Is video conferencing cleared for take-off?

For those of us that hate flying - either through fear, boredom, or because we have toddlers at home - videoconferencing has always been a tantalising possibility. But even with almost ubiquitous IP network adoption, practically unlimited desktop video processing power, and a supposed revolution in unified communications, it has not really arrived yet. Not enough people are doing it to make it worthwhile. What went wrong?

"Everything starts with large businesses," argues Aaron McCormack, CEO at BT Conferencing. He argues that the market is picking up at the high end, which is forcing down manufacturing costs for the necessary components, and that the evolution of the video services sector will continue to fuel uptake. "We're not talking about something that's for very small firms, but if you're 100 to 200 person company that is geographically distributed, then we'll have a managed service for you."

Up until last year, analysts might have scoffed at such claims. Research by market-watcher Wainhouse into video-bridging services in the North American market shows they are still relatively rare, accounting for just 3.5 per cent of the overall real-time collaboration sector. In fact, from 2001 to 2006, revenue fell by 15 per cent, which is depressing stuff for companies offering such services. But more recently, this subsector has bucked the trend with revenue growing 23 per cent in the last year, driven in large part by concern over carbon emissions, says Wainhouse.

But to really drive videoconferencing deep into everyday business life, advocates need to get small businesses and mobile workers involved. "It's great to have lifesize boardroom meetings, but the more frequent user is often at home or on the road," points out Etienne Reincke, chief technology officer at IT services firm Dimension Data, which features unified communications among its offerings.

Reinecke clearly eats his own dog food; he thinks that he has saved $80,000 to $100,000 from his travel budget by using a mixture of stand-alone Tandberg desktop conferencing units and web-based clients served from a central Tandberg system. He is hoping that more companies will take advantage of such systems, especially as the major vendors move to high-definition conferencing.

Craig Malloy, CEO of LifeSize Communications, is staking his business on lower-cost, high-definition video systems. The company's conferencing device offers 1,280 x 720 resolution at 30 frames per second over standard IP networks. "It works over the open Internet or a corporate LAN, at a price point that most organisations could afford for any conference room," he says. "It ships at a sub-$10,000 price point to the end-user."

He might be onto something. While revenues begin to rebound in the video bridging services market, they are also growing for product equipment vendors, according to Wainhouse. Increased inconvenience for travellers in a security-obsessed society and oil prices nearing $100 per barrel could tip the market in the right direction. "The world economy is in Western Europe, North America, and Japan," Malloy says. "Secondly, the misery of air travel is increasing."

And that environmental issue continues to loom large. A study by the European Telecommunications Network Operators Association (ETNO) and the World Wildlife Fund suggested that if 5 to 30 per cent of business trips in Europe were replaced by videoconferening, the carbon emission savings could range from 5.6 to 33.5 million tonnes. Companies are responding to these possibilities. Almost half the companies in Europe believe that carbon emissions will become a major factor in determining travel decisions, and another 30% feel it would be somewhat important, according to Wa inhouse research.

Nevertheless, challenges remain. "At the end of the day the people spending the money are the IT department, and IT budgets aren't growing," says McCormack. "The place where they can save the money are the travel budgets, but the two budgets aren't in the same place and it's rare to have a CIO lift money out of the travel budget."

Maybe business managers on either side of the Atlantic aren't the only people who should be looking each other in the eye.