringing oil production in the region to a halt. Peak oil theory has its skeptics.8 million barrels a day to roughly a million barrels for the first two months post attack. Saudi Arabian security forces foiled an attack on the Abqaiq facility in February this year when two separate cars carrying explosives attempted to ram through a gate at the facility. Iranian Ayatollah Ali Khamenei publicly threatened to disrupt oil supplies in the region with the following statement: “If you [the United States] make a wrong move regarding Iran.S. Conventional U. Iran continues to defy the United States’ demands to halt its uranium enrichment activities and threatens dollar hegemony by opening an oil bourse on the island of Kish to trade oil in Euros. Effective Visual Collaboration and the Future of Global Business at the Speed of Light Dramatically Higher Oil Prices — Peak Oil.xxxi The Iranian military comes equipped with the Russian Sunburn anti-ship missile. a moderate-to-severe attack on [Saudi Arabian Oil Production Facility] Abqaiq would slow average production there from 6.58 million barrels per day production rate. two U. Natural Disaster or All of the Above. A hurricane season just as bad or worse could also dramatically increase oil prices. the global demand for oil is soaring. including the majority of OPEC countries. Abqaiq output would still be about 40 percent of pre-attack output. Alaska. This would result in tighter security at airports.) did peak in 1971. oil and natural gas production.S.xxviii In 2005.

and 6.xxxvii • The Iranians are in the process of opening an oil bourse to be denominated in “petroeuros” vs.S.Taiwan and China. • U.’xxxvi A number of other factors seem to suggest a coming decade of dollar weakness: • Several foreign central banks have publicly reduced their dollar reserves including: Sweden.xxxix Norway has also proposed a Euro-denominated oil bourse.S. • The cost of acquiring U. and Russia President Vladimir Putin has proposed starting a non-USD denominated bourse in Russia that would trade oil in Rubles as well as publicly stated his desire to make the Ruble an internationally convertible reserve currency. recently predicted that the additional depreciation of the dollar could be ‘of the order of one-third to one-half. • The cost of travel will become more expensive as foreign oil producers demand more dollars for their oil. “petrodollars. the dollar has declined 22 percent against a trade-weighted basket of seven currencies tracked by the Federal Reserve since 2001.” which will further weaken demand for the dollar among nations that have traditionally had to hold large $USD reserves to pay for oil imports. which can be conducted more effectively by telepresence and effective visual collaboration.The Future of Telepresence and Effective Visual Collaboration The Decline of the Dollar As of mid-May 2006. there seems to be little positive economic news that could possibly reverse this trend. The Organization for Economic Co-operation and Development (OECD).S. The dollar seems poised for a further decline. Syria. Indonesia.S. A declining dollar will help drive adoption of telepresence and effective visual collaboration solutions in a number of ways: • Telepresence and effective visual collaboration solutions in which the U. a trend which shows no signs of slowingxl.” and substantial increases in both the Producer Price Index and the Consumer Price Index. 2005.Thailand. in 2005. assets. stimulating foreign trade. 31st.xxxiv The dollar has lost 7. the biggest drop since the index was established in 1987. versus the Euro.347 Trillion at this writing. India and Russia have all expressed support for the boursexxxviii.1 percent of its value. deficit hit a record $805 Billion. • The U. has competitive advantage will become less expensive in EMEA and Asia-Pac.27 Trillion under the Greenspan Fedxxxv and a decision by the central bank in March to simply quit publishing the total amount of $USD in circulation (known as the M3) fueling inflationary fears among $USD holders worldwide. Coupled with a ballooning national debt of $8.4 percent of national income. China. companies will be reduced. or 6. and telepresence and effective visual collaboration will become an attractive option for foreign owners to manage their new U. a generally accepted deflation of the “housing bubble. fueled by a 72 percent increase in the money supply over six years to a record 10. The End 39 .S. while others including Japan and South Korea have announced their interest in doing so. Venezuela. India. exports in general will become cheaper. an economic forum of 30 of the world’s leading market democracies.2 percent of its value versus the yen since Dec.

Atlanta and Miami and managed multiple sales forces running diverse sales models simultaneously. HSL has also held a variety of sales. a skunk works that tested and evaluated technologies and business process improvements with the potential to improve productivity. effectiveness. Director of Sales. where the endeavor was to develop a wire-speed data center vir tualization switch to For tune 500 powerhouse SunGard. HSL opened outside sales offices in New York. or improve business communications within the organization. 40 . the first commercially successful telepresence provider and an innovator in visual collaboration. HSL co-founded and served as President and Chief Product Officer of Powwow Networks. consulting. marketing. HSL served as Vice President of Business Development at TeleSuite Corporation. web conferencing and rear projection SMART Board interactive whiteboards into templated collaboration environments delivered as a flat-rate managed service with true QoS over disparate IP networks. and National Sales Manager at Savvis. Boston.Telepresence. the global leader in information availability. and The Demonstrator. Prior to Savvis. Some of the technologies the Lab rolled into production at Savvis included: Webconferencing. Effective Visual Collaboration and the Future of Global Business at the Speed of Light About the Author Howard S. reliability and cost of both visual and data collaboration. HSL started and ran the financial vertical sales organization at Savvis Communications. Blackberry Messaging. SMART Board Interactive Whiteboards. HSL was a senior account manager at DIGEX when the company was one of the first and fastest growing private Internet Service Providers in the world. During HSL’s tenure at Savvis. Collaboration Rooms. he founded the original Human Productivity Lab. IP Videoconferencing. Chicago. and business development “gigs” at firms ranging from star tups such as Spontaneous Networks. Howard can be reached at HSL@HumanProductivityLab. Holding positions that included Regional Sales Manager. Lichtman (HSL) is a productivity-focused technologist and consultant with specialties in telepresence and visual collaboration. organizational and personal productivity and sales model optimization. a trade show display designed by HSL to showcase SAVVIS’ solutions for financial industry connectivity. sales management. Prior to TeleSuite. Cordless Headsets. San Francisco. which specialized in managed networking and managed service solutions for trading floor technology and market data applications for Wall Street. Herndon. Before he developed his interest in telepresence and visual collaboration. a visual collaboration start-up looking to improve the human accelerate the sales cycle. Franklin Covey Time Management. Powwow Networks developed an alpha product that combined IP video.

RFI/RFP Development. QuadraMed LeMoyne Zacherl — CFO. In 2007 the Lab will be co-sponsoring TelePresence World 2007. came to a number of important realizations: • In high-growth and/or rapidly changing knowledge-centric The Lab’s website at www. you can achieve faster growth (in sales. act on. Financial Vertical — SunGard Chris Van Waters — CIO. The Lab was founded by Howard S. evaluate. and sales model optimization.HumanProductivityLab. disseminate and archive information. the Lab tempers its enthusiasm by a firm understanding of technology’s limits.000 hits per month from over 65 different countries with a growth rate of over 15 to 30 percent a month in 2006. while running the financial vertical sales organization at a global internetworking company. personal and organizational productivity. and analysis on corporate and organizational telepresence and currently averages over 110. market share and shareholder value) by investing in and improving the productivity and business communication capabilities of your existing human capital. communicate. a productivity-focused technologist who. 41 . a landmark series of CXO level conferences dedicated to telepresence. www. research. Contact Information Human Productivity Lab 43861 Laurel Ridge Drive Ashburn. opportunity and treasure. understand.About the Human Productivity Lab About the Human Productivity Lab The Human Productivity Lab is a consultancy specializing in telepresence and visual collaboration. we always put the Human First. • Increasing the return on human capital is possible by leveraging technology to improve your sales and knowledge workers ability to find. VA 20147 O (512) 828-7317 F (480) 393-5435 Info@HumanProductivityLab. presence. especially with respect to the all-too-often neglected “Human Factors” of implementation.PowwowVirtual. The Lab provides telepresence consulting services to vendors and end users including: Telepresence Solution Design. access. www. and unified communications. and Market Research among other engagements. While unequivocally pro-technology. its business model for publicly available telepresence. The Lab’s Newsletter The Art of Productivity follows the telepresence industry and provides news you can use to improve your personal effectiveness The Lab’s Board of Advisors includes: Jeff Dalton — Regional CTO.HumanProductivityLab.” Failing to take it into account leads to wasted time. Stewart Title Brent Houlahan — Former CTO of NetSec and Vice President of Managed Security Services at MCI Thomas Jackson — CEO of Mission Benefits and former CEO of TeleSuite Tim Nielsen — Vice President of The Lab is also seeking partners and investment for Powwow is currently the #1 site on the Internet for news. Learning Tree International While Productivity is our Middle name.TelePresenceWorld. Acquisition Consulting. • The most important and most often neglected element in successfully implementing technology is the “Human Factor.

org/wiki/Retina The Vision Thing: Mainly in the Brain.cs. Brookes. 1978.ucdavis. Page B1 http://newsroom. hasbrouck. Davis.html Institute for the Analysis of Global Security. 1967. 26: 22-63. and Pierce. story?id=1934560&page=1 Oil price surge may delay airline recovery. http:// www. April 7th. 1970 Wellens. “A Device that Provides an Eye-to-Eye Video Perspective for Interactive Television. xviii ii iii xix ix xx x xxi xi xxii xii xxiii xiii ix Wikipedia : http://en.. Michael. A. 2006. pp.pdf Travelocity Website http://www. no.hanafos. Sorrel.4 (August): 455 469. “Evaluation of an Interviewer as a Function of Interviewer Gaze. Ready for the Hurricanes? By Rober t Aronen June 9. Mark. Oliver Staadt. 1987. Philadelphia. but price tag poses 1978. 2005: http://www.3 (October): 271 275.1.” Journal of Social Psychology 138. Charles A. University of Pennsylvania Press. Eliot. and Brooks. San Diego Union-Tribune. Melissa M. 14 No.html Presentation: Human Factors and Perception — Dr. Page 30.” Journal of Social Psychology 127. http:// www. Effective Visual Collaboration and the Future of Global Business at the Speed of Light Bibliography i xvii Bureau of Transportation Statistics Press Release — February 2nd 2006: http://www. 1975. “The Effect of Touch and Gaze Upon Compliance and Interest of Interviewees. New York: Cambridge University Press. DISCOVER Vol. Simonsen.htm xv xvi 42 .pdf.. 06 | June 1993 | Biology & Medicine : http://www.html Hewlett-Packard’s new Halo video-conferencing system brings people face-to-face from a world apart.. and Cook. “Effects of Nonverbal Behavior on Perceptions of Power Bases. Argyle.html FAA Aerospace Forecasts Fiscal Years 2006-2017. no. xxx x xxiv ABC News Story: Higher Fuel Prices Mean Higher Airfares. “Attributions of Self Esteem as a Function of Duration of Eye Contact. Joylin M. Department of Computer Science. Kingsley. Ibid xi xxv xii xxvi xiii xxvii Author’s conversation with Linda Dykas. “Cortical Arousal and Social Intimacy in the Human Female Under Different Conditions of Eye Contact. org/iraqpipelinewatch. Page 38. 4th 2005. Page 9: http://www.5 (October): 715 755.” Behavioral Processes 3. 1993. Gale.” Behavior Research Methods and Instrumentation 10.html The Practical Nomad: FAQ About Airline Bankruptcies http://www.Wainhouse Research.” Journal of Social Psychology 133. May 7th..25-26. 2006 Motley Fool http://www. no.pdf FAA Aerospace Forecasts Fiscal Years 2006-2017. Kendon.terradaily. 2006 Found at: http://www.faa.bts. Gaze and Mutual Gaze. The Brain Sees What We Don’t. http://graphics. Charles I. Live Science. David. Rodney. blindsight.livescience. “Some Functions of Gaze Direction in Social Interaction.pdf A History of Videoconferencing Website: http://myhome. Richard A. essays on body motion communication. University of Kleinke. mft06060922. Managing Conferencing Services for Success. Reinforcement of Subject Gaze.6 (December): 681 683. Dale E.wrplatinum. Herman. Agence France-Presse http://www. Business Week Online June 5th. Hornik.abcnews. http://www. RL Kinesics and context. 1998.” Acta Psychologica. and VR_Human_Factors. Cigna’s corporate travel manager in 2003. 2006 Latest Acquisition Gives Cisco Entree to Consumer Market By BOBBY WHITE February 28.faa. Jacob. Chris L.travelocity.iags. Droney. and Berger. November 1st. no. Oct. and Interviewer Attractiveness. Anthony.pdf bestanden/4121WP-ManagingConf4Success-v3.fool.htm xxviii xiv xxix Hurricanes Destroyed 109 Oil Platforms: US — Costs were for a 21 day advance economy fare and a 7 day advance business class fare from NYC to Shanghai on domestic” Journal of Personality and Social Psychology 1 (Januar y 31): 115 122. com/~soonjp/vchx. July jun-93/features/thevisionthingma227/ Ibid latest_acquisition_gives_cisco.

http://www.energybulletin.safehaven.http://www. com/article-5131.html The Greenback’s long downward spiral by Mike Whitney.pdf Oil Prices 1994 — 2006 Price Graph — Wikipedia Entry: Petroleum http://en.php?story=20050118055547492 Teheran hints it may use oil weapon in nuclear row. 2006. March 11th.atimes. May 4th 2006: http://www. By Christopher Swann.doe. 2006 http://www.opednews. forbes. article. May 9th 2006: http://www.html xxxiv Hubbert peak graph from public domain document “Strategic Significance of America’s Oil Shale Resource Volume I Assessment of Strategic Issues” at http://www.ft.htm OECD Warns that the rebalancing of the US deficit may drive dollar down sharply. Clinton’s Rewarded Traders May 22. 2006 http:// reserves/ publications/Pubs-NPR/npr_strategic_significancev1.fe. 060504_the_greenback_92s_long. May 18th.asp?pp_cat=17&ar t_ id=20121&sid=8267065&con_type=1 Bush’s Bond Market Favors Borrowers. The Standard.php?CID=2477 xxxvii Dollar catching Asian flu By Alan Boyd. by Gary Policy Watch — The Washington Institute for Near East Policy. 2006 . The Financial Times Published: March 14 2006 http://news. May Bloomberg:’s Awesome Nuclear Anti-Ship Missile.html xxxviii xxxii The Sunburn .org/wiki/Crude_oil xxxv Central Bankers’ Worst Nightmare .com/finance/feeds/afx/2006/05/23/afx2765701.indiemediamagazine.the Gold and Bond Vigilantes.washingtoninstitute.html xxxvi Artist Rendering of the upcoming 4th generation Teliris display system 43 . 2006: http://www. By Mark Gaffney 11-2-4 .Monday June 5th.Bibliography xxxi Facing Iran’s Challenge: Safeguarding Oil Exports from the Persian Gulf.htm Collapse of the petrodollar looming by Dave Kimble. June 7th 2006: apps/news?pid=10000087&sid=agpZpPfkNMZM&refer=top_ world_news xxxix xxxiii xl US deficit data fuel anxieties on cms/s/db63450e-b383-11da-89c7-0000779e2340.

hotel developers David Allen and Herold Williams founded TeleSuite. The company’s ATK Services division handles complex AV integration projects such as wiring every Apple Computer store in the US for voice. Sales and Development Best know for providing the sound for such complex productions as every SuperBowl since 1998. Chief Executive Officer Scott Allen. In 2003. Company: Destiny Conferencing/TeleSuite Company Website: www. Vice President. Initially founded as an R&D shop the company built early TeleSuite Systems from Styrofoam and duct tape to understand the geometries of getting the environment right. video. The Emmy Company Founded: 2005 Employees Dedicated To Visual Collaboration: 30 2005 Revenue: N/A Public/Private: Private Key Executives: David Allen. The company’s assets were sold back to cofounder David Allen (Herold Williams is no longer with the company) and the company was re-organized in 2005 as Destiny Conferencing. capable of a 4MBps video stream (other codecs can be used) • AMX Control System with media archiving capability. 44 . laying off a number of staff in 2004. The Intelligent Switched Telepresence control system gives each participant a small microphone/control unit installed under the lip of the table. AudioTek Corporation has more on its plate than mega events. Effective Visual Collaboration and the Future of Global Business at the Speed of Light Telepresence Company Profiles Company/Division: AudioTek /ATK Services Website: www. and can accept other codecs or retro fit an existing deployment of traditional videoconferencing systems to improve the human factors.Though I was unable to experience an actual call when I visited the facility. a board of directors’ dispute took management away from the co-founders and the company foundered. which hides two Sony BRC 300 three chip cameras behind the display at eye-level • The Sony G 70 codec. the company struck a strategic partnership and manufacturing agreement with Polycom in May 2006 whereby Polycom specifies and private label OEM’s six TeleSuite based Systems under the Polycom RealPresence Experience (RPX) brand. the first commercially-successful telepresence provider. • 61” data collaboration Plasma display The I VISION starts at $165. The company has benefited from strong support from visionary telepresence investor Karl Eller. the company shipped its first commercial TeleSuite Systems in 1997. The Grammys and the Olympics. President Ted Carter. As Destiny Conferencing. after failing to find a traditional videoconferencing solution good enough to keep their well-heeled guests from leaving their Caribbean resort early for business meetings in less exotic locations. ATK had also done good work tying the multiple devices together into an easy-to-use AMX touch-sensitive control unit. Key Executives: Mike Stahl. The company’s I VISION direct telepresence experience marries the following technology and capabilities: • Digital Video Enterprises 50” true eye-contact display. the Academy Awards. Director of Customer Service In 1993.Telepresence.destinyconferencing. allowing a user in a multi-site conference to take “the conch” —and push a single button that switches the focus of all remote sites to that participant after a quick screen fade. total room control for lighting. The intelligent switched presence experience is like watching a live broadcast TV show with dynamic scene switching between Company Founded: 1983 2005 Revenue: N/A Public / Private: Private HSL’s Analysis The ATK I VISION is the first small group (1-4) telepresence solution that utilizes the Digital Video Enterprises true eye-contact display technology and intelligent switched presence. I liked the ceiling-mounted document camera with a high magnification for collaborating on documents or physical objects such as circuit boards between remote locations. ease-of-use and collaboration. the founder of Eller Outdoor Media and former Chairman and CEO of Circle K. Chief Operating Officer Rob Whatley. The company’s turnkey solution utilizes the Sony G70 codec to produce exceptional video quality for a non-HD system. both of which ATK helped develop. President Duncan Foster. The system temporarily presents a wide shot of the table while the close shot of the designated speaker is acquired.000 and will fit into most conference rooms without any make-ready other than appropriate bandwidth. The company has recently produced the first turnkey small group (1-4) Telepresence solution to use Digital Video Enterprises’ true-eye contact display technology and Intelligent Switched Telepresence control system.atkservices. and data. shades and conference set up • Ceiling mounted high resolution document camera with laser alignment.

I see the Polycom partnership providing a number of pluses: • Further legitimizes telepresence (HP and Cisco got the ball rolling nicely in 2006. While it remains to be seen how many prospective customers will choose to buy the equivalent solution from Destiny that can be purchased from Polycom. and international network of resellers and channel partners. Destiny seems ideally situated to benefit as telepresence goes mainstream. and data collaboration tools (areas that have been a weakness at the company). As telepresence continues to gain acceptance. engineered telepresence environments that are deployed as a “room-withina-room” and can be moved if required. DVE holds 11 patents (with several pending) in various aspects of true eye contact videoconferencing and telepresence. Steve McNelley. but Polycom’s entry into the industry is sure to accelerate “mainstreaming”). the ability to deliver effective telepresence environments at more cost-effective T1/ E1 speeds is an attractive proposition for those organizations that can’t afford the operating costs of systems requiring 45MB of bandwidth. and the system has proven itself through its use at the Eller College of Management at the University of Arizona. privately held corporation specializing in telepresence solutions that provide true eye-contact between participants and holographic displays for telepresence. Destiny also manufactures a telepresence solution for surgical education. I expect that other universities and corporations will take the plunge. Destiny’s strategic partnership with Polycom is the most exciting news from the company in quite some time. who throw 45MB of bandwidth at each location. • Provides much needed technical expertise in IP video/audio and video network/infrastructure management. a grand slam home run for the boys from Dayton. Polycom provide a level of comfort with public and audited financials and a stability that TeleSuite had lacked. Co-founder Digital Video Enterprises (DVE) is small. • Transparency and Viability — After years of watching the big ones get away because so many potential customers were hesitant to bet on financially shaky. a partnership between Jeff Machtig. eventually creating a network of “content” that will allow organizations to access specialized instruction from around the world. please find the technical specifications of the TeleSuite System on page 49 in the write-up on the Polycom RPX. HP and Teliris.950 per month for the two screen 200 series and $8. The company’s large distance education environments are a strong differentiator from the rest of the pack.000 Destiny Conferencing’s network and concierge/help desk services start at $5. an optics and special effects inventor.dvetelepresence.Telepresence Company Profiles Polycom RPX customers will also have the option of purchasing a Polycom branded and specified RPX VNOC and Circuit Ser vices IP network and concierge/help desk services from Destiny. the company can’t help but benefit as Polycom drives the growth of compatible telepresence environments. modular. The environments range in size from four participants facing a 4’x8’ video wall starting at $249. Steve McNelley. MedPresence. AOL and Cigna among others. which include PricewaterhouseCoopers.000 to 36-seat distance learning environments where participants sit in tiered seating and face a 5’x20’ video wall. With the Eller College of Management. Company: Digital Video Enterprises Website: www. PangeAir LLC. sales force. HSL’s Analysis The TeleSuite System (including the Polycom RPX models) with their rear-projection semi-seamless video walls provide the most immersive experience of the major group telepresence systems providers. • Marketing and distribution muscle (another historic TeleSuite weakness) that should be able to nicely leverage Polycom’s tier-one marketing Company Founded: 1999 Employees Dedicated To Visual Collaboration: Two 2005 Revenue: N/A Public / Private: Private Key Executives: Jeff Machtig. TeleSuite Systems are free-standing. they lack the video quality achieved by its main competitors. Still. Duke’s Fuqua Business School and the Barrow Neurological Institute already on the network. is working on launching a global network of publicly-available TeleSuite Systems in business class hotels and multi-tenant office buildings. scheduling and reservation systems. Through an affiliated company. graduating three remote MBA classes. However. The company was founded in 1995 as Videotronic Systems. and Dr. To avoid repetition. The company’s product line falls into two categories: True Eye-Contact Telepresence and Display Solutions — The company makes a variety of display and bundled solutions that use 45 . a psychologist whose doctoral work and career has been focused on the importance of eye-contact in human communications. Another affiliated company. Co-founder Dr. $559. marketing and virtual reality applications. privately-held TeleSuite. This network enables and connection and collaboration with the company’s existing network of For tune 1000 customers.950 per month for the four screen 400 series.

Most prospects have to travel to the company’s R&D facility in Irvine. Having been released less than three weeks ago at this writing. can’t be ordered in increments less than 15. allowing a user’s computer monitor to remain dedicated to data collaboration. • Personal/Executive Systems — The DVE Eye-Contact Silhouette provides a dedicated eye-contact display solution for the desktop. which means that it’s most affordable desktop display solution.70B Public / Private: Public (NYSE: HPQ) Key Executives: Vyomesh Joshi. Marketing Manager. Executive Vice President. so customers wanting one to fourteen units have to get on a waiting list. • The company’s Telepresence Podium works uniquely well for remote presenters. However. eye-contact telepresence is an experience. Company/Division: Hewlett-Packard/Halo Collaboration Division Website: http://www. • Small Group Roll-About Systems — One to four participants with a locking cabinet that rolls through a standard 30” door. Effective Visual Collaboration and the Future of Global Business at the Speed of Light eye-level cameras behind a piece of silvered glass known as a beam splitter. the $7. making them especially powerful in oneon-one conferences. including: • Telepresence Podium —Projects a life-size image of a remote presenter as if he or she is standing at a podium. which creates real size images of conferees in your office. don’t exactly let folks walk in off the street. With a 40” true eye-contact display and LifeSize Communications’ camera and codec bundled into a turnkey package. in turn. General Manager. Senior Vice President and General Manager. the ETS lets life-size remote participants talk with true eye contact in high-definition. • In my opinion. The podium itself has a camera that allows the remote presenter to see the room he is presenting to. The company’s size keeps its production runs small. investment banks. getting experienced is hard to do unless you visit a DVE customer. the image of the remote participant is reflected off the beam splitter from an upward-facing flat screen display. • Transparent Telepresence Display —Presents floating 3-D objects in addition to remote participants for marketing purposes.Telepresence. Imaging and Printing Group (IPG) Steve Nigro. the remote audience can see the presenter’s demeanor and gestures clearly. eye-contact experience in a small footprint. DVE’s true eye-contact display solutions are available in a variety of formats: • Immersive Group Systems —DVE has a number of designs for immersive group systems with true eye contact and multiple camera arrays that work with six to eight participants. HSL’s Analysis Digital Video Enterprises remains the undiscovered jewel of the telepresence industry. and most movie studios. • Virtual Observer — A portable production studio for distance learning and training that tracks and captures stand-up presentations. etc. mobile lockable cabinet for an executive’s office or small conference room. The company also has a demonstration Division Founded: 2003 Employees Dedicated To Visual Collaboration: N/A 2005 Revenue: $86. Like telepresence group systems. including: • The DVE Telepresence 50 can immediately improve existing deployments of traditional videoconferencing systems by providing true eye contact.500 Silhouette. allowing natural eye-contact between participants. The rest of its product line provides several other advantages as well. This will continue to hinder adoption until the company develops a strategy or partnership to make convenient demonstration units available around the world. California. hiding the camera and enhancing image quality by improving image contrast.The Executive Telepresence Solution (ETS) provides a life-size. The downside to Digital Video Enterprises’ solutions: their cost relative to the current expectations of the market especially in the executive systems. I believe that the Telepresence Podium’s ability to project a life-like virtual speaker into a venue (or multiple venues simultaneously) anywhere in the world will be an attractive option that will catch on over time as telepresence continues to gain acceptance and visibility. With the camera hidden from view. The DVE Telepresence 50 can upgrade an existing deployment or improve a planned deployment of traditional videoconferencing end-points. Telepresence Podiums and Holographic Displays DVE makes a number of specialty solutions. Graphics and Imaging Business (GIB) Ken Crangle.hp. the company’s current strategy is to focus on the new Executive Telepresence System. Graphics and Imaging Business (GIB) Ray Siuta. Its displays are the only true eye contact solutions on the market. Halo Collaboration Solutions 46 . the ETS is currently being deployed around the globe with no minimum order needed. the DVE Executive Telepresence System (ETS) offers the highest quality experience currently available in a personal/executive system.

the rooms are approximately $425. Future collaborative formats from HP promise to address other spaces and sizes to compliment the growing network of Halo Studios. While this first-generation system is definitely pricey. AMD. To HP’s credit. the network and service fee is $18. PepsiCo and Novartis. I was especially impressed with Mark Gorzynski. displays. But as you go farther down the Fortune 2000 ladder. At 17’x21’. Between HP itself and PepsiCo (with 16 brands that each do over one billion dollars in business ) alone. however.000 each. and the table down to millimeter tolerances and achieves a superb “consistency-of-quality” between studios with studioquality acoustics and lighting. For now. DreamWorks. geographically-dispersed Fortune 500 companies I believe that the ROI is definitely there. The monthly fees cover: • HVEN ( Halo Video Exchange Network ) HP’s private. The Halo Studio itself is a superb first effort. including: AIG Financial Products. the environment conveys a natural experience with an excellent consistency-of-quality between all locations on the Halo Network. In smaller quantities. Hewlett-Packard is better known for its ubiquitous printers. full duplex.6 billion in 2005 sales and $2. Though engineered. and boasts a tier-one team of Halo-devoted technologists. as they become available. it is a good bet that executives from vendors and partners will see real value in being “right down the hall” and collaborating in real time. The cost of Halo varies depending on the number of studios purchased. with a secondary row of bench seats that can comfortably accommodate up to an additional six. For large. the price presents a barrier. HD collaboration display with high-bandwidth VGA connections to the collaborative PC and participant laptops • Life-sized multi-point (up to four locations) with no perceived delay between inter-continental locations. HP offers several lease options through its HP Financial Services subsidiary. Halo’s Chief Scientist. the simple interface and ease-of-use of the collaborative tools outshines those of rival environment providers. on-site equipment maintenance HSL’s Analysis I give HP a tremendous amount of credit for being the first Fortune 500 company to realize the importance. QoS IP network • 24x7 concierge-class connection support and help desk support • Proactive monitoring. MPEG-2 codecs with professional grade 16”x9” cameras • High-resolution document camera. HP retrofits its customer base with new services and capabilities such as multi-point. 47 . but if the company shows the same innovation it’s already displayed in so many aspects of its other businesses. personal computers and network servers than visual collaboration. the HP Halo Collaboration Studio seats six primary par ticipants. The company teamed up with DreamWorks in late 2003 to perfect and take to market a visual collaboration system the studio designed to help it produce animated films between its multiple campuses and partners. The look and feel of the room is warm and inviting. each of which display up to two remote par ticipants in site-to-site call or up to four par ticipants per screen in a multi-point call and a fourth screen for data collaboration. it’s rolling out a free upgrade to their initial customer that fixes the lack of multi-point capabilities.Telepresence Company Profiles With $86. The company has recently tripled the size of its telepresence lab in Corvallis. Hopefully the company will introduce backwards compatibility with traditional videoconferencing and high-definition as well. which can varies in other countries depending on local telecommunications costs. the cost gets harder and harder to justify. its early adopter customers likely won’t mind having kicked in a little extra to help the effort. Versions two and three will present the real tests for HP. • Power and network connections at each position • Site survey and on-site installation This engineered environment precisely positions cameras. as virtually every other analyst has said of Halo. especially for the limited capabilities of version one. Oregon. In the United States and most global business centers. Also. multifunction machines.000 monthly per room. As a standard business practice. The participants face three 50-inch plasma displays. However. These enhancements come at no extra charge beyond the monthly service fee. and pricing falls the more rooms you buy. But the company’s strongest asset is its growing network of Fortune 500 companies using Halo — 60 locations installed or under construction (23 at HP and 10 at DreamWorks).39 billion in net income. General Electric Commercial Finance. The HP Halo Collaboration Studio launched in December 2005 and has quickly built a strong network of Fortune 500 customers. HP Halo Collaboration Studios include: • DVD quality. HP appears to be doing more R&D than anyone else in the industry. secure high—bandwidth. BHP Billiton. potential and profit opportunity of effective visual collaboration and getting themselves into the big game. remote diagnostics and management.

with substantial funding by telepresence/MedPresence investor Karl Eller as a gift to Barrow. With a MedPresence solution already installed at the Translational Genomics Research Institute (TGen) and the company reporting 14 operating rooms and eight conference rooms on order from a variety of institutions. orthopedics. whose work he has long supported. the pace of the procedure and even the demeanor of the participants. Without a doubt. and Drs. with its very rare and specialized institutional knowledge. Medical students. improve medical diagnosis and outcomes. who explained the revolution this capability brings to both surgical education and the ability for Barrow.500 teaching hospitals globally. I was also able to spend time with Drs. which worked with a team of neurosurgeons at Barrow Neurological Institute in Phoenix. all under the umbrella of an integrated medical informatics platform. patient history. mobility and/or brain function could be riding on the outcome. (Our video is available at the Lab’s website: http://www. Operating Room and Mobile unit can be found in detail in the company write-ups for Destiny Conferencing and the Polycom RPX on pages 44 and 49. The mobile unit can be shipped to a medical school. Spetzler from the MedPresence Conference Room. Chief Executive Officer Brian Kinne. The technical specifications of the MedPresence Conference Room.Telepresence. etc.php). Stephen Papadopoulos and Shahram “Shez” Partovi. Each user views the operating room via a 4’x16’ video wall with the local view of the operation and medical imagery/informatics displays on highresolution monitors between every two positions in the conference room and/or the outer two panels of the video wall. anesthesiology data and basically any other diagnostic data being used in the operating room. The MedPresence solution consists of three components: • MedPresence Conference Room (MCR 400) — With seating options ranging from four ($ Company Founded: 2005 Employees Dedicated To Visual Collaboration: N/A 2005 Revenue: N/A Public / Private: Private MedPresence’s IP network and concierge/help desk services start at $5. Universities with medical schools will have the ability to utilize their MedPresence conference rooms in other fields and departments so they can share knowledge and instruction across a wide spectrum of disciplines adding value to the network as a whole. It appears that other institutions with expertise in cardiology. I’m still amazed at the experience to this day. and revolutionize the delivery of medical education and healthcare services globally. MedPresence connects one of its telepresence conference rooms to its solution for the operating room giving participants a panoramic view of the entire procedure and the surgeon a view of and interaction with the conference room. The MedPresence solution delivers medical informatics into the environment. the cost of the MOR 400 ranges from ($250. X-Ray/CAT scan imagery. with instruction from Barrow in Neurological Surgical Education and Genomics expertise from TGen already on-tap. Key Executives: David Allen. to assist globally in delicate operations where life. Robert Spetzler. The good folks at Barrow were kind enough to let me and the Lab’s videographer to scrub up and enter the operating room during the spinal cord procedure to understand and document the interaction the operating room has with the remote sites during an operation. physician notes. President MedPresence is a spin-off of Destiny Conferencing/TeleSuite. respectively (they share the same video codec and audio platform). The medical community is poised to be the first to create a strong network of “content” available. so I will focus on details specific to the MedPresence version. including operating microscopes. peer physicians and medical solution partners can view the equipment being used. teaching hospital or surgical conference and then hooked up to an appropriate IP network. consultations or routine medical check ups globally. oncology. pediatric surgery. Papadopoulos and Partovi. 48 . where it can then be connected to a MedPresence Operating Room(s) or Conference Room(s) for surgical • MedPresence Operating Room (MOR 400) — With options for a stainless steel portable unit to a rear projection video wall. MedPresence has also developed a mobile unit with a 4’x8’ video wall that deploys from an integrated shipping crate.000) to 28 ($599. it appears this capability will spread rapidly among the approximately 2.750 per month for the two-screen 200 series and $8.000).000) to ($449. HSL’s Analysis I had the opportunity to attend the public unveiling of the MedPresence solution at Barrow in January and observed both a spinal cord surgery and brain surgery conducted by Dr. this technology has the ability to save lives. Arizona to design a telepresence solution for surgical education. will soon join in creating a growing network where world-class expertise in a variety of disciplines can quickly be accessed and shared.MedPresence. this one looks like a grand slam home run. Effective Visual Collaboration and the Future of Global Business at the Speed of Light Company: MedPresence Company Website: www. As I predicted two years ago as a TeleSuite employee when we initially began developing this capability.humanproductivitylab.500 per month for the four-screen 400 series. including the Arizona Heart Institute and Arizona State University. the director of the institute. The team at Barrow included world-renowned neurosurgeon Dr. Unlike traditional telemedicine solutions that focus primarily on displaying the local area of the operation.000) • MedPresence Mobile Unit (MM 200) — The MM200 comes complete with a mini-conference table with embedded monitors and a 4’x8’ video wall that collapses into its own shipping crate ($200.

The Polycom RPX is available in six initial configurations. 3COM and AOL among others. Key Executives: Robert C. This network currently provides connectivity to Destiny Conferencing’s customers. and Chief Executive Officer Steven C. Polycom’s RPX VNOC and Circuit Services (network and concierge/ help desk services) start at $8. it can become annoying. • With Polycom’s standards-based VSX 8000 videoconferencing codec platform. whose TeleSuite product line was the original commercially-available group telepresence solution.000 per month for the two screen 200 series and $12.000. the market leader in traditional videoconferencing. The RPX was specified from the market-proven strengths of Destiny Conferencing’s telepresence environment and Polycom video codecs. by my calculation.Telepresence Company Profiles Company: Polycom Division Website: www. The Polycom RPX solution also has a lot going for it: • The modular “room-within-a-room” environment doesn’t require any permits. which is.polycom. If Tandberg. The company announced the Polycom RealPresence Experience (RPX) on May 22nd. the second largest effective visual collaboration network on the planet after Teliris. Huey — Chief Marketing Officer Craig Lynar — Vice President. or it can also be purchased with optional RPX VNOC and Circuit Services (concierge class service and an overlay Quality-of-Service IP network). Solutions Marketing Polycom. and/or Aethra want to get into the business of group telepresence environments. Hagerty — Chairman. The biggest drawbacks to the RPX? Its lack of a high-definition codec solution (the company reports it’s in the works) and the problem of eye-contact among participants in the larger 400 series environments. the effect is lost as you move out to the left and right of the center seats because of the position of the camera. and data collaboration tools.000 per month for the four-screen 400 series. which connects them to the second-largest effective visual collaboration network after Teliris. RPX suites are compatible with legacy videoconferencing equipment — a capability that HP Halo still lacks. President. which include PricewaterhouseCoopers. Polycom RPX solutions include: • Polycom VSX 8000 video codecs • Polycom EF 2241 Vortex Automatic Mic / Matrix Mixer with Phone Hybrid and Power Amp • Polycom People + Content IP Data Collaboration Tools • Life-sized multi-point • Three Sites — RPX 200 Series • Five Sites — RPX 400 Series 49 . Effective distance education (for both universities and corporate training/on-going education/ certifications) will be a key application in the coming years. and the Polycom/Destiny Conferencing product line boasts the only large-capacity classroom solutions on the market. and videoconferencing network management/scheduling. audio technology. Sony. • The ability to seat 28 participants in an effective classroom setting also separates them from the pack.66MM Public / Private: Public (NASDAQ: PLCM) • Voice-activated. voice. Polycom customers will have the option to utilize a Polycom Branded Conferencing network and concierge/help desk services provided by Destiny Conferencing. 2006. they’ll need to start from scratch and face intellectual property hurdles to do so. • Polycom RPX customers can connect to Destiny Conferencing’s existing network of Fortune 1000 clients.This is not a significant issue in larger classroom settings or for small meetings of one to four. While the participants closest to the center of the room have an excellent approximation of eye contact with the participants closest to the center of the room at the remote site. but for meetings of six to eight on each side. and can be moved relatively easily should a company relocate a facility or deploy a temporary suite to support a project or joint venture. or traditional videoconferencing “Hollywood Squares” multi-point format available for both 200 and 400 series • Power and network connections at each position • Site survey and on-site installation The Polycom RPX can be run as a stand-alone system using a company’s internal network. they finally made it to the party in a big way. HSL’s Analysis While it only took Polycom three years to catch on to the fact that telepresence solutions have spectacularly better end-user satisfaction and usage than traditional set top videoconferencing. Striking a deal with Destiny Conferencing locks up the only manufacturer of telepresence environments in the world outside their main competitors (HP Halo and Teliris). the result of a strategic partnership with Destiny Conferencing. data collaboration. its options ranging from four participants facing a 4’x8’ video wall for $249. minimum facilities make-ready.000 to a 28-participant environment facing a 4’x16’ video wall for $ Company Founded: 1990 Employees Dedicated To Visual Collaboration: N/A 2005 Revenue: $580. brings a complete portfolio of solutions to the emerging telepresence industry with 42 percent of the group videoconferencing market and strong institutional knowledge and intellectual property in IP/ISDN video.

high-definition seems to be a ways off for the company. Chief Technology officer and Co-founder Rick Ono. multi-stream MPEG-4 codecs and IP networking platform. • Fixed-position camera hidden at eye-level for an approximation of eye-contact with remote participants. Telanetix lacks in some areas. and their system integration par tners can construct engineered environments that address lighting. with the ability to launch calls and share data simple and intuitive. allowing it to provide a relatively inexpensive solution compared with most other providers that must integrate multiple codecs and a premise router from other providers. however. Audio Video Innovations (AVI) and Audio Visual Systems (AVS) The Telanetix Digital Presence Conferencing Solutions range from two screen systems that start at $39. The company has eight sites installed with an additional five on order. IP multicast-enabled network connections starting at $3. Solutions that require more than four screens are quoted based on the number of screens. life-size par ticipants and hidden eye-level cameras. San Diego-based Telanetix started shipping systems in 2005. but I believe they should get an engineered environment on the menu and the sooner the Company Founded: 2001 Employees: N/A 2006 Revenue from VC: N/A Public / Private: Public (OTC TNXI.550 and four screen systems at $45. Chief Architect and Co-founder Rob Arnold. Chief Operating Officer Founded in 2001. The company says its network of AV par tners could develop such as solution for any customer who wants it. Another difference is that Telanetix distributes its systems through high-end audio-visual systems integration firms that then integrate the base Telanetix technology package into a range of options individually designed to the customer’s specifications.383. Additionally. I headed a sales organization at Savvis that specialized in building QoS network solutions for the financial industr y for trading floor technology and market data applications. HSL’s Analysis I found Telanetix to have good video and audio quality with the lowest price point out of all the systems with multiple video streams. • Life-size multipoint with up to nine locations using IP multi-cast (limited to the number of screens deployed by the customer I. Effective Visual Collaboration and the Future of Global Business at the Speed of Light Company/Division: Telanetix Company Website: www. The company also provides a 24 x 7 help desk as part of its service for an additional $500 per month. Telanetix customers have a choice of different display sizes and options. The quality of the Savvis network for delay-intolerant IP video helped inspire my original research into effective visual collaboration and eventually telepresence. The Telanetix solution was also the least expensive group system that we reviewed which is impor tant for those organizations where six-figure solutions are not an option. and its compatibility with traditional videoconferencing is limited to integrating in an additional videoconferencing endpoint that seems somewhat kludge. acoustics and par ticipant placement.OB) Telanetix Network Services provide QoS. I was also impressed that Telanetix choose to par tner with Savvis Communications for its QoS network solution that suppor ts IP multi-cast.E. The base Telanetix system consists of the following components: • Linux-based. Key Executives: Thomas A. Not having a complete turnkey solution that addresses lighting.Telanetix.500 per month for 5MBS of QOS bandwidth. four screens = nine locations) 50 . Savvis’ ability to layer in additional network ser vices — including Internet and VPN on the same connection — without affecting the quality of the video reduces the operating costs for companies that choose to get their network ser vices from Savvis as well. Unlike the other providers of telepresence solutions (with the exception of Polycom which manufactures its own codec).Telepresence. Chairman and Co-founder Bob Alford. The company’s announced AV par tners include Avidex. Szabo. In a previous life. Telanetix is unique in that it has developed its own proprietary MPEG-4 codec and networking platform that supports multiple video streams. acoustics and par ticipant placement hinders it from providing a consistency-of-quality among all Telanetix rooms. I also found the system controls easy-to-use.

000 for a standard three-screen system to $280. per location. As the partners. • Simplified. Euronext. GlobalTable appears to lead the pack in installed customer Company Founded: February 2001 Employees Dedicated to Visual Collaboration: 40 2005 Revenue: N/A Public/Private: Private The cost of a GlobalTable installation ranges from $164. Chief Executive Officer Steve Gage. the company has built a scalable. the company offers single-screen personal and executive solutions that executives can operate from their offices. which essentially install a “room within a room” with a uniform look and feel.000 for a highdefinition version. a UK-based corporate communications and design/integration firm. GlobalTable Access. multi-site document replication. The recurring costs include: • InfiNET — Teliris’ secure. carrier-grade network platform for managing and monitoring high-bandwidth interactive video that is also backwards compatible with legacy videoconferencing end-points. high-bandwidth. No small feat. they’ll surely find sitting around the GlobalTable with their friends an attractive option. Polycom.000+ per month. lectern. As a compliment to its larger product. digital flip charting/storyboarding. 51 . low-latency Quality-ofService IP network Key Executives: Martyn Lewis. Vodaphone. Xchanging and The Royal Bank of Scotland. and Global Intercasting. It touts a system and network uptime reliability of 99 percent and an SLA to back it up. the company is strongly positioned price-wise against its newest and much better known competitor. The company’s VirtuaLive 360° offering which is just coming into deployment adds a stand-up presentation capability that the other vendors in the space have so far failed to address. Recurring operating costs run from $3. GlobalTable also provides backward compatibility with traditional videoconferencing endpoints. Lazard. help desk and regular health checks/equipment maintenance HSL’s Analysis With over 110 sites installed or on order. Teliris seems well positioned to ride the telepresence wave generated by HP.000 depending on the number of screens and options. ranging from four to sixteen seats. and full redundancy among others. MPEG-2 or MPEG-4 video (true high-definition optional) • Full-size. especially as more and more users realize the value and potential for inter-company business. It is also working on several solutions that integrate tools for collaborative research and development between remote facilities in pharmaceutical research and other specialized applications.500-$12.. the company’s executive solution starts at $63. which provide a more seamless and immersive display and the company has been working on a camera technology for over a year and ½ which promises to more seamlessly stitch together multiple video streams. depending on the type of system and network costs in the country of installation. giving prospective customers confidence that the GlobalTable solution is going to work as advertised. 3i. stand up presentation. due out this fall. Unlike the HP Halo Collaboration Studio and Destiny Conferencing’s TeleSuite Systems. encryption. GlaxoSmithKline. The company’s customer base remains one of its strongest assets. The company has been shipping its GlobalTable group telepresence solution since October 2001. 2D Cam. With a strong background in internetworking and IP security. • Options include: audio conferencing add-in.Telepresence Company Profiles Company: Teliris Website: www.Teliris. a large network of Global Fortune 2000 customers and a fourth generation product coming out this fall. • Proactive remote monitoring of the audio/visual and network devices in the environment • Concierge reservation support. GlobalTable installations include: • High-quality. • Site survey and on-site installation. I have seen an R&D version of Teliris’ fourth generation display system. with over 110+ sites either in place or on order. and Cisco’s entrance into a market that has so far remained the best kept secret in telecommunications. Teliris GlobalTable customers include: BP. Chief Operating Officer Jamie Thomson.000 per room and larger GlobalTable and GlobalTable VirtuaLive/VirtuaLive 360° environments can run north of $300. The company is also developing a solution for the movie and animation industries with a stand-up presentation capability and large video wall for storyboarding that looks promising. the GlobalTable solution has more flexibility in its room size. 3D Cam. DVD integration. Pearson plc. making Teliris the commercial leader in the space. With a true high-definition system at a price point at almost half the cost of a non-high definition HP Halo Collaboration Studio. among others. The final design can match corporate aesthetics. Managing Director Teliris was founded in February 2001 as an off-shoot of Mycroft. vendors and customers of Teliris’ clients begin to seriously evaluate telepresence solutions. Ltd. Chairman Marc Trachtenberg. the Teliris GlobalTable can also be integrated into larger environments. multi-point (up to six locations) with Teliris’ proprietary VirtualVectoring technology (discussed in more detail in the paper) • Data collaboration screen and presentation sharing. touch-sensitive control for volume and collaborative tools. Available in a number of multi-screen configurations. a New York City-based networking and IT security company.

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