High-end videoconferencing: Finally for real? Maybe
Cisco's John Chambers and his CEO brethren would never be caught wishing for elevated energy costs--but they're getting a golden opportunity to push a tech alternative to expensive corporate travel.
During Tuesday's quarterlywith analysts, Cisco Systems CEO John Chambers mentioned in passing that orders of the company's telepresence units were up 500 percent year over year.
Considering the scope of Cisco's $10.4 billion in sales during the second quarter, this qualifies as relative chump change. The list price for the company's typical telepresence configuration is $299,000. Also, there's a difference between the way Cisco books orders and sales.
Tech CEOs tend to lay it on a bit thick when talking up the bright spots in their business, and Chambers naturally couldn't resist seizing upon the telepresence statistics to proclaim video as "the killer app." But that's just John being John. No harm, no foul.
And, in this case, ignore the hyperbole and pay close attention to what the signposts mean. If you're looking for a silver lining to the ridiculous run-up in energy costs in the last year, this is it. The typical Fortune 500 company shells out a small fortune to jet its executives around the world each month: The World Travel & Tourism Council estimates that U.S. businesses spend some $179 billion on corporate travel annually.
Of course, Cisco's not the only game in town. The roster of manufacturers offering comparable videoconferencing packages for conducting virtual meetings include the likes of Hewlett-Packard, Teliris, Tandberg, and Polycom. (Also, there's IBM, which nearly a decade ago came out with Lotus Sametime, which merged Web videoconferencing with IM and audio-sharing capabilities.) The common idea of these and other similar products is to make participants in any virtual meeting appear and sound just as they might when attending a meeting in person.
In time, the system costs doubtless will come down--though obviously not to Kmart levels. But if energy prices suddenly plummet as fast as they climbed, might business buyers have a change of heart about investing in expensive teleconferencing systems? Their depth of conviction remains the $64,000 question.
When it comes to various telepresence incarnations, we're still talking about relatively few units at this stage and it's unclear whether we're on the cusp of a permanent or just temporary behavioral shift. Remember that after the Arab oil boycott in 1973, Americans began to embrace smaller, more gasoline-efficient automobiles. Unfortunately, that trend did not last long after prices at the pump returned to their historically cheap levels.